Personal Auto - Towing Another Car

[insurance1822]

I have a personal lines client who's a career mechanic & he also fixes cars on the side. He says about 12x/year he'll take his truck (and his trailer..) and pickup vehicles...tow them back to his house & fix them.

1.) I'm about 100% positive if something happens to the car on his trailer, his insurance won't cover that.

2.) Since physical damage follows the car, would the insurance company of the person who owns the car on his trailer provide collision if he crashes/

3.) If that company comes back to our insured, again...his carrier would deny it right?

 

[hesse]

your insured would need garage keepers insurance in order for him to provide coverage for it. Tow Trucks call it on hook coverage.

The other can of worms your opening if you have him written on a personal policy he is using his vehicle to tow another vehicle for business purposes which may result in them denying a claim he gets into also.

 

[insurance1822]

So how are "on hook" and garagekeepers different." I thought garage-keepers was for a mechanic *driving* a clients car to see how it's functioning etc (but wasn't for towing.)

I thought on hook is the only thing that covers a car on a tow truck or trailor?

 

[Placementkid]

On-Hook Towing insurance will pay to repair or replace a vehicle you don't own if it is damaged by a collision, fire, theft, explosion or vandalism while you are towing or hauling.

Garagekeepers Legal Liability coverage is an optional coverage designed for business owners who offer towing services or operate service stations. It protects a customer's vehicle when you are keeping it at a covered location for parking or storing, or to perform service.

 

[djs]

Curious - the cars he fixes, does he buy them, fix them and then resell them? If he owns them, then it may be fine.

Also, at 12 cars a year, is this something he does as a favor or does he charge for it? Not sure it matters, but if there is no payment for labor, then you can argue its a hobby, not a business. Of course, if he has a business license and all the appropriate permitting, then that goes out the window and at 12 cars a year, he probably should.

I'm not sure it would be a flat denial for a claim, but my guess is, there would be a LOT of questions asked about hobby vs business vs a favor for someone as a friend, etc.

Dan

 

[hesse]

So how are "on hook" and garagekeepers different." I thought garage-keepers was for a mechanic *driving* a clients car to see how it's functioning etc (but wasn't for towing.)

I thought on hook is the only thing that covers a car on a tow truck or trailor?

Depends on what company and how they want to write it. Some companies have on hook coverage. That pays when the vehicle is being towed. Garage keepers legal liability could possibly be a little more broad depending on the form. I have a tow guy with another company that writes it as direct primary garage keepers.

Direct primary garage keepers will pay no matter who is legally liable for the damages.