To completely answer this question, we must first understand a little about an "On Hook" commercial policy. An "On Hook" towing policy is a type of insurance policy that must be carried by companies who perform towing as part of their businesses. The "on hook" policy covers any damages that could occur while a customer's vehicle is in tow. With a $1000 deductible, the insurance company would be responsible for all repairs over the $1000 cost.
The insurance company will not begin its claim process, which includes paying out the claim, until the policyholder pays the $1000. The $1000 responsibility of the policyholder should be paid directly to the insurance company. Once they receive this payment, they can expedite the claim and make the victim of the damage whole as soon as possible. This is the case in Arkansas as well as most locations around the United States, because it is the general rule for all "On Hook" commercial policies.