Limo insurance: livery coverage, permitted city by city

Livery is the trade's own word for carrying people for money in a vehicle you provide with a driver, arranged in advance rather than hailed. It is older than any of the vehicles on this page and it survives because regulators and insurers both needed a term that describes the use rather than the bodywork. Houston files its limousine rules in a chapter titled Vehicles for Hire. The Texas statute that lets a city write those rules describes a vehicle that "provides passenger limousine transportation services for compensation". The federal passenger subpart opens on "for-hire motor carriers transporting passengers". Three levels of government, three different documents, and all three are drawing the same line: was somebody paid to move a passenger.

That is also the line a personal auto policy is drawn on the other side of. Livery use is excluded from personal auto coverage as a matter of course, which is why there is no version of this business that runs quietly on the car's own policy, and why the first ride you take for a fee changes what your insurance has to be. It is not a paperwork preference. A claim on a livery trip under a personal policy is the claim that gets investigated and denied, and the operator finds out at the worst possible moment.

On a commercial policy the word does real work too. Livery is an underwriting class, and it prices differently from an ordinary business auto risk because the exposure is different: paying passengers in the vehicle, professional drivers behind the wheel, night hours, and a permit that names a limit somebody else chose. When an agent says they can write livery, that is a statement about which markets they have access to, not a statement about the price. Ask which carrier and whether that carrier writes the vehicle types you actually run.

Mostly not, and the reason is worth knowing. The law counts seats, not styling. Texas registers a passenger vehicle with the state only above 15 passengers including the driver, and the city ordinance that fills the gap below that number reaches "each private passenger vehicle, regardless of how it is propelled". A black sedan, a stretched sedan, and a luxury SUV are all on the same side of both tests, so the permit you need and the limit written into it do not change when you trade one for another.

Where the vehicle type does change things is inside the ordinance's own definitions and on the rating side. Houston's Chapter 46 sorts chauffeured limousines into five categories, and each carries its own conditions on age, wheelbase, seating or price: the sedan-type luxury vehicle, the extended-body vehicle, the luxury SUV, the designated passenger van above a base price, and the antique or classic. An operator who buys a vehicle that falls outside every category has bought a car they cannot permit. Underwriting cares for a different reason: a stretched or coach-built vehicle is a specialty repair with a long parts wait, so physical damage on a stretch is a different conversation from physical damage on a sedan even though the liability requirement is identical.

The practical version: pick the vehicle for the work, then check it against the ordinance's categories and against what your carrier will insure, in that order, before the deposit.

Black car is a segment name rather than a legal category. In US usage it means pre-arranged sedan and SUV service with a professional driver, billed to an account or booked ahead, sitting between a taxi and a stretch limousine. The car is unmarked, the trip is arranged in advance, and nobody flags it down. Rideshare platforms have since borrowed the phrase for their premium tiers, which is why the term now points at two different readers: a company running its own permitted vehicles, and a driver looking for an endorsement on a personal policy.

If you are the first of those, nothing on this page changes for you. Black car work is livery work, the permit question above is your question, and the coverage set below is your set. If you are the second, an app driver in your own car, your answer starts with the platform's own policy and your personal insurer's rules about carrying passengers for money, and this site is not written for that.

Houston is one city, and its rules are cited here as an example of the shape, not as a national requirement. Chapter 46 of the city code, Vehicles for Hire, defines a "chauffeured limousine" in five categories: a sedan-type luxury vehicle seating five or six including the driver; an extended-body vehicle of no more than 15 persons with the wheelbase stretched by 40 inches or more; a luxury SUV of five to nine persons; a designated passenger van of eight to 15 persons above a base price; or an antique, classic, or special-interest vehicle (Houston Code of Ordinances, Chapter 46, Section 46-191). Section 46-231 makes it unlawful to operate or offer chauffeured limousine service in the city without a current permit issued under that division.

The insurance condition is Section 46-238. No permit becomes effective until the permittee has filed "the requisite proof of insurance"; the coverage must be "commercial automobile liability coverage with limits of not less than $500,000.00 combined single limit per accident" from a Texas-authorized carrier or an eligible surplus lines insurer with a Best's rating of at least B+; the policy "shall name the city as an additional insured" and must carry endorsements for 30 days' written notice of cancellation and ten days' notice of non-payment to the director; and if a policy lapses without a replacement on file, "the permit shall automatically be suspended", terminating if no replacement arrives by the tenth business day. The city's permitting portal adds a vehicle inspection and an annual permit term running January through December (Houston Permitting Center, Limousine Permit). Those four features, a floor, an additional insured, a notice endorsement, and an automatic suspension on lapse, are what to expect from any city that permits livery.

The federal passenger schedule applies to "for-hire motor carriers transporting passengers in interstate or foreign commerce" (49 CFR 387.27), and for a vehicle seating 15 or fewer including the driver the required limit is $1,500,000, rising to $5,000,000 at 16 or more (49 CFR 387.33, as of 2026). A livery company whose cars cross a state line for hire, an airport run from one state into the next being the everyday case, is inside that subpart, needs interstate operating authority from the FMCSA, and files the federal certificate endorsement on its policy. A stretched party bus seating 16 or more that crosses a state line is on the $5,000,000 row. A company that works one metro area inside one state is outside the subpart and answers to its city.

