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Critical Things To Know About On-Hook Auto Insurance

Insurance companies offer various forms of commercial auto insurance. One of them is on-hook-auto insurance, which covers damage to a client's car that you have hooked to your tow truck. The coverage is necessary since conventional commercial auto insurance excludes damages to cars you tow or haul.

Below are some things you should know about on-hook car insurance.

The Coverage Is Available to Certain Businesses

On-hook car insurance is not available to everyone; only certain businesses can buy the coverage. Car insurance companies only sell the coverage to businesses whose core services involve towing cars. For example, you may purchase the coverage if you:

  • Run a service station
  • Operate a towing business
  • Operate trucks for hire

The above list is not exhaustive. Consult your insurance agent to help you find reliable coverage for your business.

The Government May Demand It

The government regulates most forms of insurance at the state level. For example, some states require on-hook car insurance for some businesses. Consult your state's business regulatory requirements before you forgo the coverage.

The Coverage Applies to Towing for Pay

Even if your business or the government requires on-hook car insurance, the policy will only come to your rescue in case of a covered risk. Specifically, the coverage only applies if an accident or loss occurs during for-pay towing. For example, the coverage doesn't apply if:

  • One of your employees causes an accident while towing their personal car
  • You cause an accident while towing a mobile home
  • You damage a friend's car while towing their car as a favor

The insurance company will investigate each claim to confirm whether the policy's terms and conditions apply.

The Coverage Excludes Certain Cars

On-hook car insurance depends on risk analysis, just like other forms of insurance. Insurance companies analyze risks to set rates, limits, and exclusions. For example, on-hook auto insurance typically excludes vehicles that would cost too much to replace or repair in case of damage. Many insurance companies exclude antique cars, racecars, and personal boats.

The Coverage Is Available As Bundled Coverage

Many car insurance companies offer on-hook coverage as a rider. Thus, you do not always need to buy a separate policy for the coverage. The company will analyze your risk factors, such as your business and the number of cars, to determine your rates. The company then adds your on-hook coverage rates to your main car insurance policy.

Use the above information to assess your need for on-hook car insurance. Use an insurance agent to help you analyze your insurance needs and shop for the best coverage. For more information about commercial auto insurance, contact a local service.