Starting a towing company means checking state and city towing licenses or permits, any rotation list requirements, buying the right trucks and equipment, getting commercial auto, on-hook and garagekeepers insurance, finding a storage lot that meets local rules, training drivers in safe operations, deciding on non-consent and private property work, and setting up dispatch and a website.
Worked example: a two-truck light-duty operation
Ray worked as a tow operator for eight years and opens his own company with a used wheel-lift and a new rollback. He checks with his city and county about towing licenses, rate rules for non-consent tows and the requirements for police rotation lists. He leases a fenced lot that meets the county's requirements for an impound storage facility, with lighting and posted release hours.
He buys commercial auto liability, on-hook coverage for vehicles while being towed, and garagekeepers for vehicles in storage. He signs up with two motor clubs for roadside calls, sets up a dispatch app that tracks trucks and calls, and launches a website with his service area, services, a request-help form and licensing details. He trains himself and his second driver on traffic incident management and the safe use of each truck.
Setup steps in order
| Step | Done looks like |
|---|---|
| Licensing check | City, county and state rules known |
| Business setup | Entity, EIN, banking |
| Trucks and equipment | Wheel-lift and rollback ready |
| Insurance | Commercial auto, on-hook, garagekeepers |
| Storage lot | Meets local requirements |
| Rotation and motor clubs | Applications submitted |
| Dispatch | App, phone routing, call logs |
| Training | Safe operations and traffic incident management |
| Website and Google | Service area, request form, licensing |
Mistakes new towing companies make
- Charging non-consent rates above local maximums
- Storage lots that do not meet local requirements
- No on-hook insurance
- Relying only on motor clubs that pay low rates
- Drivers without traffic incident training
What this industry needs from a website
Dispatch contact, coverage and service information.
- Home with call button
- Services
- Service area
- Rates disclosure where required
- About and licensing
Free tools
Common questions
Do I need a towing license?
Many cities, counties and states require one, especially for non-consent towing. Check every jurisdiction you work in.
What insurance do towing companies need?
Commonly commercial auto liability, on-hook (cargo) coverage and garagekeepers for stored vehicles. Ask an agent who insures towing.
How do I get on the police rotation list?
Apply through the local police or sheriff agency; requirements often include equipment, response times, insurance and a storage lot.
Do FMCSA rules apply?
They can, depending on truck weight and whether you cross state lines. FMCSA's registration pages explain.
Should I start with motor club work?
Many new companies do for steady calls; build direct accounts alongside it.
Sources
- SBA: 10 steps to start your business
- SBA: Apply for licenses and permits
- Towing and Recovery Association of America
- FMCSA: Registration
Sources checked October 6, 2026. Rules, fees and forms change; confirm details with the agency or provider before you act. This guide is general information, not legal, tax or insurance advice.
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