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 Sep 7, 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.