Should I have car insurance towing and labor coverage?
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UPDATED: Jul 14, 2021
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When you’re purchasing a policy for a new or used vehicle, there is certain coverage that will be required by your state. But there is also optional coverage you can add and remove at your discretion. One of those options is towing and labor, a type of insurance coverage that is increasingly becoming more widely used across the United States.
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As the Pennsylvania Insurance Department so adeptly points out, towing and labor coverage on your policy covers the cost of having a disabled vehicle towed or restored to running condition so the driver can at least get home or to the garage. Typically this type of insurance is utilized for things like flat tires, dead batteries, and so on. Sometimes it’s known as roadside assistance protection.
Age and Condition of Your Vehicle
IBIS World, a well-known company in the business of market research, estimates the auto towing and roadside assistance industry is worth some $5 billion annually. They further estimate the industry sees an average annual growth of about 2.7%. Such growth indicates an expectation that both prices and profit will go up from year to year, which, inevitably, also dictates the average consumer will pay more for search services.
For a brand-new vehicle, the extra insurance coverage is probably not worth it if it costs you more than $40 or $50 per policy period.
The likelihood of your vehicle needing towing services while it’s still so new is relatively low. On the other hand, once a vehicle reaches the 50,000 to 60,000 mile range, the likelihood for breakdowns begins to increase. By the time you turn the odometer on 100,000 miles, having towing and labor coverage becomes almost a necessity.
Determining whether towing and labor insurance would benefit you really is a question of simple math. Add up all of the towing and labor expenses you paid out of pocket over last 12 months and compare it to what your insurance company would charge you for the extra coverage. Also compare the number of times you had to call for a tow versus how many times your insurance coverage could be used; some insurance companies limit the tows to three or four times annually
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Automobile Club Benefits
If you belong to an automobile club it’s quite likely that towing and labor is part of the membership privileges you pay for. For example, AAA is one of the most widely recognized names among automobile clubs in the United States and Canada. One of the things they are most known for is their roadside assistance program that provides towing and labor for disabled vehicles as part of membership. Auto clubs like AAA typically have various levels of membership, so you’d have to check with your club to see if towing and labor is included at your level.
If you’re considering joining an automobile club just for the roadside assistance benefit, you should probably check with your car insurance company first. It may not be worth it if they are willing to give you a better rate than what you’d pay for club membership.
On the other hand, most automobile clubs offer a lot more with a membership that simply roadside assistance. You can avail yourself of travel discounts, travel planning services, concierge services, and more. Some even offer discounts on auto insurance through specific insurance companies.
Collision and Comprehensive Inclusion
One last thing to consider regarding towing and labor is pointed out on the Pennsylvania Insurance Department website. They state that towing and labor is often carried by those who also have collision and comprehensive coverage as well. What they fail to mention is that many insurance companies include the extra coverage as part of collision and comprehensive.
As the thinking goes, a vehicle involved in accident is probably going to need to be towed anyway, so it’s best to include it across-the-board.
When it is part of your comprehensive and collision coverage, you normally won’t see a financial breakdown allowing you to find out exactly how much paying for it. If you’re concerned that you might be paying too much for towing and labor you can always ask a representative exactly how much it costs and if it’s possible to get comprehensive and collision without having it included.
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