Tow Truck Insurance: Minimum Coverage by Permit Type
Tow truck insurance minimums depend on the type of tow. In Texas, TDLR requires per truck per incident: $500,000 liability plus $50,000 cargo or on-hook for incident management towing, $300,000 plus $50,000 for private property towing, and $300,000 liability for consent towing (16 TAC §86.400). Interstate for-hire work also falls under federal 49 CFR 387.9 minimums.
By TruckerStack Editorial, AK Digital Marketing LLC · Published 2026-11-05 · Updated 2026-11-05 · checked against the official sources cited · Editorial policy · Not insurance, legal or financial advice.
Texas tow truck minimums (TDLR)
Every tow truck used for towing on Texas public streets needs its own TDLR permit, and each permit type has its own insurance floor (TDLR: Apply for a Tow Truck Permit).
| TDLR permit type | What it allows | Liability (combined single limit) per truck per incident | Cargo / on-hook per truck per incident |
|---|---|---|---|
| Incident management | Non-consent tows started by a peace officer and any tow from a public roadway or traffic incident; may also do private property and consent tows | $500,000 | $50,000 |
| Private property | Non-consent tows authorized by a parking facility owner (apartments, restaurants, paid lots); may also do consent tows | $300,000 | $50,000 |
| Consent | Tows requested by the vehicle's owner or operator only | $300,000 | Not required |
Updated 2026-11-05. Sources: 16 TAC §86.400(d)(1); TDLR: Apply for a Tow Truck Permit.
Texas filing rules that trip up new tow companies
- Texas-licensed insurer: the certificate must come from, and be submitted electronically by, an insurer licensed in Texas (86.400(a)-(b)).
- Exact name and address match with your TDLR application or permit (86.400(c)).
- 30-day cancellation notice: the certificate must oblige the insurer to notify TDLR 30 days before a cancellation takes effect (86.400(d)(3)).
- Replace before the cancel date: TDLR may revoke a license if a policy is cancelled and no replacement is filed before the cancellation date (86.400(e)(2)).
- Insurer insolvency: if your insurer fails and you lose coverage, you must file new proof of insurance and an affidavit about any accidents during the gap no later than the 10th day after coverage lapses (86.400(f)).
- TDLR notifies the Texas Department of Public Safety and other law enforcement agencies when a permit is revoked for lack of insurance (86.400(g)).
Federal minimums for interstate for-hire work
If your operation is for-hire transportation of property in interstate commerce, the federal financial responsibility floors in 49 CFR 387.9 apply on top of any state permit rules:
| Interstate for-hire freight | Federal minimum |
|---|---|
| General freight, GVWR 10,001 lb or more | $750,000 |
| Oil (49 CFR 172.101 listed) | $1,000,000 |
| Certain hazmat (e.g. Div 1.1–1.3, bulk 2.3 Zone A) | $5,000,000 |
| General freight, GVWR under 10,001 lb (for-hire) | $300,000 |
Sources: 49 CFR 387.9 and 49 CFR 387.303 (under-10,001 lb tier).
Check whether you also need a USDOT number and FMCSA operating authority in our USDOT, MC, BOC-3 and UCR guide, and confirm any federal filing shows up with the authority & insurance checker.
Coverages tow operators usually carry
- Auto liability: at least the state or federal minimum; motor clubs, municipalities and rotation lists may write higher limits into their contracts.
- On-hook / cargo: damage to the customer's vehicle while it is in tow. Required in Texas for incident management and private property permits.
- Garagekeepers: damage to customer vehicles held on your lot. It is not part of the TDLR minimums, so ask about it separately.
- Physical damage: your own wrecker, rollback or rotator; lenders usually require it.
What affects tow truck premiums
Premiums are set by each insurer and we do not publish price estimates. What moves a quote: authority age (new MCs are rated higher), driver MVR and CDL experience, radius and lanes, commodity, vehicle value and GVWR, garaging ZIP, CSA/inspection history (check yours in our DOT lookup), deductibles and limits above the minimum that brokers often require.
For tow operators, the permit type (incident management has the highest floor), equipment value and vehicle storage also matter. Put the premium into the cost per mile calculator before you price tows.
Related
- Commercial truck insurance hub
- Insurance minimums table
- Authority & insurance checker
- Check any carrier's insurance on file
- Texas commercial truck insurance
- Cargo insurance for truckers
FAQ
How much insurance does a tow truck need in Texas?
Per truck per incident: $500,000 liability and $50,000 cargo/on-hook for incident management towing; $300,000 liability and $50,000 cargo/on-hook for private property towing; $300,000 liability for consent towing (16 TAC 86.400).
Is on-hook insurance required for consent tows in Texas?
No. TDLR lists cargo or on-hook coverage as not required for consent tow permits, but it is required for incident management and private property permits.
Can my Texas tow permit be revoked if my insurance is cancelled?
Yes. TDLR may revoke a license if the insurance is cancelled and a replacement policy is not filed before the cancellation date (86.400(e)(2)).
What federal insurance applies to interstate towing?
For-hire interstate carriers of property must meet 49 CFR 387.9: $750,000 for general freight in vehicles of 10,001 lb GVWR or more, and higher limits for oil and hazmat.
Do you publish tow truck insurance prices?
No. Premiums are set by each insurer; compare written quotes for the same limits and permit type.