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A 2026 guide to tow truck insurance: cost by coverage type, on-hook towing coverage vs garagekeepers legal liability, what standard commercial auto does not cover, motor club requirements, and how to build the full coverage package. Dragon compares Progressive Commercial across PA, TX, VA, MD, OH, TN, and KY.
Get a tow truck insurance quote. One call compares the carriers we write side by side.
Tow truck insurance is the package of commercial auto liability, physical damage on the truck, and on-hook or garagekeepers coverage that a wrecker, rollback, or flatbed towing operation needs to run legally and get dispatched by motor clubs. Standard commercial auto covers your truck; it does not cover the customer vehicle you are pulling. That second exposure is why towing is a specialty risk most standard carriers will not write.
Quick Answer
Tow truck insurance combines commercial auto liability, physical damage on your truck, and on-hook or garagekeepers coverage for the customer vehicles you tow or store. Progressive Commercial reports a 2025 average of $606 a month per truck on new tow policies (median $355), for liability and physical damage only. On-hook and garagekeepers add to that. We quote Progressive, GEICO, and Trinity Underwriters side by side.
As an independent agency, Dragon Insurance quotes tow truck insurance for owner-operators and towing companies in Pennsylvania, Texas, Virginia, Maryland, Ohio, Tennessee, and Kentucky. Below: what tow truck insurance costs per month, the tow truck insurance requirements you have to meet, the coverage parts you need, and how on-hook coverage differs from garagekeepers legal liability. Moving vehicles under a shipping agreement on a car trailer instead? That takes car hauler insurance, with motor truck cargo for the vehicles you carry.
Where We Write Policies
Licensed in PA, TX, VA, MD, OH, TN & KY only. Quotes available for these states.
Key Takeaways
Premiums can start around $200 a month for a clean-record truck with established authority, but the range runs into the thousands depending on your equipment, cargo, radius, authority age, and driving history. The best published reference point for tow truck insurance cost comes from Progressive Commercial, which reports its own tow truck premiums: a typical new tow policy averaged $606 a month per truck in 2025, and the median was $355.
Industry benchmarks, not Dragon quotes.
These are averages one carrier published for its own policies. Your premium depends on your truck, on-hook limits, yard, radius, driving record, and authority age.
| Vehicle type | Median per month | Average per month |
|---|---|---|
| Tow truck | $355 | $606 |
Source:Progressive Commercial, “How much is commercial auto insurance?”, 2025 policy data, checked October 29, 2026 (link in Sources below). Method: monthly premium per truck (power unit) on new 2025 Progressive Commercial policies with no driver violations, for liability and physical damage coverage only. On-hook, garagekeepers, and general liability are not included. Industry benchmarks, not Dragon quotes.
See where your tow truck lands against these averages.
Call 717-229-5115 with your truck type, on-hook limit, and motor club contracts. We quote Progressive, GEICO, and Trinity Underwriters side by side with identical limits.
For semi, box, dump, and flatbed benchmarks by state, see our commercial truck insurance cost guide.
People search for towing company insurance and tow truck insurance interchangeably, but they describe two different scopes, and the difference decides how much coverage you actually need to buy.
Insuring a single tow truck
One truck, usually one driver, often an owner-operator running motor club calls or private property work. The program is commercial auto liability, physical damage on the truck, and on-hook coverage for the vehicle being towed. This is the simplest version of the risk.
Insuring a towing company
A business with multiple trucks, hired drivers, and usually a storage or impound yard. Everything above still applies per truck, and then the business exposures stack on top: garagekeepers for vehicles in your care, general liability for the premises, and workers compensation once you have employees. Most uninsured gaps we see are in this second layer, not the trucks.
If you operate as a company rather than a single truck, read the yard, general liability, and workers compensation sections further down. Those three are what separate a towing company insurance program from a tow truck policy, and they are the coverages most often missing when a new client brings us their existing paperwork to review.
Commercial tow truck insurance is built from several distinct coverage parts. Most carriers write these as a commercial auto package plus endorsements or separate policies for the on-hook and garage exposures. Progressive, for example, requires liability on the truck before it will add on-hook coverage.
