What is On-Hook Towing Insurance? As a tow truck driver, there are lots of pressures on you. Your customer expects the vehicle with you to be in good condition as soon as they leave it. But what if something happens to the vehicle while it is being towed? This is where on-haul towing insurance comes in. It is a coverage that helps to protect your customer’s vehicle while you are towing it.
In other words, on-hook towing insurance is coverage that protects your customer’s vehicle that is hooked to your towing truck. Although you may have physical damage coverage that covers your tow truck in case of an incident, it does not cover the vehicle that is hooked to your wrecker or rollback. It will only cover your business truck. This is why every towing business should consider on-hook towing insurance.
What Does it Cover?
As previously stated, this insurance protects your customer’s vehicle if it gets damaged while hooked to your tow truck or hauler. And if you or your driver is at fault, this coverage pays for repairs or replacement of the vehicle if it’s damaged or stolen. Damage usually ranges from small damages to total losses. And since the vehicle was in your care, your business is financially responsible.
Theft is also covered by this policy, whether it’s the entire vehicle or just parts of it. Vandalism is another big risk, especially in high-crime areas or if you leave the vehicle unattended. If you cause an accident or your driver’s, this policy covers the damage, including unusual events such as explosions or fires.
On-hook towing insurance may also cover the vehicle during hooking or loading onto your truck. And while unhooking or unloading, always keep in mind that a tow truck’s or hauler’s insurance does not cover these situations. Your business vehicle’s insurance doesn’t cover other people’s vehicles, even if they’re attached to your towing truck. That’s why towing and hauling businesses need to purchase on-hook coverage in order to avoid significant financial losses from incidents that happen while vehicles are in their care.
Is it Mandatory to have On-Hook Insurance?
You may be mandated to carry a minimum amount of this coverage to do your business. This means you will need to purchase at least the minimum requirement of the on-hook insurance to run your business. Keep in mind that the requirements for this insurance may vary from one state to another. So, ensure to check the requirements for your state.
How Much Does On-Hook Towing Insurance Cost?
Just so you know on-premises coverage is usually bundled with your business vehicle liability insurance, forming a huge portion of it. Different factors make up the final cost of the coverage. They include;
- The types and how many trucks you have
- The model of the trucks
- The type of cars that you tow
- How far and where are you going?
- How many claims have you filed so far?
- Driving History
- The drivers
- Drivers’ ages, records, and experience
- Deductibles and coverage limits
The above are just a few details that can affect the tow truck insurance cost. You should get quotes from many insurance companies so that you can have a good idea of how much the right coverage will cost.
Limits and Deductible
This coverage is very similar to every other policy. And that is because you will have to choose your coverage limits and decide on a good deductible. Keep in mind that the coverage limit should be enough to cover most unforeseen risks. However, note that the higher your limit, the higher you will pay for premiums. You can reduce some of the costs by choosing a very high deductible (out-of-pocket costs). Work hand in hand with an experienced insurance agent to find the best balance for your coverage.
On-Hook Coverage vs. Garagekeepers Insurance
Meanwhile, On-hook coverage and garagekeeper insurance are usually mixed up. On-hook insurance is all about protecting vehicles hooked to a truck. Meanwhile, garagekeeper insurance will help protect vehicles stored on your property.
In Virginia and Texas, on-hook insurance is commonly called “Garagekeepers insurance.”. And this makes this policy very confusing. In these states, Garagekeepers insurance is called “storage location insurance.” To avoid confusion, you should ask your insurance agent to clarify this coverage.