Hey folks, Jim here. When I first started my tow truck company in New York and New Jersey, one of the things that confused me most was on-hook coverage. I knew I needed it, but I had no idea how much was enough. Let me break it down in plain English for you.

On-hook coverage is what protects the vehicles you’re towing if they get damaged while hooked up to your truck. Without it, if a customer’s car gets scratched, dented, or worse while in your care, you’re on the hook (no pun intended) for the repairs.

A lot of tow truck drivers start with $25,000 in coverage because it’s the baseline most brokers recommend. That’s fine if you’re mostly moving older or lower-value vehicles. But here’s the thing — in New York and New Jersey, you never know what you’re going to be towing. One day it’s a beat-up sedan, the next it’s a luxury SUV worth $80,000. If that car gets damaged and you only carry $25K, you’re stuck paying the difference out of pocket.

That’s why I personally bumped my on-hook coverage up. $50,000 is a solid middle ground, and $100,000 is even better if you’re regularly towing high-end cars or working with dealerships. Some contracts and motor clubs even require higher limits before they’ll give you work.

So here’s my rule of thumb:

$25K if you’re just starting out and mostly towing lower-value vehicles
$50K if you’re in areas where you’re likely to see newer or higher-value cars
$100K if you want to cover luxury vehicles and qualify for bigger contracts

At the end of the day, it’s about protecting yourself. The last thing you want is to lose a customer or your business over a gap in coverage.

If you’re not sure how much on-hook coverage makes sense for your tow truck company, call The Sarrica Insurance Group at 516-277-0812. Or, if you’d rather do it online, fill out this quick form: Get a Business Insurance Quote.

Trust me, it’s better to have the right coverage up front than to find out the hard way you didn’t.