Texas tow truck insurance, written into the permit
Texas is unusual in putting the insurance requirement for a tow truck in the licensing statute itself. Every tow truck used on a public roadway needs its own TDLR permit, the permit comes in three types, and Occupations Code Chapter 2308 states the liability and cargo insurance each type must show before the permit issues. The administrative rule at 16 TAC 86.400 adds the certificate, cancellation-notice, and lapse mechanics.
Tow truck insuranceOne permit per truck, three kinds of permit
The starting rule is Section 2308.101: a tow truck may not be used for consent or nonconsent towing on a public roadway in Texas without an appropriate permit, and each tow truck requires a separate permit (Texas Occupations Code Chapter 2308). The chapter defines the work by how the tow begins. A consent tow is one the vehicle's owner or operator summoned. A private property tow is authorized by a parking facility owner without the vehicle owner's consent. An incident management tow is one summoned to a traffic collision or incident scene, including removal of the vehicle, commercial cargo, and debris (Section 2308.002). The three permit types follow those definitions, and the insurance condition is stated inside each one.
| Permit type | Section | Liability insurance | Cargo insurance | Also permits |
|---|---|---|---|---|
| Incident management towing | 2308.103 | At least $500,000 | At least $50,000 | Private property and consent tows |
| Private property towing | 2308.104 | At least $300,000 | At least $50,000 | Consent tows, not incident management |
| Consent towing | 2308.105 | At least $300,000 | Not stated | Consent tows only |
Figures are the statutory amounts "for the tow truck" as of 2026, and they are floors the permit will not issue below, not a recommendation. Each section also requires evidence that the truck is equipped to tow light-duty or heavy-duty vehicles according to the manufacturer's towing guidelines. Section 2308.110 adds that the coverage must come from an insurer authorized to do business in Texas unless state law allows self-insurance, that evidence of insurance is filed with the department, and that evidence in a form the department approves is kept in the cab of each permitted truck.
What the TDLR rule adds: 16 TAC 86.400
The commission is directed to adopt rules for permitting tow trucks and licensing operators and companies (Section 2308.057), and the insurance rule it adopted is 16 Texas Administrative Code Section 86.400, Insurance Requirements, Tow Truck Permits. It restates the statutory figures as a combined single limit of liability per occurrence, with the $50,000 cargo figure named as "cargo or cargo on hook" coverage per incident, and it does four things the statute does not spell out. Certificates of insurance are submitted electronically with the initial application, at renewal, on a change in the business, and whenever the department asks. The insurer must be licensed and authorized in Texas under the Insurance Code, and the name and address on the certificate must match the permit. Coverage must be kept in force at all times, and the certificate must carry a provision giving the department thirty days' notice before a cancellation takes effect. When coverage lapses without a replacement filing the department may revoke, and a permit holder whose insurer becomes insolvent has ten days to file replacement coverage.
TDLR's own permit page puts the same figures in a table and adds the administrative facts an operator budgets around: a non-refundable application fee of $75 per truck and a permit term of up to one year from issue (TDLR, tow truck permits).
Operators, companies, and the local layer
Permits attach to trucks. Licenses attach to people and companies. Under Section 2308.151 a person may not perform towing operations or operate a towing company without the appropriate license, and the operator licenses come in the same three types as the permits: an incident management license to drive a truck with an incident management permit, a private property license for a private property permit, and a consent tow license for a consent permit. TDLR requires incident management and private property applicants to be certified through an approved program before licensing; consent tow operators do not need certification. The application fee is $100 and the license runs one year from issue (TDLR, tow operator licenses). An underwriter will ask which license and permit types you hold because they describe the work, and incident management work is the highest-exposure class in the chapter.
The yard is regulated separately. TDLR describes a vehicle storage facility as a privately owned garage or parking lot that stores or parks ten or more vehicles per year without the owner's consent, and licenses those facilities and their employees under Chapter 2303 (TDLR, towing and vehicle storage). On the insurance side that is the garagekeepers exposure, and one national carrier notes that Texas and Virginia name these coverages differently from the rest of the country: the in-tow coverage is called garagekeepers legal liability there and the yard coverage is called storage location (Progressive Commercial). Ask the agent to name which form answers which exposure so a quote that says "garagekeepers" is not read as covering the lot when it covers the hook.
Below the state sits the city or county. Section 2308.201 lets a political subdivision regulate the operation of a tow truck to the extent federal law allows, and specifically lets it require registration of any tow truck that performs a nonconsent tow in its territory, regardless of where the owner's place of business is, with local license or permit fees capped at $15. Rotation lists and impound contracts run through that authority, and their certificate conditions are set locally. For the federal layer, which reaches a Texas operator only when the work is for-hire carriage across state lines, see the three-level section of our national tow truck insurance page, or start at the overview.