Primary Auto Liability
Covers bodily injury and property damage you cause to other people while operating the tow truck. For for-hire trucks of 10,001 pounds or more running interstate, the federal minimum is $750,000. Motor club contracts and state permits can set their own, higher floors.
Physical Damage (Truck)
Collision covers your tow truck in a crash; comprehensive covers theft, fire, vandalism, and weather damage to the truck itself. Required by lenders on financed equipment.
On-Hook Towing Coverage
Pays to repair or replace a customer's vehicle damaged by collision, fire, theft, explosion, or vandalism while you tow or haul it. This is the core specialty coverage standard commercial auto does not include. Progressive calls it Garagekeepers Legal Liability in Texas and Virginia.
Garagekeepers Legal Liability
Covers customer vehicles in your possession off the hook: on your lot, in your shop, or at your storage yard pending pickup. Progressive sells it only in a package with liability and on-hook, and calls it Storage Location insurance in Texas and Virginia.
General Liability
Covers bodily injury and property damage claims that arise away from the vehicle, such as a customer tripping at your lot or property damage during a repo or recovery operation not covered by auto liability.
Garage Liability
A broader form of GL designed for automotive businesses, covering operations like a repair shop, impound lot, or storage facility in addition to the towing operation itself.
Wrecker insurance and rollback insurance use the same coverage stack: liability, physical damage, on-hook, and garagekeepers if you store vehicles. Progressive's on-hook form covers a customer vehicle while you are towing or hauling it, so a wheel-lift wrecker and a flatbed rollback both fit under it. What changes is where the on-hook risk sits, and that shapes the limit we quote.
Wrecker (wheel-lift or boom)
The towed vehicle rides partly on its own wheels, so on-hook losses tend to come from the lift itself: bumpers, fascia, steering, and drivetrain on the wheels left down. Heavy wreckers and rotators move buses and loaded semis, so the on-hook limit has to match the most valuable unit you pull, not a passenger car.
Rollback or flatbed
The vehicle rides on the deck, so the exposure shifts to winching, loading, tie-down failure, and unloading. Rollbacks often carry higher-value cars that owners do not want lifted, such as low-clearance and all-wheel-drive models, which pushes the per-vehicle value up.
Running both truck types? We quote one package with each unit scheduled at its own value and an on-hook limit sized to the biggest vehicle in your mix. Start with our commercial auto insurance quote or call 717-229-5115.
A tow truck monthly premium is the sum of four pieces, and the two tow-specific pieces, on-hook and garagekeepers, are what separate it from any other commercial truck quote. Here is how the pieces generally compare relative to each other: primary auto liability is typically the single largest piece, physical damage on the truck itself is priced on replacement value, on-hook/garagekeepers coverage scales with the limits your motor club or contracts require, and general liability is usually the smallest piece of the four. Costs increase significantly for heavy rotators, large fleets, high-limit on-hook requirements from motor club contracts, or poor loss history.
For published industry averages across other truck types, see the benchmark table in our commercial truck insurance cost guide. For a real monthly number on your truck, yard, and motor club contracts, call 717-229-5115 or start your commercial truck insurance quote online.
On-hook coverage pays to repair or replace a customer's vehicle that is damaged by a collision, fire, theft, explosion, or vandalism while you are towing or hauling it. Your commercial auto liability covers other people's property on the road, not the vehicle in your care, so on-hook insurance fills that gap. With Progressive, you choose a per-occurrence limit (the most it pays for all vehicles in one loss) and a deductible, and you must carry liability on the truck to be eligible.
On-hook towing coverage
Covers: the vehicle in transit
Applies while the customer vehicle is on your hook or deck and being moved. Once it is unhooked and parked at your lot, look to garagekeepers instead.
Garagekeepers legal liability
Covers: the vehicle in storage
Covers customer vehicles damaged by fire, theft, vandalism, or collision while in your possession at your lot, shop, or impound yard. Progressive sells it only as part of a package with liability and on-hook.
