Tow truck insurance in California: what the law and CHP require
A California tow company needs more than a truck policy. The state sets a liability floor, CHP rotation sets a higher one, and the car on your hook is covered by neither until you add the coverages built for it.
Written by Rigo Diaz
California tow insurance in numbers
Tow truck insurance in California starts with the liability your motor carrier permit requires: a $750,000 combined single limit for most for-hire tow companies, or $300,000 if every vehicle is under 10,000 pounds. CHP rotation adds $1 million for heavier classes, on-hook, garagekeepers, and garage liability.
Tow operators carry a risk most truckers never do: someone else's vehicle, on your truck or in your yard, every working day. A standard truck policy was not written for that, and the gaps tend to show up on the worst day of the year.
I spent more than six years in risk management before I founded Simplex, and I have led it for more than 25 years since. This guide covers what California law requires of a tow company, what CHP rotation adds, and where tow coverage most often falls short.
The full briefing, read aloud
7 chapters. Select one to jump to it.
Generated with AI text-to-speech from this article's key insights, in order, rather than reading it word for word. Chapter times come from a transcript of the audio. The article itself was written and reviewed by Rigo Diaz.
Key takeaways
Paid towing needs a motor carrier permit
DMV issues the MCP only with proof of liability insurance: $750,000 for most tow companies, or $300,000 if every vehicle is under 10,000 pounds GVWR and you haul no hazardous materials.
The second move can need a higher limit
The basic limit covers clearing a scene whatever the towed vehicle carries. Any later move needs liability adequate for that vehicle's cargo.
Auto liability excludes the car on your hook
The standard business auto form excludes property you transport or hold in your care, custody, or control. On-hook and garagekeepers fill that gap.
CHP rotation sets its own minimums
$1 million in liability for Class B, C, and D trucks, on-hook from $50,000 to $250,000 by class, garagekeepers to match, and $500,000 in garage liability.
A lapse stops the trucks
The MCP stands suspended the day a cancellation takes effect, and falling below CHP's minimums voids the rotation agreement immediately.
In this articleContents
What must tow truck insurance in California include by law?
By law, a for-hire tow company in California needs a DMV motor carrier permit (MCP), and DMV issues it only with proof of liability insurance. Under Vehicle Code 34631.5, that means a $750,000 combined single limit for most tow companies.
DMV's MCP rules cover anyone paid to transport property "regardless of vehicle size, type, or weight," and anyone running a commercial vehicle of 10,001 pounds or more, even in private use. You need a CA number from CHP before you apply.
| Your operation | Minimum liability |
|---|---|
| Only vehicles under 10,000 lb GVWR, no hazardous materials | $300,000 |
| Any other tow operation, no hazardous materials | $750,000 combined single limit |
| Hazardous materials | $1,000,000 to $5,000,000, by commodity |
Your insurer proves the coverage by filing a Certificate of Insurance (MC 65 M) with DMV. The private-car minimum of $30,000/$60,000/$15,000 that took effect on January 1, 2025 does not meet the MCP requirement.
Two more pieces sit beside the auto policy. Labor Code 3700 requires every employer to secure workers' compensation, and DMV asks for proof of it, or a signed exemption, with your application. If you tow for hire across state lines in trucks of 10,001 pounds or more, the federal minimum in 49 CFR 387.9 is also $750,000. Our California motor carrier permit page covers the application itself.
Why can a subsequent move need a higher limit?
Because the basic limit only covers the emergency move. Under 34631.5(c), a for-hire tow operator with that limit may make emergency moves "irrespective of the load" the towed vehicle carries. An emergency move is one of these:
- Removing a disabled or damaged vehicle from a highway
- Removing a vehicle from public or private property after a traffic collision
- Removing a vehicle to protect public health, safety, or property
- Removing a vehicle for impound or storage at a peace officer's direction
It covers only the first one-way trip from the scene to the nearest safe location. Any later move of that vehicle needs liability "adequate for the commodity" it carries, so moving a loaded hazmat truck from your yard to a repair shop can call for hazmat limits. The driver's license follows a similar first-move and subsequent-move split, covered in our guide to tow truck driver requirements.
