Garagekeepers Versus On Hook, in Plain Terms

These two coverages are frequently confused, and the distinction is simple once you see it.\n\nGaragekeepers coverage protects customers\' vehicles in your care, custody, or control at your premises. The car in your bay, on your lift, in your lot overnight waiting for parts. That is the coverage every repair shop needs, and most shops have it.\n\nOn hook coverage, sometimes written as cargo coverage for towing operations, protects a vehicle while it is being towed or transported. It responds to damage to the towed vehicle during hookup, during transport, and during unloading. Some forms also address the vehicle while it is in your temporary custody at the roadside.\n\nThey are separate coverages with separate limits, and the gap between them is exactly where a towing loss happens. A shop with garagekeepers and no on hook coverage has nothing covering the vehicle during the tow, which is the riskiest part of the entire transaction.

• Garagekeepers covers customer vehicles in your care at your premises
• On hook covers the towed vehicle during hookup, transport, and unloading
• They carry separate limits and neither substitutes for the other
• Auto liability covers injury and damage to others; physical damage covers your wrecker

What On Hook Coverage Actually Does and Does Not Do

On hook limits are usually modest by default, often set at a figure that made sense when the average towed vehicle was less expensive than it is now. Look at what you actually tow. A single late model pickup, a luxury sedan, or an electric vehicle can exceed a low default limit by itself. If you tow fleet vehicles, equipment, or multiple vehicles on a rollback, the limit should contemplate the maximum value on the deck at one time.\n\nThen read the exclusions, which are consistent across the market and surprising to new operators. Many on hook forms exclude or limit damage from improper hookup or faulty workmanship in securing the load, which is one of the more common causes of towing damage. Many exclude damage to the vehicle\'s contents and personal property inside it. Theft coverage may be conditioned on where the vehicle is stored and whether the lot is fenced, lit, or alarmed.

• Set on hook limits against the maximum value on the truck at one time, not an average
• Watch exclusions for improper hookup, faulty securement, and contents of the vehicle
• Confirm theft coverage conditions, including lot security requirements
• Determine which coverage applies to vehicles stored after a tow
• Schedule separate storage lots as locations

The Auto Liability Change Is Bigger Than People Expect

The coverage most affected by adding towing is not on hook. It is commercial auto liability.\n\nA tow truck operates on public roads, often at night, often in weather, frequently on the shoulder of a highway or at an accident scene. Operators get out of the vehicle in live traffic. The severity potential of a roadside incident involving a tow operator or a stranded motorist is high, and underwriters price towing accordingly. Shops that add a wrecker and expect it to be rated like a service van are in for a surprise.\n\nThree things follow. First, limits should be reviewed. A primary auto limit that is adequate for a courtesy shuttle is not adequate for highway towing, and an umbrella is generally appropriate.\n\nSecond, driver standards matter more than before. Motor vehicle records, experience, and training on hookup, securement, and roadside safety should be documented for every operator. If an operator will cross state lines, or if your trucks exceed certain weight thresholds, federal motor carrier requirements may apply, including driver qualification files, medical certification, and hours of service. Confirm what applies to your operation with the Federal Motor Carrier Safety Administration and your state motor vehicle agency rather than assuming a repair shop exemption.

• Towing is rated differently from service vehicles; expect a material change in auto premium
• Review primary auto limits and add umbrella coverage appropriate to highway work
• Document driver records, experience, and training in hookup, securement, and roadside safety
• Confirm whether federal motor carrier requirements apply to your trucks and routes
• Evaluate the work you accept: rotation, recovery, heavy duty, and damaged electric vehicles each add exposure

Review Your Shop and Towing Coverage

If you have added a wrecker, or are about to, the on hook limit, the auto limits, and the workers compensation classification all need to be set deliberately rather than discovered. We work with repair shops, body shops, and towing operations and will review the whole program with you. Schedule a conversation at calendly.com/grandbayfinancial.\n\nThis article is for general information and is not a substitute for policy language or professional advice.