Glossary
Towing and labor coverage, defined
An auto policy endorsement that reimburses the cost of moving a disabled vehicle and the mechanic's time spent at the scene, up to a set amount per incident. Parts and shop repairs are not included; the benefit is for getting the car off the road and any work done where it stopped.
In practice
It is the older, narrower form of what many carriers now sell as roadside assistance: it reimburses after the fact rather than dispatching help, and it usually pays only for labour performed at the breakdown site. Following an accident, the tow is normally handled under collision or comprehensive coverage instead. The per-incident limit is small and should be compared against local towing rates, which rise sharply for long distances, large vehicles and after-hours calls. Some carriers count each use as a claim on the record. Households with an auto club membership often do not need it. It can be worth adding to a motorcycle or RV policy where a breakdown far from home is costly.
A worked example
Suppose an endorsement pays up to $75 per incident and a driver's alternator fails on a highway. The tow costs $150 and the roadside labour to diagnose the fault costs $40; the carrier reimburses $75 and the driver pays the remaining $115. A higher tier with a $200 limit would have paid all but the parts. Hypothetical figures.
Applies to: Auto InsuranceMotorcycle Insurance