Whether it’s a couple of loose wheel bearings, a blown engine, or worse, a serious accident, truckers often feel helpless when their big rig forces them out of the fast lane and onto the side of the road. Thankfully, drivers aren’t stranded for long as fleets of tow truck operators stand by to assist day and night.
Many jurisdictions consider tow trucks to be emergency vehicles. A tower’s role in roadside assistance and post-accident cleanup is critical to keep the roadways clear of idle vehicles. However, the job of a wrecker is littered with dangers as operators often find themselves working alongside barreling traffic.
Risks posed to tow truck operators themselves, their equipment, as well as the livelihood of their customers, have given insurance companies cause to leave the towing market en mass. While many have left the sector, Reliance Partners’ Senior Director Of Business Development, Nicole Guinn, has remained dedicated to serving this critical market.
“The towing industry is risky to insure, which has many insurance companies hesitant,” said Guinn. “I’d say there are only around 10 or so insurance companies that are willing to insure the tow truck market.”
According to AAA, a tow truck driver is killed every six days. In addition to this somber statistic, it was reported that six towing operators were killed nationally within the first eight days of 2020.
States, though, have enacted laws to protect emergency vehicle operators from sustaining injuries while responding to a call. Georgia’s Move Over Law, for instance, states that drivers must move over one lane when possible if an emergency vehicle with flashing lights is parked on the shoulder of the highway. If traffic is too heavy to move over safely, drivers are then required to slow down below the posted speed limit and be prepared to stop.
The inherent danger of the job isn’t the only factor keeping insurance companies on edge. Another reason is the spontaneous and often unpredictable nature of a wrecker’s daily schedule. Many towing companies apply for towing rotation lists to operate on an on-call basis with state and local law enforcement agencies.
Each jurisdiction has its own rules and rates but Guinn noted that rotation lists typically require towers to have at least $1 million in auto liability and on-hook coverage to protect the vehicles hitched in order to remain on rotation.
Tow truck operators and commercial drivers both have similar needs when it comes to purchasing an insurance policy such as auto liability and physical damage coverage, as well as insurance for cargo and equipment. However, towing does have a few differentiating elements.
For starters, towers rely heavily on a variety of tools and equipment necessary to tackle any roadside challenges. Guinn noted that a brand new, full-sized wrecker can easily cost $500,000. Whether it’s an industrial-strength winch or a heavy-duty boom, these high-priced gadgets only add to the vehicle’s risk value.
But don’t assume that opting for an older tow truck without all the bells and whistles will always work in your favor. In fact, Guinn remarked that it actually costs more to insure an older truck. She reasoned that newer trucks may be more expensive but they’re without a doubt more reliable than older vehicles which, in turn, results in better rates.
“Every single incident is different and requires unique equipment. Understanding the routines and mechanical needs of the tower is how I determine an insurance plan that best suits the customer,” said Guinn.
According to Guinn, towers should be willing to discuss all aspects of their operations with their insurance agent. Every aspect including the scope of duty, fuel and on-site repairs to garage and body shop ownership, to the performance and safety record of these operations, can adversely affect your insurance rates.
Understand that providing services in addition to towing may require supplemental coverages such as garage keepers, uninsured motorists, or comprehensive and collision insurance.
Guinn added, “As an insurance agent, I want to know everything about your duties. If I don’t understand everything, I won’t be able to cover you properly.”
Prior to joining Reliance Partners, Guinn gained industry experience from eight years of bookkeeping with a Chattanooga, Tennessee-based towing company. She still attends towing conferences annually and said she strives to keep her team informed with in-depth towing insights.
“At Reliance Partners, we not only help our customers obtain the coverages they need for their specific jobs but we can also be their advisor,” Guinn said.
Reach out to Reliance Partners for more information on towing insurance and the many towing programs they provide.
Click for more FreightWaves articles by Jack Glenn.
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