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Why Specialized Towing Insurance Beats General Commercial Auto Policies

Not all insurance policies are built the same. Many towing businesses start out using a regular commercial auto policy, thinking it covers everything they need. But once a real towing-related claim happens, that’s when the gaps show up — and those gaps can be expensive.

Here’s why specialized towing insurance is the smarter and safer choice for your business.

What General Commercial Auto Policies Don’t Cover

A standard commercial auto policy is designed for businesses that simply drive their vehicles — not for towing, hauling, or recovering other people's cars. Because of this, important protections are usually missing.

Here are the most common gaps:

1. No On-Hook Coverage

If the customer’s vehicle gets damaged while being towed, a general policy won’t pay for it.

2. Limited or No Equipment Coverage

Tow equipment like winches, dollies, and ramps may not be covered if they’re damaged during a job.

3. No Protection for Winching or Recovery Work

Recovering vehicles from ditches, accidents, or tight spaces is a towing-specific activity. General auto policies exclude this.

4. No Coverage for Customer Vehicles in Your Care

Anything that happens while the vehicle is hooked up, moved, or secured is usually not included.

5. Gaps That Lead to Out-of-Pocket Costs

Without tow-specific coverage, even a small accident can lead to thousands in repairs that the business must pay.

What Specialized Towing Insurance Includes

Specialized towing insurance is designed specifically for towing operations, so it provides protection where towing companies actually need it.

1. On-Hook Coverage

Protects customer vehicles while being towed.

2. Garagekeepers Coverage

Covers vehicles stored on your lot or inside your facility.

3. Towing-Specific Liability

Covers situations unique to towing, such as moving disabled vehicles or clearing accident scenes.

4. Coverage for Tow Equipment

Includes protection for winches, cables, dollies, and other equipment essential to the job.

5. Expanded Roadside Assistance Exposures

Protects operators doing jump-starts, lockouts, tire service, and more.

This type of policy is built for the real-world risks you face every day on the road.

Real-World Scenarios That Show the Difference

Here are a few examples of situations where specialized towing insurance saves the day:

Scenario 1: The Car Falls Off the Bed

A customer vehicle slips during loading.

- General auto policy: Not covered

- Towing policy: Covered under On-Hook

Scenario 2: Damaged During Recovery Work

You’re lifting a vehicle out of a ditch and it gets damaged.

- General auto policy: Excluded

- Towing policy: Covered

Scenario 3: Fire on Your Storage Lot

A fire damages several vehicles you stored overnight.

- General auto policy: Not covered

- Towing policy: Covered under Garagekeepers

These examples show how easily a regular policy can fail you.

Is Specialized Towing Insurance More Expensive?

Not always. In many cases:

- Specialized coverage can cost the same or even less

- You avoid the massive financial risk of uncovered claims

- Carriers prefer insuring towing operations with proper coverage

The goal is not to find the cheapest policy — it’s to find the one that actually protects your business.

When Should You Switch to Specialized Towing Coverage?

You should consider upgrading if:

- You bought new tow trucks

- You added recovery services

- You started storing customer vehicles

- Your operations expanded into new areas

- You want better protection with fewer gaps

The sooner you switch, the safer your business becomes.

Final Advice

A towing business needs towing insurance — not a basic commercial auto policy. Specialized towing insurance protects your team, your equipment, your customers, and your financial future. It’s built for the real risks of towing, not the general risks of driving.

If you want to check if your current policy has gaps or explore better options, you can call or email Sierra Pacific anytime to request a quote. We’re here to help you stay protected with the right coverage.

READY TO GET STARTED?

Let’s protect your tow fleet today.

Call or text us to get your quote started today. We’ll build a clean, accurate, carrier-ready quoting packet so you can see your options and protect cash flow with confidence.

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