One truck, one driver, and the right paperwork is a real starting point. Here’s the full list — and the honest warning that requirements vary by state and locality, so verify yours before you haul.
On this page: Form the business · Federal numbers · State & local licenses · Insurance · Truck & equipment · Dispatch, lot & records · Where the calls come from · What it costs to start
Starting a company? Message Ryan on Messenger before you buy the truck. I'll tell you exactly what insurance your state and your first work will require — so you don't pay for the wrong policy.
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Pick an entity — most new tow companies form an LLC — and register it with your state. Get an EIN (Employer Identification Number) from the IRS; you’ll need it for taxes, bank accounts, and federal filings. Open a dedicated business bank account and keep business money separate from personal money from day one. Get a business phone number and a professional email — dispatch and police agencies will both need to reach you around the clock.
If you tow across state lines, you’re in FMCSA territory:
Authority doesn’t go active until your insurance filing is on file with FMCSA. Don’t haul interstate loads until your status shows active.
This is where it gets local. Many states and cities license tow companies and tow operators separately from the federal numbers above. The exact names, fees, and requirements vary — there is no single national tow license.
One example: Texas regulates towing through the Department of Licensing and Regulation (TDLR), with separate tow company and tow operator licensing. Your state may use its DOT, its public utilities commission, or a separate licensing board. Your city or county may add its own tow business license or permit on top.
Look up your state’s requirements: tow truck insurance by state → Then call your city or county clerk and ask what local tow permits apply. That phone call saves more headaches than any website.
Insurance is usually one of the biggest first-year costs, and you need it in place before your authority goes active and before any agency or motor club will talk to you. At minimum, your state’s required coverages — and in practice, more:
Your insurance company files proof of insurance with FMCSA for interstate authority, and your state may require its own filing. Check the numbers: state requirements lookup → Figure out the stack: coverage quiz → See what it costs: tow truck insurance cost guide →
Most new companies start with one truck — usually a rollback (flatbed), because it handles the widest range of everyday tows. A wrecker (wheel-lift) is the other common starter. Heavy-duty and rotator work comes later, with bigger trucks and bigger insurance bills.
A truck with no calls is an expensive lawn ornament. The main revenue channels:
Honest note: rotation and motor clubs have their own requirements and don’t accept everyone immediately. Some rotation lists require time in business. Build the paperwork first, then apply — and have a plan for private and commercial work in the meantime.
There’s no single honest number. The big items are the truck, the first year of insurance, licenses and filings, and the lot. Insurance is usually one of the largest first-year costs — see the cost guide for what published ranges actually say. New ventures typically pay more for insurance until they build a track record. Budget for the down payment on the policy plus the first months of installments, not just the monthly figure.
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More tools: state requirements lookup · workers’ comp lookup · coverage quiz · fuel cost calculator · rotation checklist
If you cross state lines, yes — you need a USDOT number from FMCSA. Many states also require a USDOT number for intrastate-only towing. Check your state's rules before you haul.
You need MC operating authority if you haul for hire across state lines. Intrastate-only towing generally does not require MC authority, but state and local tow licenses still apply.
It depends on the truck's weight. Under the federal CDL rule, a commercial driver's license is generally required for a single vehicle with a GVWR of 26,001 pounds or more, or a combination rated over 26,000 pounds with a towed unit over 10,000 pounds. Lighter rollback and wrecker work often does not require a CDL — but your state may add its own rules.
Yes. Most tow companies start with one truck — usually a rollback — and add trucks as the call volume justifies it. One truck, one driver, and the right paperwork is a real starting point.
It depends on your state and whether you cross state lines. At minimum you generally need a business license and, in many states and cities, a tow company license. Interstate work needs a USDOT number and MC operating authority from FMCSA. Check your state's tow licensing rules before you haul — Texas, for example, licenses tow companies through TDLR.
Informational only — not legal advice and not a quote. Requirements vary by state and locality — confirm the exact licenses, filings, and limits with your state DOT / licensing board and your local city or county before you haul. Federal CDL and drug-and-alcohol rules referenced here are 49 CFR Part 383 and 49 CFR Part 382.