Why doesn't auto liability cover the car on your hook?
Because the standard Business Auto Coverage Form (CA 00 01) excludes property damage to property "owned or transported by the 'insured' or in the 'insured's' care, custody or control." A customer's car on your bed or wheel-lift is exactly that. The MCP limits in 34631.5 leave it out too: they cover damage to property "other than property being transported by the carrier."
That is why a tow policy is a stack of coverages, each with its own job.
| Coverage | What it pays for | What it leaves out |
|---|---|---|
| Auto liability | Injury and damage your tow truck causes to others | The vehicle you are towing or carrying |
| On-hook | The customer's vehicle while it is in tow | Vehicles sitting in your storage yard |
| Garagekeepers | Customers' vehicles in your care at your yard | Losses you are not legally liable for, unless written on a direct basis |
| Garage or general liability | Injury and damage from your premises and business operations | Driving your trucks on the road |
| Physical damage | Your own tow trucks after a collision, theft, or fire | Anyone else's property |
Garagekeepers deserves a closer read. IRMI notes it is available to auto-related businesses under the Garagekeepers Coverage endorsement (CA 99 37), and that coverage depends on establishing your liability. Direct coverage, formerly called extra legal liability, pays regardless of fault. Ask your agent which one you have.
Which trucks count as covered autos depends on the symbols on your declarations page, explained in our guide to commercial auto symbols. For what a premises policy covers and excludes, see CGL insurance for truckers.
What insurance does CHP rotation towing require?
More than the state minimum. CHP's 2026-2027 Tow Service Agreement (TSA) sets limits by tow truck class, from an insurer admitted in California, or admitted in your home state and authorized to do business in California.
| Class (minimum GVWR) | Auto liability | On-hook and garagekeepers |
|---|---|---|
| A, light duty (14,000 lb) | $750,000 | $50,000 |
| B, medium duty (33,000 lb) | $1,000,000 | $100,000 |
| C, heavy duty (52,000 lb, three axles) | $1,000,000 | $200,000 |
| D, super heavy duty (54,000 lb, three axles) | $1,000,000 | $250,000 |
The liability minimums must include non-owned and hired auto coverage. The TSA also requires uninsured motorist coverage at the legal minimum, and garage liability, including premises and operations, of at least $500,000 combined single limit.
Garagekeepers must match your on-hook minimum for vehicles in your storage yard, and you must show proof of insurance for every storage facility listed on your CHP 234A.
Proof is a certificate of insurance, and the policy must give CHP at least 30 days' written notice before it is canceled or expires. Fall below any of these minimums and the TSA is nullified immediately, you come off the rotation list, and the Area commander can take disciplinary action.
How should a tow company set limits above the minimums?
Size each limit to your worst realistic day, not to the minimum on a form. Three questions set the numbers:
- What is your heaviest tow? On-hook should cover the most valuable vehicle your biggest truck can be sent to move, including a loaded commercial truck on a subsequent move.
- How full does your yard get? Garagekeepers should cover the value of every vehicle your lot can hold on a busy weekend, not one car at a time.
- What is your strictest contract? CHP rotation, a city or county program, a motor club, and a dealership account can each name different limits and certificate wording. Build the policy to the strictest one.
I would rather an operator explain a gap to an underwriter before a claim than to a customer after one. For how carriers price the limits you choose, see what commercial truck insurance costs.
What if you also do repossessions?
Tell your agent before the first one. Vehicle Code 615 excludes a repossessor's tow vehicle, one registered to a licensed repossessor and used only in that business, from the definition of a tow truck. Don't assume a policy written for roadside and police calls extends to it.
