|Thanks to Pete Jalbert of Doty & Giles Insurance for the following article.|
Make Sure You Have the Proper Coverage
(Before You Have a Claim)
Towing companies frequently find out they do not have the proper coverage until after they have a claim. Generally, they are not happy to find out the result of the claim either.
There are a few details in an insurance policy that should not be overlooked. One big one that I continually run into is "on hook" vs. "cargo" insurance. "On hook" means coverage for items while on the back of the tow truck. There is a huge difference between the two terms.
The description of "on hook" coverage is a land motor vehicle, trailer, or semi-trailer. That's it that's all. If you have a piece of construction equipment (forklift, backhoe, etc), boat, etc,), it is not covered by insurance if you have an "on hook" coverage form. None of the above are considered a land motor vehicle, trailer, or semi-trailer and therefore, coverage may be denied.
The description of "cargo" insurance is much broader. Basically, it will cover anything you have on your truck while being transported. This may include construction equipment, items in a semi trailer, containers, supplies, etc. This coverage is much more desirable for all of my clients (and rightfully so).
We all know that, as a towing company, you get some pretty weird requests to move items. Do yourself a favor and ask your insurance agent questions about your policy before you have a claim!