Hey folks, Jim here. I run my own tow truck company across New York and New Jersey, and one of the first things I had to figure out was what insurance I actually needed to stay legal. It can get confusing, so let me break it down the way I wish someone had explained it to me when I was starting out.

The basics – liability insurance

Both New York and New Jersey require tow trucks to carry commercial auto liability insurance. This is what covers injuries or damage if I, or one of my drivers, cause an accident while on the road.

The minimum limits vary, but here’s the simple version:

If you’re towing cars across state lines, the federal DOT requires at least $750,000 in liability coverage.
Many jobs and contracts in NY and NJ won’t even look at you unless you carry $1 million in liability.

I went with the higher limit because it opens up more work opportunities and gives me peace of mind.

On-hook coverage

This one’s big for tow truck owners. Liability covers accidents, but it doesn’t pay if the vehicle I’m towing gets damaged. That’s where on-hook coverage comes in. I carry at least $25,000, but depending on the cars you tow (think high-end or luxury vehicles), you might want $50,000 or even $100,000.

Garage liability and garagekeepers insurance

If you’ve got a yard or a lot where you keep towed vehicles, you’ll want to look into two more things:

Garage liability, which covers accidents that happen on your business property.
Garagekeepers insurance, which covers customer vehicles while they’re in your possession.

State and federal filings

Since I run across state lines, I also had to make sure my broker handled the FMCSA filings like the MCS-90, and state filings such as the Form E. Without these, you’re technically not compliant, even if you already have a policy.

So, the short answer is this: to run legally in New York and New Jersey, you’ll need commercial auto liability (preferably $1 million), on-hook coverage (at least $25,000, but more if you tow expensive cars), garage liability and garagekeepers insurance if you store vehicles, and the right state and federal filings.

When I first started, I thought insurance was just another bill. Now I see it as the thing that keeps my business alive if something goes wrong.

If you’re a tow truck owner like me and need help setting this up, give The Sarrica Insurance Group a call at 516-277-0812. Or, if you’d rather do it online, just fill out this quick form: Get a Business Insurance Quote.