How To Partner With Top Insurance Companies

One of the quickest and pain-free ways of getting involved in the towing business is to partner with insurance companies that offer roadside assistance. Roadside Assistance is an important part of the American landscape, it’s been around since 1915 when a fledgling car club called AAA saw the opportunity that existed and introduced a service to assist stranded motorists.


Everyday AAA alone receives more than 29 million calls per year for roadside assistance. And although they’re the largest, there are dozens of other companies providing the same type of service in the United States today.

People Hate Being Stranded

It’s easy to understand why it’s such big business, people hate to be stranded and Roadside Assistance saves them time, trouble, and money. They love the peace of mind that comes from having an 800 number in their wallet, and knowing that one call will bring much-needed help wherever they travel.

When you come to understand and appreciate this relationship, and partner with the top Insurance providers, you’ll be regarded as a valuable asset and business partner. And right now is a great time to get involved.

We suggest that you employ the Roadside Assistance Business Model to grow your roadside assistance business. It suggests exploitation of the four ways in which a stranded motorist, (a roadside assistance company’s ideal customer) finds service when in need. They are;

  1. Referrals
  2. Law Enforcement
  3. Google Online Search
  4. Motor Clubs (Insurance Companies)

Opportunities Abound

Although roadside assistance has been around for 100 years, the majority of motorists have not yet taken advantage of all that Insurance Companies have to offer. On US roads today, there are over 250 million vehicles with an average age approaching 12 years.

Couple that with the fact that there are over 170 million cell phone users in the US and you can begin to see the opportunities that exist? It’s the perfect recipe, with the result being success for your towing business.

Here’s Why Partnering With Top Insurance Companies Works

Americans have always been self-reliant, picking themselves up by their bootstraps. And when they can’t do something…when they don’t have the ability or expertise, they get a friend or relative to help. Yes that’s the way it’s been for a long time but things are beginning to change.

You’ve seen it…maybe you do it yourself. Everyday there are millions of people at restaurants, on trains, waiting for the bus…totally ignoring each other. They’ve all got their heads down looking at their phone or personal device, oblivious to the world around them. We’re not interacting with one another like we used to. This means real-world relationships are taking a back-seat.

How To Use Video On Your Towing Company Website


But what’s that got to do with the towing business?

Instead of relying on friends and family when stranded, motorists are quickly becoming accustomed to choosing another sort of self-reliance. They’ve become irreversibly attached to the roadside assistance that can easily be summoned with their smartphones.

And as this trend increases, and more people become addicted to calling roadside assistance… Inevitably there will be more need for the services of towing companies. And, as with any market, when demand is high and supply is low (not enough tow trucks), the rates for your services will increase.

Now is the time to take advantage of this perfect storm.

You could do what many other towing companies do…COMPLAIN. I’ve done it BUT IT GOT ME NOWHERE.

You could be like a jealous lover who despises the relationship motorists have with their Roadside Assistance, believing there’s no need for a middle-man to come in-between you and “your” customer.

But if you do that, you risk being viewed, by both the Insurance Company and the motorist, as a liability. And if that attitude persists, they’ll quickly look to replace you. So embrace the fact that motorists love Roadside Assistance and take advantage of the tsunami of calls that are on the way. Although you must be assured that you are continually making a sustainable profit, and you do that by knowing your average cost per tow working with motor clubs has a few advantages.

How Roadside Assistance works and how can you partner with top insurance companies to make a ton of money in the towing business?

How Insurance Companies and The “Roadside Assistance” Thing Works

In every transaction involving roadside assistance there are a minimum of three participants (although there can be as many as four or five). The three main players are the insurance company, the motorist, and the towing company.

To understand the nature of these transactions, and so you’ll know how to properly work with insurance companies, I’ll explain how each partner benefits from the relationship.

The Insurance Company:

Along with other products, Insurance Companies sell roadside assistance insurance to their customers. Their promise is that, should the motorist become stranded or in need of other services included in their roadside assistance package, they’ll find the closest tow truck to help them out.

Of course most Insurance Companies don’t own their own tow trucks. Instead, they contract with towing companies all over the country, large and small, to respond when a motorist has a claim. And generally, these Insurance Companies make their money by one or more of these three methods.

1. Direct pay

With a Direct Pay agreement, an Insurance Company charges the motorist receiving the service a direct fee. Here’s how it works. The motorist calls the Insurance Company when they need roadside assistance, the Insurance Company takes all of the information and contacts a local towing company, which does the work.