Watch the names in Texas and Virginia. There, Progressive calls on-hook coverage “Garagekeepers Legal Liability” and calls the lot coverage “Storage Location insurance.” A Texas quote that lists garagekeepers may cover the tow only, not your yard. We line up the forms by what they cover, not what they are called, so your transit and storage exposure are both quoted.
An on-hook or garagekeepers claim is paid by your policy, not the customer's auto policy, so how you document each tow decides how fast a damaged vehicle gets repaired and how the loss reads at your renewal.
One intake. Tow truck specialists compared.
Get your tow truck insurance quote from Dragon Insurance.
We build the full package: primary liability, physical damage, on-hook/garagekeepers, and general liability. Tell us your truck, your operation, and your state once.
Insurance requirements for tow trucks come from three places: federal rules if you tow for hire across state lines, your state's towing permit rules, and the contracts you sign with motor clubs and property owners. The highest of the three sets your real floor, and that is the limit we quote. For the trucking side of these rules state by state, see our trucking insurance requirements by state guide.
Under federal rule 49 CFR 387.9, a for-hire truck with a gross vehicle weight rating of 10,001 pounds or more that carries nonhazardous property in interstate commerce needs at least $750,000in liability. A tow operator who stays inside one state follows that state's rules instead, such as the Texas permit floors below.
AAA and other roadside networks each set their own minimums in the provider agreement, and they change them over time, so there is no single national number to plan around. Read the insurance page of the agreement before you sign. It usually names:
Dragon Insurance issues COIs and adds additional insured endorsements for motor club contracts. Send us the agreement before you sign, and we quote limits that match it line by line.
In Texas, the Texas Department of Licensing and Regulation (TDLR) licenses towing companies and permits tow trucks. Under Texas Occupations Code chapter 2308, you need a TDLR license to operate a towing company or perform towing operations, and every tow truck needs its own permit to tow on public roads. Each permit type sets its own insurance minimum, per truck, per incident:
| TDLR permit | Tows it allows | Liability | Cargo or cargo on hook |
|---|---|---|---|
| Incident management | Police-initiated and accident scene tows, plus private property and consent | $500,000 | $50,000 |
| Private property | Nonconsent tows authorized by a parking facility owner, plus consent | $300,000 | $50,000 |
| Consent | Tows authorized by the vehicle owner only | $300,000 | Not required |
Everything above covers a single truck and driver. A towing company running two or more trucks, a storage or impound yard, and drivers who are not the owner carries a wider set of exposures at the same time: fleet auto coverage, garagekeepers legal liability sized to the yard, general liability for the premises, and workers' compensation once there is payroll. Each of those is a separate insurable risk, and a single-truck on-hook policy will not automatically extend to cover them.
Once a towing business owns two or more trucks, it typically qualifies for one of two structures: a scheduled commercial auto policy, where each truck is listed and rated individually, or a fleet program that bundles every vehicle under one policy. A bundled fleet program is usually simpler to administer, since renewals, endorsements, and certificates of insurance are handled in one place instead of truck by truck. It is not automatically the cheaper option: a single high-risk truck, an inexperienced driver, or a recent loss can affect pricing for the entire fleet account, so a clean scheduled setup sometimes prices better than a bundled fleet program for an operation with mixed truck types or mixed driver experience.
Per-truck pricing generally improves as a fleet grows, since standardized procedures and spread risk work in the fleet's favor at renewal, but a single high-risk truck or driver can offset that benefit for the whole account. A small towing company running two to five trucks with a storage yard should expect total coverage costs across fleet auto, garagekeepers legal liability, and general liability to run well beyond a single-truck operation's cost. Workers' compensation is a separate cost once the company has employees beyond the owner. Call 717-229-5115 for a real number on your specific fleet.
On-hook coverage, discussed above, only protects a vehicle while it is physically attached to the truck and in transit. Once a vehicle comes off the hook and sits at a storage lot, impound yard, or facility awaiting pickup, that is a separate exposure. For a towing company that stores vehicles overnight or holds impounded cars for days at a time, this is not optional coverage; a yard full of vehicles is exposed to fire, theft, vandalism, and weather damage all at once.
