Carrier types
Starting a tow truck business: state licensing first, federal rules second
Tow trucks are the most state-regulated trucks on the road. Your state licenses the operation, your county or city runs the rotation list, and federal law steps in only when you haul vehicles across state lines for hire. Start with your state's rules, then add federal registration if needed.
By Evan Reid, Founder of Haul Handbook · Updated Jul 18, 2026
Where towing is regulated
Tow truck licensing sits mostly at the state and local level: states run tow operator programs and consent rules, while counties and municipalities manage police rotation lists. A tow company hauling vehicles across state lines for hire falls under the same federal registration rules as any interstate for-hire property carrier.
The practical order: your state's tow program and any intrastate carrier registration come first. Look up your state in intrastate authority by state and check whether it requires in-state carriers to hold a federal identifier in state DOT number requirements.
When the federal layer switches on
Haul wrecked or repossessed vehicles across a state line for payment and you are an interstate for-hire property carrier: that means a USDOT number, operating authority, and the difference between the two explained in operating authority vs USDOT number. Driver licensing follows the same federal weight classes as every other truck, covered in CDL vs non-CDL.
Towing shares its equipment-heavy, local-market shape with dump trucking; if you are weighing both, the dump truck business guide walks the same state-first decision in the other direction.
Insurance built for towing, not just for the truck
A tow operator's commercial auto liability policy pays for harm the truck does to other people and their property. It does not pay for the customer's vehicle, whether that vehicle is riding on the hook or sitting in your lot. Those are two separate exposures a tow business insures on purpose.
On-hook coverage
On-hook coverage (also written as cargo or cargo-on-hook coverage) pays for physical damage to a customer's vehicle while it is hooked up and under tow. Auto liability excludes the vehicle you are hauling, so operators add on-hook coverage for the units they move. Some states build this into licensing: Texas makes a tow company carry cargo or cargo-on-hook insurance alongside its liability policy to be licensed.
Garagekeepers coverage
Garagekeepers coverage protects vehicles left in your care, custody, and control: the cars sitting in your storage lot or yard after a tow. That is separate from on-hook (the vehicle in transit) and from auto liability (harm to others), so operators who store vehicles carry it on top. States that license storage lots require the coverage before you open: Texas will not license a vehicle storage facility until it holds an insurance policy sized to the lot's capacity.
Tow programs in the states we cover
Because towing is licensed state by state, start with the agency that runs your state's program. Each state below links to its own guide and to the primary agency or statute that sets the rules.
Texas licenses the whole operation through TDLR: tow companies, individual tow trucks, tow truck operators, and the vehicle storage facilities that hold towed cars. You register, insure, and permit each piece before you run a call.
California regulates tow work through the Highway Patrol's chapter of the Vehicle Code. A tow truck driver must hold a tow truck driver certificate issued by the DMV, and the employer has to review the certificate, keep a copy on file, and make its driver roster available for state inspection.
Florida has no single statewide tow license. State law sets minimum standards for towing a vehicle parked on private property without consent, then expressly lets municipalities and counties add their own rules, including regulating the rates for those non-consent tows. Your real rulebook is the city or county you work in.
Frequently asked questions
Do tow trucks need a USDOT number or MC authority?
- Tow truck licensing sits mostly at the state and local level: states run tow operator programs and consent rules, while counties and municipalities manage police rotation lists. A tow company hauling vehicles across state lines for hire falls under the same federal registration rules as any interstate for-hire property carrier.
Why do tow rates and rules change from city to city?
- 49 U.S.C. 14501(c) preempts state regulation of prices, routes, and services of motor carriers, but paragraph (c)(2)(C) preserves state and local authority to regulate tow truck operations performed without the prior consent or authorization of the vehicle's owner or operator. That carve-out is why non-consent tow rates and rotation rules differ from one city to the next.
How do I get on a police rotation list?
- Rotation lists are run by the agency that dispatches them: a county sheriff, a city police department, or a state police post. Each publishes its own application, equipment, storage lot, and response time rules, so contact the agency covering the roads where you want calls.
Does a tow truck driver need a CDL?
- A CDL is required for drivers in interstate, intrastate, or foreign commerce driving a vehicle that meets one of the CMV classifications. FMCSA does not issue CDLs; state governments do. Heavy wreckers and multi-vehicle carriers can meet those classifications; the weight math, not the tow itself, decides it.
What is the difference between on-hook and garagekeepers coverage?
- On-hook coverage (also written as cargo or cargo-on-hook coverage) pays for physical damage to a customer's vehicle while it is hooked up and under tow. Auto liability excludes the vehicle you are hauling, so operators add on-hook coverage for the units they move. Some states build this into licensing: Texas makes a tow company carry cargo or cargo-on-hook insurance alongside its liability policy to be licensed. Garagekeepers coverage protects vehicles left in your care, custody, and control: the cars sitting in your storage lot or yard after a tow. That is separate from on-hook (the vehicle in transit) and from auto liability (harm to others), so operators who store vehicles carry it on top. States that license storage lots require the coverage before you open: Texas will not license a vehicle storage facility until it holds an insurance policy sized to the lot's capacity.
Sources
Primary statutes and official agency pages this guide relies on. Laws and fees change, so confirm against the current source before you act.
- Get Operating Authority (Docket Number) · Federal Motor Carrier Safety Administration (FMCSA), U.S. DOT
- 49 U.S.C. 14501, Federal Authority Over Intrastate Transportation · Office of the Law Revision Counsel, U.S. House of Representatives
- Do I Need a USDOT Number? · Federal Motor Carrier Safety Administration (FMCSA), U.S. DOT
- Tow Trucks, Operators and Vehicle Storage Facilities (licensing homepage) · Texas Department of Licensing and Regulation (TDLR)
- Apply for a Tow Company License: Insurance Requirements · Texas Department of Licensing and Regulation (TDLR)
- Apply for a Vehicle Storage Facility Company License: Insurance Requirements · Texas Department of Licensing and Regulation (TDLR)
- California Vehicle Code Section 2430.5 (Tow Truck Drivers; certificate review and recordkeeping) · California Legislative Information
- Florida Statutes Section 715.07 (Vehicles or vessels parked on private property; removal) · The Florida Senate, Florida Statutes
Haul Handbook publishes educational information about trucking registration and compliance requirements. This is not legal, financial, or tax advice. Rules, fees, and deadlines change; confirm with the agency before you file or pay.