On-Hook Coverage: The Gap Most Operators Miss
On-hook coverage pays for damage to a customer vehicle while it is physically attached to your truck and being towed. It responds to collision damage during transit, vehicle drops, improper hookup damage, and road hazard incidents that affect the towed vehicle.
Standard commercial auto liability does not cover this. If a customer vehicle is damaged while on your hook and you carry no on-hook coverage, that claim comes out of pocket.
On-hook limits typically range from $50,000 to $250,000 per vehicle. The right limit depends on the value of vehicles you regularly tow. Operations running late-model or luxury vehicles need higher limits than those handling older stock.
Garagekeepers Coverage: What Happens After the Tow
Once a vehicle leaves your hook and enters your yard, lot, or impound facility, on-hook coverage no longer applies. Garagekeepers coverage takes over from that point.
Garagekeepers insurance covers customer vehicles in your care, custody, and control while stored at your facility. It responds to fire, theft, vandalism, weather damage, and collision incidents on your premises.
Two types are available:
- Legal liability: Pays only when your business is proven at fault. Lower premium, slower claim resolution.
- Direct primary: Pays regardless of fault. Faster resolution, better customer experience, higher premium.
For towing operations running an impound yard or storage lot, direct primary is generally the stronger choice. Customer vehicle disputes are common in impound situations. Coverage that responds without a fault determination keeps claims clean.
For how garagekeepers coverage differs from garage liability, see our garage liability vs. garagekeepers guide.
