TDLR Tow Truck Requirements: Permits, Insurance, and Fee Caps

To operate a tow truck legally in Texas, you need three separate credentials from the Texas Department of Licensing and Regulation: a towing company license for the business, an individual tow operator license for each driver, and a tow truck permit for each vehicle in the fleet. TDLR tow truck requirements sit under Texas Occupations Code Chapter 2308, and they also cover insurance minimums, criminal background review, truck markings, and continuing education.¹ Missing any piece can bring administrative fines, suspension, or criminal charges.

The Three Credentials You Need

The company license covers the business entity. The operator license covers each person who physically drives a tow truck. The tow truck permit covers the individual vehicle and is tied to the type of towing that truck is authorized to perform. A truck cannot go on the road until all three are in place and insurance is on file with TDLR.

Choose the Right Truck Permit Type

Texas issues three permit classes, and each truck must carry the correct one for the work it does. A higher-tier permit covers lower-tier work, but never the other way around.

Incident Management (IM) is required for any non-consent tow ordered by a peace officer, such as clearing a crash scene or a vehicle blocking traffic. IM is the broadest permit and also authorizes private property and consent towing.²
Private Property (PP) is required when a parking facility owner authorizes removal of an unauthorized vehicle. A PP permit also covers consent towing but cannot be used for incident management work.³
Consent Tow (CT) covers tows the vehicle owner has authorized, like a roadside call or a run to a mechanic. It cannot be used for any non-consent towing.⁴

Using a truck for a tow type it isn’t permitted for is a Class B violation, with fines of $500 to $1,500 and possible suspension.⁵

Towing Company License

The company license application runs through TDLR’s TOOLS online system and costs $350, non-refundable.⁶ Every controlling person in the company — owners, partners, officers, and general managers — must pass a criminal background check. Any felony or misdemeanor conviction other than minor traffic violations, and any guilty or no-contest plea including deferred adjudication, has to be disclosed on a Criminal History Questionnaire. TDLR reviews criminal history case by case, so a conviction is not an automatic bar.

Before TDLR will issue the license, the company must also adopt a drug and alcohol testing policy. You can use TDLR’s model policy, join an approved drug testing consortium, or write your own policy that meets or exceeds the model.⁶ The license is valid for one year.

Individual Tow Operator License

Each driver needs their own license. The application fee is $100, and applicants must hold a valid driver’s license from any U.S. state.⁷ The same case-by-case criminal background review that applies to company applicants applies here.

Drivers who will perform incident management or private property tows must complete a TDLR-approved certification program before the license is issued. Recognized programs include those offered by the Towing and Recovery Association of America, WreckMaster, and the Texas Towing and Storage Association, among others. Consent-only operators do not need this certification. For incident management operators, the certification requirement is written directly into the statute.⁸

Truck Permit Application and Insurance Filing

Once the company license is in place, each truck needs its own permit at $75 per vehicle, also non-refundable.⁹ For each truck you supply the make, year, VIN, unit number, whether it handles light-duty or heavy-duty vehicles, and the permit type. Adding trucks later uses Form TOW005 at the same $75 per truck; changing a permit type costs $25; deleting a truck is free.¹⁰

Insurance must be on file before TDLR will issue the truck permit. Your insurer, not you, submits the electronic T-68 Certificate of Insurance directly through the TOOLS system. If the T-68 isn’t active, the application will stall no matter what paper policy you hold.¹¹

Insurance Minimums by Permit Type

Coverage must come from an insurer licensed in Texas, and every policy has to require the insurer to notify TDLR 30 days before cancellation.⁶

Incident Management: $500,000 liability per truck per incident, plus $50,000 cargo or on-hook coverage per truck per incident.¹²
Private Property: $300,000 liability per truck per incident, plus $50,000 cargo or on-hook coverage per truck per incident.
Consent Towing: $300,000 liability per truck per incident. No cargo or on-hook coverage required.

Coverage must remain continuous. TDLR can revoke a license if a policy lapses without a replacement filed before the cancellation date, and the electronic monitoring system flags gaps automatically.

Required Truck Markings

Every permitted truck must display, on both sides, the permit holder’s name, a publicly listed telephone number, the city and state of the business, and the TDLR permit number for that truck. Letters and numbers must be at least two inches tall, in a color that contrasts with the background, and permanently affixed in a conspicuous location.¹³ Magnetic signs or removable decals do not satisfy the rule.

Fee Caps on Private Property Tows

Texas caps what you can charge for a private property non-consent tow. The current maximums are $272 for light-duty, $380 for medium-duty, and $489 per unit for heavy-duty, up to $978.¹⁴ These caps apply only to private property non-consent tows. Incident management tow fees are usually set by local government contracts or law enforcement rotation agreements rather than a statewide cap, and consent tow rates are negotiated with the customer.

Renewal and Continuing Education

Tow company licenses renew every year. Individual operator licenses run for two years, and before each renewal the operator must complete four hours of continuing education: at least one hour on roadway safety, at least one hour on Texas towing laws, and two hours on approved topics like driver safety, towing techniques, equipment operation, or customer service.¹⁵ Incident management operators renewing for the first time must also complete an eight-hour professional development course on top of the four standard hours. You cannot repeat a course for credit, and all hours must be finished before the license expires.

Truck permits will not renew unless the electronic T-68 is active in the TOOLS system when renewal is processed.¹¹

Penalties for Violations

TDLR sorts towing violations into four classes.

Class A ($200–$800): minor administrative or paperwork violations.
Class B ($500–$1,500): using a truck without the appropriate permit or operating with an expired permit. May include a probated or full suspension of up to six months.⁵
Class C ($1,000–$4,000): operating as a company or operator with no license at all. Suspension periods can reach one year.
Class D ($2,000–$5,000): the most serious violations, with penalties from a one-year full suspension up to permanent revocation.

A violation of the towing chapter is also a criminal offense. A standard violation is a misdemeanor punishable by a fine of $500 to $1,500. If the state proves the violation was knowing or intentional, it becomes a Class B misdemeanor with steeper consequences.¹⁶

1
State of Texas. Texas Occupations Code 2308 – Vehicle Towing and Booting
2
Legal Information Institute. 16 Texas Admin Code 86.201 – Tow Truck Permit – Incident Management Towing
3
Legal Information Institute. 16 Texas Admin Code 86.202 – Tow Truck Permit – Private Property Towing
4
Legal Information Institute. 16 Texas Admin Code 86.203 – Tow Truck Permit – Consent Towing
5
Texas Department of Licensing and Regulation. Vehicle Towing Penalties and Sanctions
6
Texas Department of Licensing and Regulation. Apply for a New Texas Tow Company License
7
Texas Department of Licensing and Regulation. Apply for a New Texas Tow Operator License
8
State of Texas. Texas Occupations Code 2308.153 – Incident Management Towing Operators License
9
Texas Department of Licensing and Regulation. Apply for a New Tow Truck Permit in Texas
10
Texas Department of Licensing and Regulation. TOW005 Tow Truck Add Delete and Change Form
11
Texas Department of Licensing and Regulation. Renew a Tow Truck Permit
12
Legal Information Institute. 16 Texas Admin Code 86.400 – Insurance Requirements – Tow Truck Permits
13
Legal Information Institute. 16 Texas Admin Code 86.701 – Tow Truck Signage
14
Legal Information Institute. 16 Texas Admin Code 86.455 – Private Property Tow Fees
15
Texas Department of Licensing and Regulation. Towing Operator Continuing Education
16
Texas.Public.Law. Texas Occupations Code 2308.405 – Criminal Penalty