Louisiana towing companies say rising insurance costs and lawsuit abuse are pushing many small businesses to the edge. Industry leaders warn the problem is shrinking the number of tow operators across the state and increasing costs for drivers.
During “Mornings with Brian Haldane” , Jared Varnado of Varnado and Sons Towing said his family-owned company now pays more than $400,000 a year in insurance for 14 trucks despite maintaining a clean record.
Varnado, who also serves as president of the Towing and Recovery Professionals of Louisiana, said tow truck companies face many of the same struggles as the trucking industry because tow trucks require million-dollar insurance policies. He said even minor accidents can lead to major premium increases.
He also explained how Louisiana regulations limit what towing companies can charge for non-consensual tows. The Louisiana Public Service Commission sets those rates, leaving operators unable to offset rising costs. At the same time, many companies only collect payment on about 35% of non-consensual tows because abandoned vehicles often go unpaid.
Varnado said those losses force companies to increase prices for regular towing services just to stay afloat. He added that Louisiana has seen a noticeable drop in towing companies during the past two years. According to his estimates, the state had about 430 towing companies two years ago. That number has dropped closer to 380 this year, with many closures tied to insurance costs.
The industry continues pushing for tort reform measures at the Louisiana Capitol. Varnado said towing companies support bills focused on lawsuit reform and medical transparency. He argued that inflated medical billing tied to lawsuits increases projected insurance losses, which leads to higher premiums statewide.