Should I add towing to my car insurance?

There has been a significant shift in how insurers deal with losses for things like towing, glass, and non-fault accidents. In the past, carriers saw these losses as incidental, and their only action would be to remove the coverage if they felt too many claims had been filed. Today, claims for these types of losses now have a negative impact on your insurance premiums and they will hit the customer with this surcharge or increase in premium for the next 3-5 years.

Here is a real-world example from a current client – the customer had filed 3 small towing claims with their previous company. As a result, their auto premiums increased by over $300 a year. Once a claim is filed, you cannot get the claim off your record and the insurance carrier is going to continue to surcharge this customer over the next 3-5 years. The impact varies from company to company, but the bottom line is the better choice is to insure for towing through a separate plan like AAA, Good Sam, or just self-insure. In addition, we have received a lot of feedback from clients stating the towing service through an insurance carrier is sub-par, tending to overcomplicate the process and generate problems getting a service vehicle to your location.

It is our opinion you’re better served going direct to AAA, Good Sam, or choosing to self-insure for these small losses.