How to keep California tow coverage from lapsing
A lapse costs more than the claim it leaves uncovered, because it can stop your trucks. A short routine prevents most of them.
Step 1: Match every truck and yard to the policy
List each truck with its class and each storage yard, then compare that list with your policy schedule and your CHP 234A. A new rollback or a second lot belongs on both before its first call.
Step 2: Watch the MCP filing
Under Vehicle Code 34630, your insurer must give DMV 30 days' written notice before canceling, and your permit is suspended on the date coverage lapses. Reinstatement costs a fee unless you show there was no lapse, and you can't run your trucks while suspended.
Step 3: Renew before the notices go out
CHP gets 30 days' notice when a policy is due to expire, not just when it is canceled. Start the renewal early enough that neither agency ever sees a gap.
Step 4: Report new work before you do it
Heavy recovery, subsequent moves of loaded commercial trucks, hazardous materials, repossessions, and a new storage location can each change the limits or the policy you need.
Step 5: Keep a current certificate for every contract
CHP, each motor club, and each city or commercial account may need its own certificate. Keep a list of who holds one, and send updates at every renewal.
How Simplex helps California tow operators
The permit, the policy, and the contracts all have to line up. We look at the work you actually do, then the paperwork.
California truck insurance
As a broker, we quote and place commercial truck insurance in California, and a licensed agent can review your limits against the contracts you hold.
Your motor carrier permit
Our team handles the CA number, the California motor carrier permit application, and every renewal, so the insurance on file matches the permit.
Coverage for your own trucks
Wreckers and rollbacks are expensive to replace. Physical damage insurance covers the trucks you own after a collision, theft, or fire.
Frequently asked questions
How much insurance does a tow truck need in California?+
Do tow trucks need a motor carrier permit in California?+
Is on-hook coverage required in California?+
What is the difference between on-hook and garagekeepers coverage?+
Does a not-for-hire tow truck need commercial insurance in California?+
Where this information comes from
The requirements below come from California statutes, the California DMV, the California Highway Patrol, federal regulation, and standard insurance forms, all checked on October 19, 2026. Insurers can change standard wording by endorsement, so confirm your own policy with your agent.
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1
California Vehicle Code — Section 34631.5
MCP liability minimums ($300,000, $750,000, hazmat levels) and the tow truck emergency-move and subsequent-move rules.
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2
California Vehicle Code — Section 34630
Proof of insurance for the MCP, the 30-day cancellation notice, and suspension when coverage lapses.
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3
California DMV — Motor Carrier Permits
Who needs an MCP, the CA number from CHP, the MC 65 M certificate, and the workers' compensation proof.
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4
California Highway Patrol — 2026-2027 Tow Service Agreement
Rotation insurance minimums by tow truck class (Element 14) and the class definitions (Element 9).
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5
ISO Business Auto Coverage Form CA 00 01 10 13 (County of Sonoma copy)
The care, custody, or control exclusion in covered autos liability.
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6
IRMI — Garagekeepers coverage
Garagekeepers for auto-related businesses under endorsement CA 99 37, contingent on legal liability.
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7
California Labor Code — Section 3700
Every employer must secure workers' compensation.
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8
eCFR — 49 CFR 387.9
The federal $750,000 minimum for for-hire interstate carriers of nonhazardous property.
Written by
Rigo Diaz
Founder & CEO, Simplex Group
Founder and CEO of Simplex Group, with more than 25 years leading the company and helping trucking entrepreneurs navigate compliance, insurance, and the day-to-day demands of running a carrier. Before founding Simplex, he spent more than six years in risk management, experience that continues to shape how he approaches insurance, compliance, and carrier risk today.
Published · Updated
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Insure the tows you actually make
Your liability limit keeps the permit active. On-hook, garagekeepers, and limits sized to each class of truck are what keep a bad tow from becoming your loss.
If you want a second look at your tow coverage before your next renewal or CHP enrollment, talk to our team.