Hey guys, Jim here again. If you run a tow truck business in New York or New Jersey, you’ve probably heard people talk about on-hook and garagekeepers insurance. When I first started out, I thought they were the same thing. Turns out, they’re completely different — and mixing them up could cost you big time if something goes wrong.
Let me explain it the way my broker finally explained it to me.
On-hook coverage protects vehicles while you’re towing them.
Let’s say I’m hauling a customer’s car down the BQE and another driver cuts me off. I slam on the brakes, and the car I’m towing swings and gets damaged. That’s when on-hook coverage kicks in. It pays to repair or replace that customer’s vehicle while it’s in transit — basically, anytime it’s attached to your truck.
Now, garagekeepers insurance comes into play when the vehicle is off the truck and in your care — like parked in your yard, storage lot, or shop. So if I drop a car off at my lot overnight and it gets stolen, vandalized, or damaged in a fire, garagekeepers is what covers that loss.
Here’s the simple way to remember it:
On-hook = covers vehicles while towing
Garagekeepers = covers vehicles while stored
I’ve met plenty of tow truck owners who only had one of these and thought they were covered for both situations. That’s a dangerous mistake. If you store cars even for a few hours, you’ll want garagekeepers too. Many insurance companies can bundle both together so you’re fully protected no matter where the car is.
At the end of the day, both coverages are about one thing — protecting the customer’s car while it’s in your hands. Whether it’s hooked up to your truck or sitting in your lot, you don’t want to risk paying out of pocket for damages.
If you’re not sure whether your policy includes both on-hook and garagekeepers coverage, call The Sarrica Insurance Group at 516-277-0812. Or, fill out this quick form to get a quote: Get a Business Insurance Quote.
Trust me, it’s worth double-checking before something happens.