Garagekeepers legal liability for a storage or impound yard varies with the yard's physical security: fencing, lighting, cameras, and controlled key access all factor into the rate, and a well-secured lot can qualify for meaningfully better terms than an open, unmonitored one. Standard deductibles and per-vehicle limits vary by market and state, so a company with a higher-value mix of vehicles passing through its yard should carry higher per-vehicle limits than one that mostly handles older, lower-value cars. Call for a rate specific to your yard.
General liability covers bodily injury and property damage claims that happen away from a truck itself, such as a customer slipping on the lot while picking up a vehicle, a delivery driver getting hurt at the facility, or a neighboring property being damaged during a recovery job. It is a distinct policy from commercial auto, which only covers incidents involving a vehicle the company owns or operates.
General liability is generally one of the more affordable pieces of a towing company's program, often written with a $1 million per-occurrence and $2 million aggregate limit. A company that operates a storage or impound yard with regular public foot traffic, an office where customers pay release fees, or a fenced lot near a busy roadway typically needs higher limits than a roadside-only operator with no fixed location for the public to visit.
Not every tow is the same from an underwriting standpoint. A roadside assistance call is dispatched by a driver who wants help. Impound towing, ordered by police or a property manager, and repossession towing, ordered by a lender, both involve recovering a vehicle from an owner who did not request the tow and who may not want it to happen. That difference matters for insurance because it changes the likelihood and type of claim.
Repossession work in particular carries confrontation exposure that standard roadside towing does not. Vehicle owners facing a repo can respond unpredictably, and a recovery that goes wrong can lead to property damage, a personal injury claim, or a wrongful repossession lawsuit if the vehicle was taken in error or the recovery crossed a legal line, such as entering a locked garage or gated property without authorization. Specialty programs for repossession work often build in coverage for assault and battery claims, wrongful repossession liability, and the personal liability of employees involved in a contested recovery, on top of the auto and garagekeepers coverage a roadside towing operation already carries.
A single owner driving their own truck typically has no workers' compensation obligation. That changes the moment a towing company puts a driver who is not the owner on payroll. The employee threshold that triggers the requirement varies by state:
Workers' compensation cost for a tow truck or trucking business depends heavily on payroll size, driver job classification, and claims history, so a single average figure is not a reliable guide. Misclassifying drivers as independent contractors to avoid workers' compensation is a common and costly mistake; state labor departments and workers' compensation auditors routinely reclassify drivers based on how much control the company exercises over their schedule, equipment, and dispatch, not the label in a contract.
How much does tow truck insurance cost?
Premiums can start around $200 a month for a clean-record truck with established authority, but the range runs into the thousands depending on your equipment, cargo, radius, authority age, and driving history. Progressive Commercial reports that new tow truck policies averaged $606 a month per truck in 2025 (median $355) for liability and physical damage, before on-hook and garagekeepers. Heavy rotators, high-limit motor club contracts, and poor loss history push premiums higher. Call 717-229-5115 for your actual rate.
What is on-hook towing insurance?
On-Hook Towing coverage pays for damage to a customer's vehicle while it is attached to your tow truck and being transported. Standard commercial auto covers YOUR truck, not what you are towing. Without on-hook coverage, you are personally responsible for damaging a customer's $40,000 car in transit. In Texas and Virginia, Progressive calls this coverage Garagekeepers Legal Liability. Vehicles stored at your lot need separate garagekeepers coverage, which Progressive calls Storage Location insurance in those two states.
What is garagekeepers legal liability?
Garagekeepers Legal Liability covers customer vehicles damaged by fire, theft, vandalism, or collision while in your possession, such as on your lot or at your impound facility. Progressive sells it as part of a package with liability and on-hook towing coverage. Watch the names in Texas and Virginia: there, Progressive calls on-hook coverage Garagekeepers Legal Liability and calls the lot coverage Storage Location insurance. If you run a licensed vehicle storage facility in Texas, TDLR rules (16 TAC 85.400) require insurance on the vehicles you store, and motor club contracts in any state typically require garagekeepers coverage too.
