Article

Understanding On-Hook Coverage — What It Really Protects

If you run a towing business, you already know that every vehicle you tow becomes your responsibility the moment it’s hooked up. That’s where On-Hook Coverage comes in. It’s one of the most important parts of a towing insurance policy, yet it’s also one of the most misunderstood.

This guide breaks it down in a way that’s simple and easy to follow.

What Is On-Hook Coverage?

On-Hook Coverage protects you when a customer’s vehicle is damaged while it’s being towed.
If something goes wrong during the tow, this is the coverage that pays for the repairs — not your customer, and not your general liability insurance.

In short:
If the vehicle is in your care and connected to your truck, On-Hook is what protects it.

What Does On-Hook Coverage Protect Against?

This coverage responds to many of the most common risks in towing. It typically covers damage caused by:

1. Collisions

If your tow truck is involved in an accident, the vehicle you’re towing is protected.

2. Fire

Whether it starts in your truck or the towed vehicle, On-Hook can cover fire-related damage.

3. Theft or Vandalism

If the vehicle is stolen or damaged during a tow, you’re protected.

4. Accidental Drops or Equipment Failure

If the vehicle slips, falls, or gets damaged during loading or unloading, On-Hook responds.

This protection is crucial because accidents can happen even to the best operators.

What On-Hook Coverage Does Not Cover

To avoid confusion, here’s what On-Hook does not include:

1. Pre-Existing Damage

If the vehicle was already damaged before the tow, it’s not covered.

2. Mechanical Breakdowns

If the vehicle stops working internally, that’s not something On-Hook handles.

3. Damage After Delivery

Once the vehicle is dropped off and released, On-Hook no longer applies.

Understanding these exclusions helps you avoid surprises during a claim.

Common Mistakes Operators Make

Many towing companies unintentionally expose themselves to risk. Here are the most frequent errors:

1. Having Limits That Are Too Low

Cars today are expensive. Some exceed $60,000 to $100,000. If your On-Hook limit is too low, you may have to pay the difference out-of-pocket.

2. Assuming Commercial Auto Insurance Covers Everything

Your auto liability protects others, not the vehicle you're towing. This is a very common misunderstanding.

3. Forgetting to Update Coverage When Adding New Trucks

New trucks and expanded services can change your On-Hook needs.

4. Not Documenting Vehicle Condition Before Towing

Taking quick photos can prevent disputes and protect you in a claim.

Why On-Hook Coverage Matters in 2025

The towing landscape continues to evolve. Here’s why On-Hook is more important than ever:

- Higher vehicle repair costs

- Newer cars with sensitive electronics

- Stricter insurance requirements

- Increased customer expectations for protection

With these changes, having proper On-Hook Coverage is no longer optional — it’s essential.

Final Advice

On-Hook Coverage is one of the best ways to protect your business from unexpected repair costs and customer disputes. It gives you peace of mind knowing that every vehicle you tow is covered from the moment you hook it up.

If you want to review your current limits or make sure your coverage fits your operations, you can call or email Sierra Pacific anytime to request a quote. We’re here to help you understand your policy and keep your business protected.

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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