The motorist pays the Insurance Company an agreed-upon amount and the Insurance Company pays the towing company their fee. This is usually less than what the motorist has paid the Insurance Company. The Insurance Company then keeps the difference as their fee for providing the service.

2. Annual or monthly premium

The motorist pays an annual or monthly premium to the Insurance Company for the service. The Insurance Company has many policyholders who pay their premiums, and they only pay out only when service is requested and authorized, per the terms of the agreement. In essence, with this option the Insurance Company is playing a sophisticated numbers game using actuarial science and psychology to ensure that they don’t lose.

3. Fourth-party contract

The Insurance Company contracts with a company like a car manufacturer, another insurance company, or a wireless phone provider (fourth party), who then sells the Insurance Company’s services to their customers, or provides those services at no extra charge, as a perk, to their customers. In this scenario the Insurance Company is competing with others in their industry. In order to win, they promise the highest-quality service at the lowest rates while still operating at a profit. Sometimes, this method can result in rates for towers that are less than desirable.

Each Insurance company has its own business model and has worked with towers to hone it and make it work. But even though most Insurance Companies understand and value the relationship they have with their towing partners, you must be careful when deciding what companies to work with. Most are reasonable and value the service that tow truck operators provide and view what they do as an indispensable part of their business but others are not so easy to get along with.

Of course, there are other types of relationships in the Insurance Company world that I haven’t covered here, but the most important point is that Insurance Companies are in business to make money, and if you can help them do that, they’ll want to partner with you. If you’re looking for towing company insurance to protect your business from liability, you’ll want to check out this article.

The Motorist:

The motorist is the person in need of service. Traveling locally or cross-country, motorists can and do experience any number of difficulties, everything from flat tires to accidents. They use the services of an Insurance company for speed, economy, and peace of mind. Motorists’ expectations fall into three main categories.

1. Quick and easy service

Some motorists believe that finding a tow truck when they need one will be difficult, so they purchase roadside assistance. They do this in the hope that the Insurance Company’s connections will enable them to find an available towing company and expedite service.

2. A belief that towing companies will gouge them

For decades Insurance Companies have perpetuated the fear that towing companies will take advantage of stranded motorists. As a result, motorists fear that, without their Insurance Company’s involvement, they will be charged outrageous rates.

3. Fear of being stranded

Having Roadside Assistance assures motorists that they’ll find a towing company to help, no matter how remote the location.

The towing company:

Towing companies provide towing and related services. Upon receiving a call from a Roadside Assistance dispatcher, towers are usually asked to give an estimated time of arrival when they can respond to a motorists’ needs. Towers are compensated for their time through three main methods.

1. Contracts

So should you be a contracted roadside assistance provider for the insurance companies? Of course, this is an Insurance Company’s preferred method. They ask for a certain amount of free miles plus a standard hook, and a service-call rate that can be below the tower’s standard rates. A tower who signs this type of contract might be inclined to believe it includes entitlement to an exclusive area, and that the company will send all their customers his way if he lowers his rates and contracts with them. This isn’t always the case. Many times the Insurance Company will sign with multiple towers in the same area and choose arbitrarily or give preference to those with the lowest rates.

1. Primary or preferred provider

Some Roadside Assistance Companies will offer what’s called primary, or preferred-provider, status. This means that the contracted tower will be their first, and sometimes only, contracted provider in the area. But to attain this highly coveted status he’ll be asked to come off his rates. In other words, as a condition of being preferred or primary, he’ll be required to accept less money for each call. The reason many towers like and agree to this arrangement is the belief that the volume of calls will more than make up any potential loss from the lowering of rates.

2. Call-up, no contract

In this scenario the Roadside Assistance Company has a motorist who needs service, but there’s no contracted tower in the area, or there’s none available at that time. With no contracted provider available, the Roadside Assistance Company consults their list of known towers in the area (a list that can be populated by towers who’ve signed up but are not contracted), or the Roadside Assistance Company will perform an on-line search, if their primary list produces no results. When they find a tower to accept the call, the Roadside Assistance Company will pay him at his rates, usually with a credit card.

Now that you know about the opportunities that exist and how Roadside Assistance works the next step is to go to Guide To Partnering With Top Insurance Companies, where you’ll find a comprehensive list of the top Insurance companies providing Roadside Assistance and a free guide that shows you the 3 strategies of partnering with them.


If you aren’t in the towing industry yet, but are excited about this opportunity and want to learn how to start a towing company we can help. The Tow Academy has help thousands of people start and grow their towing and roadside assistance businesses, and we can help you too. From simple roadside assistance only, to heavy-duty police towing, we’ve got you covered. Give us a call.

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