Do you need insurance for a towing company?
Yes. Commercial auto liability is required to legally operate a commercial vehicle in every state. In addition, motor clubs and private contract partners require proof of on-hook or garagekeepers coverage before dispatching you. State towing permits, such as Texas TDLR tow truck permits, require a minimum level of insurance as a licensing condition. Operating a tow truck uninsured or underinsured exposes the business owner to personal liability for vehicle damage claims that can easily exceed the value of the tow truck itself.
What insurance is required for a tow truck?
Every tow truck needs commercial auto liability. A for-hire truck of 10,001 pounds or more towing across state lines needs at least $750,000 under federal rule 49 CFR 387.9. Texas TDLR permits require $300,000 or $500,000 in liability per truck, plus $50,000 in cargo or cargo on hook for incident management and private property tows. Motor clubs add their own on-hook, garagekeepers, and general liability minimums. Call 717-229-5115 and we quote limits that meet all three.
Do tow trucks in Texas need special insurance?
Yes. Texas requires a TDLR towing company license and a separate TDLR permit for each tow truck, and each permit type carries its own insurance minimum per truck, per incident. Incident management trucks need $500,000 in liability and $50,000 in cargo or cargo on hook coverage. Private property trucks need $300,000 in liability and $50,000 in cargo or cargo on hook. Consent-only trucks need $300,000 in liability, with no cargo minimum. The policy must come from an insurer licensed in Texas and stay in force at all times. Dragon Insurance quotes Texas tow truck packages that meet your permit class and your motor club contracts. Call 717-229-5115.
What carriers write tow truck insurance?
Tow truck insurance is a specialty niche; most standard commercial auto carriers will not write it. Dragon Insurance quotes Progressive, GEICO, and Trinity Underwriters side by side, plus additional specialty and excess and surplus (E&S) markets through master brokerage relationships for heavy wreckers and hard-to-place yards. We handle motor club COI requirements and additional insured endorsements across PA, TX, VA, MD, OH, TN, and KY.
How much is tow truck insurance per month?
Tow truck insurance premiums can start around $200 a month for a clean-record truck with established authority, but the range runs into the thousands depending on your equipment, cargo, radius, authority age, and driving history. For a published benchmark, Progressive Commercial reports a 2025 average of $606 a month per truck on new tow policies, and a median of $355, for liability and physical damage only. Your on-hook limits and motor club contract requirements move the monthly number further. Monthly billing is available through premium finance companies, which split the annual premium into installments in exchange for a small finance fee. Paying annually in full is cheaper overall. Dragon can quote both payment options across PA, TX, VA, MD, OH, TN, and KY. Call 717-229-5115 for your monthly rate.
What is motor club insurance for tow trucks?
Motor club insurance is not a separate policy type. The term refers to the coverage requirements that motor clubs such as AAA and other roadside dispatch networks set before dispatching a tow operator. Each club names its own limits in the provider agreement, typically covering auto liability, on-hook or garagekeepers legal liability sized to the vehicles you will tow, and general liability. A Certificate of Insurance naming the motor club as an additional insured is typically required before the first dispatch. Dragon Insurance builds tow truck packages that meet motor club requirements and issues COIs directly for operators in PA, TX, VA, MD, OH, TN, and KY.
Do towing companies need different insurance than a single tow truck operator?
Yes. A towing company with two or more trucks needs a fleet-level commercial auto policy, garagekeepers legal liability sized to its storage yard capacity, general liability for the yard itself, and workers' compensation once it has employees beyond the owner. A single owner-operator's on-hook coverage protects one truck and one driver; a company-level policy has to account for multiple drivers, a physical storage location, and payroll exposure the single-operator model does not have.
Does impound and repossession towing cost more to insure than roadside towing?
Generally yes. Impound and repossession towing carry a different risk profile than roadside assistance calls because repo drivers recover vehicles from owners who did not request the tow, which can lead to confrontations, property damage claims, and wrongful repossession lawsuits. Carriers often apply higher minimum liability limits to repo operations, and if you add impound or repo work to an existing roadside towing policy without telling your carrier, the change in classification can trigger a mid-term audit or even complicate coverage on a claim.