One more federal definition matters even for intrastate work: a vehicle "designed or used to transport more than 8 passengers (including the driver) for compensation" is a commercial motor vehicle under 49 CFR 390.5. A nine-seat luxury van or a small party bus meets it, which brings driver qualification and vehicle rules with it once the operation is interstate, and which many states borrow for their own safety regulations.

A party bus is the vehicle that walks a livery company over every line on this page, one at a time, usually without anyone noticing which one was crossed.

Count the seats, including the driver, and read the count against three separate rules. At more than eight, the vehicle meets the federal definition of a commercial motor vehicle when it carries passengers for compensation, which brings driver qualification and vehicle safety rules with it once the operation is interstate and which many states borrow for their own regulations. At more than 15, Texas stops leaving the vehicle to the city and registers it with the state, and the city's limousine authority, which is written for vehicles "designed for carrying no more than 15 passengers", runs out. At 16 or more, the federal passenger schedule moves from $1,500,000 to $5,000,000 for a carrier working in interstate or foreign commerce. Three thresholds, three different consequences, and a single conversion decision at the coachbuilder can cross all of them.

The operational trap is that the seat count on the title and the seat count in the vehicle can drift apart. A converted bus that gains a bench, or a vehicle marketed by the number of people it fits rather than the number it is designed for, creates a gap between what the policy was rated on and what is in the vehicle on a Saturday night. Underwriters read the manufacturer's designed capacity. So does a plaintiff's lawyer. Give the agent the designed seating from the title and the conversion paperwork, not the marketing number.

The rest of the exposure is the obvious one, and it is why this vehicle is priced apart from a sedan: alcohol on board, passengers standing or moving while the vehicle is in motion, late hours, and a large unit with a high center of gravity driven in city traffic. Ask specifically how the policy responds to a passenger injured inside the vehicle rather than in a collision, and whether anything on your program answers a liquor claim, because the auto policy is not written for one. Vehicles that are past the 15-seat line for good are covered on the bus insurance page.

Commercial auto liability at the permit's limit, on every permitted vehicle, with the city named as the ordinance requires. Personal auto policies exclude livery use, which Houston's own FAQ describes plainly, so there is no version of this business that runs on a personal policy.

Physical damage on the units. A stretched or coach-built vehicle is expensive to repair and slow to replace, and the lender will require the coverage regardless of what the ordinance says.

General liability for the office, the garage, and a client hurt on the curb rather than in the car. Workers compensation for employed chauffeurs and dispatchers, in nearly every state.

Hired and non-owned auto is where livery differs from a bus company, because many limousine services run on affiliates: drivers who own the sedan and work under the company's permit, and farm-outs to other permitted operators when the calendar overflows. On the standard business auto form, a "hired automobile" is one the named insured leases, hires, rents, or borrows, and a "nonowned automobile" is one "used in connection with the named insured's business but that is not owned, leased, hired, rented, or borrowed by the named insured", which the form ties to vehicles owned by employees (IRMI, hired automobile; IRMI, nonowned automobile). An owner-operator affiliate is not an employee and the company does not rent the car, so the structure does not land cleanly in either definition. It has to be disclosed and placed on purpose. The same disclosure problem shows up in courier work, where we cover it at length on the courier insurance page.

This site publishes no premium figures, and there is a reason beyond caution. Livery is a class where the required limit is set by somebody else's document, so two operators with identical vehicles in two cities are not buying the same product. A range quoted without naming the city, the seat counts, and the driver structure is not information. What follows is the list of things that decide the number, so you can tell whether the person quoting you has asked about them.

The limit, and who set it. The single largest input, and the one an operator has least control over. A city ordinance that names a combined single limit, an airport concession agreement, a corporate account's insurance schedule, or the federal passenger schedule if any trip crosses a state line. Find out which document governs before you shop, because moving between the $1,500,000 and $5,000,000 federal rows is a seat-count decision, not a coverage preference.

The vehicles. How many, what type, how old, and what each is worth. Sedans, stretches, luxury SUVs and party vehicles are rated apart from each other, and physical damage on a coach-built unit reflects what it costs to repair rather than what it cost to buy.

The drivers. Ages, motor vehicle records, and how long they have driven for you. Then the structural question: employees, or affiliates who own their cars. That decides whether the exposure is on your owned-auto schedule or in hired and non-owned territory, and an operation that has not answered it cannot be priced accurately by anyone.

The work. Radius, and any interstate mile. Hours, and the share of late-night trips against corporate and airport runs. Weddings and nightlife against weekday accounts. Whether alcohol travels in the vehicle. Number of trips, not just number of cars.

The record. Claims history, and whether the operation has kept its permits current, since a lapse under an ordinance like Houston's suspends the permit automatically and that shows up in the file. Rates vary by carrier and by every input above. If a quote arrives without anyone asking which cities you are permitted in, it is a quote on a vehicle rather than on your operation. The fleet insurance page covers what changes once there is more than one of them.

Which cities you are permitted in and a copy of each ordinance's insurance section. Whether any trip crosses a state line, including airport transfers. The vehicle list by type, seating, age, and value. Whether chauffeurs are employees or affiliates, and who holds title to each car. The share of corporate, airport, wedding, and nightlife work, and the hours. Driver records and ages. An agent who asks which cities before asking how many cars understands where the requirement comes from.

This site publishes no premium figures. Rates vary by carrier, city, vehicle type, radius, driver structure, and loss history. For passenger vehicles that do cross the seating thresholds, see bus insurance; for the Texas registration that applies once a vehicle exceeds 15 seats, see Texas bus insurance; or start at the operation types we cover.