Tow Truck Insurance and the Texas Permit Rules
Tow truck insurance has to cover more than your own truck, because the vehicle on your hook belongs to someone else. Here is the coverage to ask your agent about, what Texas requires for each tow permit, how Texas gets proof of your insurance, and what applies if you also run a storage lot.
Coverage to Ask Your Agent About
Every tow company is different, so go through these with your agent before you take on new work.
- Auto liability for injuries or damage to others while you drive or tow
- Coverage for the vehicle on your truck, which Texas calls cargo or cargo-on-hook insurance
- Coverage for vehicles you keep on a storage lot, if you have one
- Physical damage coverage for your own tow truck, which your lender may require if the truck is financed
Texas Example, Insurance by Permit Type
In Texas, tow truck permits come from the Texas Department of Licensing and Regulation, TDLR. There are three permit types, and the insurance minimum depends on the type. All amounts are per truck, per incident.
- Incident Management permit, for non-consent tows started by a peace officer. It needs $500,000 in liability and $50,000 in cargo or cargo-on-hook coverage. This permit can also do private property and consent tows.
- Private Property permit, for non-consent tows authorized by a parking facility owner. It needs $300,000 in liability and $50,000 in cargo or cargo-on-hook coverage. It can also do consent tows.
- Consent permit, for tows the vehicle owner or operator asks for. It needs $300,000 in liability, and no cargo minimum is listed.
These are only minimums. Your agent can tell you whether higher limits make sense for the work you do.
How Texas Gets Proof of Your Insurance
You do not send the proof yourself. After you apply and pay the fees, you give your insurance company your certificate number, and the insurer sends your policy information to TDLR electronically.
The insurer must be licensed in Texas, and the name and address on the certificate must match your application. Coverage must stay in force at all times, and the insurer must give TDLR 30 days' notice before a cancellation takes effect. For other coverage Texas carriers need, see our Texas truck insurance page.
If You Also Run a Storage Lot
In Texas, a licensed vehicle storage facility needs liability coverage of at least $9,000 per claim if it can store up to 50 vehicles, $18,000 for 51 to 99 vehicles, and $25,000 for 100 or more. The policy must stay in force as long as the facility operates.
Tow Truck Insurance FAQ
What if my insurance company becomes insolvent?
In Texas, if your coverage lapses because your insurer becomes insolvent, you must file new evidence of insurance and an affidavit with TDLR within 10 days after the lapse.
Does Fifty Bridges offer towing company insurance?
Yes, in the states where we are licensed. Options depend on your state and your operation.
Related Coverage
Learn more about Truck Liability Insurance, Physical Damage Insurance and Commercial Truck Insurance. More articles are on the Fifty Bridges blog.
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