When does a towing company need workers' compensation insurance?
The threshold depends on the state. Pennsylvania, Maryland, Ohio, and Kentucky require workers' compensation once a business has one employee; Virginia requires it at two employees; Tennessee requires it at five employees for most businesses. Texas is the only state in the country where workers' compensation is optional for private employers, though a towing company that opts out (a "nonsubscriber") loses key legal defenses if a driver is hurt on the job. Ohio is a monopolistic state, so Ohio towing companies must buy workers' compensation directly from the Ohio Bureau of Workers' Compensation; Dragon Insurance cannot place that coverage in Ohio.
How much does insurance cost for a small towing company with 2 to 5 trucks?
Costs scale with fleet size, coverage limits, and whether the company runs a storage yard, combining commercial auto, garagekeepers, and general liability. Per-truck pricing tends to improve as a fleet grows, since standardized procedures and spread risk work in the fleet's favor at renewal, though a single high-risk truck or driver can offset that benefit for the whole account. Call for a real number on your specific fleet.
Do I need a separate insurance policy for each truck in my fleet?
Not necessarily. Most towing companies with two or more trucks qualify for either a scheduled commercial auto policy, where each truck is listed individually, or a fleet program that bundles all vehicles under one policy. A bundled fleet program is usually easier to administer, but it is not automatically cheaper: one high-risk truck or driver can affect pricing for the entire fleet account, so a clean scheduled setup sometimes prices better than a bundled fleet program for a mixed-risk operation.
Which tow truck insurance carriers write coverage for towing companies with fleets and impound yards?
Dragon Insurance quotes Progressive, GEICO, and Trinity Underwriters for primary liability, physical damage, and on-hook and garagekeepers coverage on towing fleets, plus additional specialty and E&S markets through master brokerage relationships, across Pennsylvania, Texas, Virginia, Maryland, Ohio, Tennessee, and Kentucky. For general liability, workers' compensation, and business owner's coverage, Dragon shops the company's needs across its broader business insurance markets and quotes the right fit for the account.
Tow truck insurance is not a one-size package. The limits you need depend on your truck, your motor club contracts, your state, and whether you run a storage lot. Dragon Insurance builds the complete coverage program and quotes Progressive, GEICO, and Trinity Underwriters side by side across PA, TX, VA, MD, OH, TN, and KY in one conversation. If your operation also hauls freight beyond towing, see our commercial trucking insurance page for fleet and owner-operator coverage.
Visit us: 1525 Cedar Cliff Dr STE 202, Camp Hill, PA 17011
Serving PA, TX, VA, MD, OH, TN, and KY. English, Nepali, and Hindi spoken.
2025 tow truck premiums: $606 average and $355 median per month, new policies, liability and physical damage, no driver violations.
What on-hook covers, limit and deductible, liability prerequisite, and Texas and Virginia naming.
$750,000 federal minimum for interstate for-hire trucks of 10,001 pounds or more hauling nonhazardous property.
Permit types and minimum liability and cargo insurance per truck, per incident.
Texas-licensed insurer, electronic certificate filing, continuous coverage, and revocation rules.
Sources checked October 2026.
Dragon Insurance Services LLC is a licensed independent insurance agency. This article reflects general market factors and our agency's quoting experience across PA, TX, VA, MD, OH, TN, and KY; it is not a price quote or a guaranteed rate. Benchmark figures are published by Progressive Commercial and are not Dragon quotes. Towing insurance requirements vary by state, motor club contract, and operation type; verify current requirements before entering into contracts. Actual premiums vary by truck, driver, coverage, and state, and are subject to underwriting approval. Contact us for a personalized quote.
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About the Author
Bimal GurungCEO, Agency Principal & Licensed Insurance Agent
Bimal Gurung is CEO and Agency Principal of Dragon Insurance Services, an independent agency in Camp Hill, PA that compares 30+ carriers for clients across Pennsylvania, Texas, Virginia, Maryland, Ohio, Tennessee, and Kentucky.
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