Towing & Labor is an additional coverage that you can add to your policy. Towing & Labor pays for part or all of the expenses you incur to tow your vehicle to a body shop or mechanic after an accident. The average amount you receive for Towing & Labor ranges from $25 all the way up to $150 and more per incident.
The Towing & Labor coverage was initially designed to only be used after an at-fault accident. However, most insurance companies will pay your towing and labor expenses even if your car has a mechanical breakdown while away from home! The reason for this is that most insurance companies would rather pay $50 or so to tow your vehicle to a nearby repair shop than have your vehicle sit by the side of the road where it is more susceptible to both Collision, Comprehensive damages, and theft.
Many insurance companies have started upgrading their Towing & Labor coverage into "Roadside Assistance" packages that will not only cover for towing, but also for services such as locking your keys in the car or running out of gas. This is a fairly new development, but as time goes on, you will probably see less Towing & Labor and more Roadside Assistance packages being offered to drivers.