Problems Need Addressed – Tow Companies vs. Motor Clubs

When I sold my business, I wanted to stay in the industry.  So, I started to hold seminars at tow shows.  As I would talk to tow companies, the consensus was they were having issues with motor clubs with things like:

1. Low pay for tows
2. Short pays
3. No pays
4. Long time to get paid

In my business, I never ran club calls so I could not feel their pain.  I wondered why they continued to run these calls even though they had all these problems.  Tow companies were offered volumes by the clubs, and they thought that would offset the issues.  Therefore, I needed to address these issues and see if there was something that I could do.  After talking to some of the motor clubs to hear their side of the story, I learned that motor clubs were formed to protect the consumer from tow companies that were charging too much for their services.  If I needed to be the middleman, then so be it.  That way, the tow company did not have to deal with the motor club, and the motor club did not have to deal with the tow company.

That’s when I started TowTrax.  It was fair to the tow company because when a tow company gets a tow from TowTrax it provided the following:

1. A fair price for their tow
2. They would get paid within a week of their tow.
3. It was usually within 10 to 15 miles.
4. For some companies, it gave tows that they never had.

I had to make sure it helped the motor club as well.  For them, it provided the following:

1. Was not being over charged by the tow company.
2. They did not have to talk with the tow companies.
3. T.A. under 35 minutes
4. Their customer did not have to wait a long time for the truck.

I realized this also addressed the problem that the consumer was having, and the customer was provided the following:

1. They did not have to stand on the side of the road waiting for a tow truck.
2. They felt safer because they could see the tow truck coming towards them.
3. The consumer was being serviced by a professional.

TowTrax has been a very successful company, and we continue to grow while our revenues keep doubling every year as we continue to grow.  TowTrax is now giving you the opportunity to be a part of our success by becoming a partner and investing in TowTrax.  If you are interested give me a call.

Tow Companies vs. Insurance.

I addressed one issue, it’s now time to see what I can do about the next issue tow companies will be facing.  When speaking with the tow companies, lots of them felt the next problem to face will be insurance for their company.  Some of the issues they face are:

1. Insurance companies are no longer offering insurance for the towing industry.
2. The companies that stay are raising their prices.
3. They dispute claims presented by tow companies.
4. The tow companies’ insurance goes up every year.
5. Requirements are to strict.

I decided to investigate.  Therefore, I started an insurance company that would support only the tow industry.  It would be set up like USAA where they offer insurance only to the military.  After surveying lots of tow companies, 85% of them said that they would switch insurance companies and were interested in helping to start it.

My thoughts were, if we had our own industry insurance company, we could provide the following:

1. We could establish fair rates.
2. If you had minimal claims, your insurance would go down.
3. We could identify the types of claims we were getting and set up training to avoid those claims in the future.
4. We could establish other training as needed for the industry.
5. You would never worry about being canceled because of a claim, no matter the size of the claim.
6. We could pay each state association, $50,000 annually

I asked 50 random tow companies what they paid annually and what claims were filed.  They paid over 4 million and filed less than $350,000 in claims. I found that to be outrageous.  It made me realize that insurance companies were making a ton of money.  I figured if we had our own insurance company, we could put money back into the industry.  We could help each state association, the Wall of the Fallen, the Towing Hall of Fame, and provide education as needed.

I have done lots of research about selling insurance in a state.  It costs a minimum of $2 million; some states were 3 million, and Texas requires a million.  I looked at requirements of 35 states, and these were the numbers.  I cannot start an insurance company unless we have at least 10 million in the bank.  I would hire insurance experts in the industry to be a part of this and add full-time legal staff to fight the law suits we are constantly experiencing.

I would be happy to start this if I had some help from the industry.  As a part of the company, you would have ownership, with no liability to worry about at all.  Give it some thought and call me at 469-774-0340.  

The last item I’m working on is to provide a way for you to purchase things you need for your company when money is short.  TowTrax being supported by Stranded is now offering a credit card that is interest free for the first 6 months with flexible dollar amounts. It would be limited right now to certain stores, but we plan on growing its usage.

Tow companies are always facing new challenges when running their company.  We are here working to make your life better.