A Tow Truck Is Not Always A Tow Truck

Brian J Riker I have noticed a lot of chatter lately about the Carvana home delivery truck with tow operators debating if it is a tow truck or if the driver is a tower. This has spurred me to discuss the differences between a tow and a transport. The same argument could be made regarding repossession and towing. Although the equipment is often similar, that is where the likeness ends. There is a legal difference between towing and auto transport that can get unprepared towers in hot water. In the current issue of American Towman Magazine (December), I write about thinking outside the box to grow your company, or in times like these brought on by the pandemic, survive. In previous articles about diversification, I have suggested towers work with their local car dealers to offer door to door service, similar to the model used by several online automobile retailers. Done right, it can be a very profitable business line. Think about it. Having the convenience of scheduled work sure would be nice. For those of you thinking about getting into the auto transport world, or just hauling anything other than a wrecked or disabled motor vehicle from the primary point of disablement, several things can get overlooked which could lead to financial or legal trouble. The first, and most important, is insurance. Your typical on-hook policy does not cover transport work. Read your policy closely and discuss with your agent your full business plans. You will likely find the vehicles you tow must be either going back to your shop or be wrecked or disabled and coming from where they first became wrecked or disabled or some other place of repair. You will also find the typical on-hook policy does not cover anything other than these vehicles, so that skid steer or tool-box you are hauling is not covered should there be a loss. The next, and possibly equally important issue is operating authority. In many states, and under Federal regulation, wrecked or disabled motor vehicles from their primary point of disablement are an exempt commodity. This means for-hire motor carrier authority is often not required for a towing company that only handles this limited scope of work. Once you haul anything else, including wrecked cars to a salvage auction or even just from your lot to a body shop for repair (as a secondary tow), you are then a fully regulated motor carrier and most often will need both state and Federal operating authority, also known as a motor carrier or MC number. Although the process for obtaining a motor carrier authority is not difficult, it may cause problems, or at least a significant rate increase, with your insurance company. Daily I get calls from towers looking to add operating authority only to find that their current commercial auto and on-hook policy will not cover them. Often this is after they have already applied for the operating authority and had their insurance filing rejected or found out their insurance company can’t file the required forms because their policy limits don’t meet the minimums. This is where the expensive, federally required, $1 million public liability policy comes into play. Many states will allow a basic towing company to operate with as little as $300,000, but once you require operating authority for transport work, your minimum liability levels increase dramatically. Even after you get your legal authority to do transport work straightened out and have the proper liability, commercial auto and cargo coverage, there still are more hurdles to jump. Transport work, outside of salvage transport, is very different from towing. Whether you are hauling vehicles to and from an auction, or as in the opening example doing home delivery service, the inspection and loading process is very different. You may be required to use specific apps on your phone to inventory the vehicles, adhere to a strict dress code or even complete delivery and ownership transfer paperwork on behalf of the dealership. These steps all take time and additional training. Even the loading procedures are very specific depending on the source of your work. It is becoming more common to haul single units directly from a rail yard or manufacturer facility and in many cases they will require a different method of securement than our lasso or K-style strap. Each vehicle manufacturer publishes a loading manual for new vehicle transport, that often must be followed for used transports, with different instructions than found in the towing section of the owner manual. From loading only facing forward, common for convertibles, to applying the parking brake and placing the transmission in park or first gear (for the rare manual equipped new vehicle), drive on/off (no winching allowed) and using over the tread straps there is a lot to learn. You may even need to heavily modify your carrier deck to meet these demands, which is why the home delivery truck Carvana (and others) use is a purpose-built vehicle from Cottrell. You may notice that these trucks do not have a winch and have pouched holes in the deck that serve double duty as traction to drive the vehicle on/off and as places for the hooks from the over the tread wheel straps. Even the earlier Carvana trucks that were built with Jerr-Dan carrier decks were modified to allow these straps to be used. So, when is a tow truck not a tow truck? When it is hauling anything other than a wrecked or disabled motor vehicle from where it first became wrecked or disabled. Outside of that, everything else you haul is a transport.