Limo Insurance: Coverage, Cost, and How to Get It
Limousine insurance can cost between $5,000 and $10,000 per year, depending on the limo you insure and the coverages you select.
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Written byKat Tretina
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Kat Tretina
Kat Tretina is a personal finance writer specializing in debt repayment and insurance.
Previously, she worked in public relations within the pharmaceutical industry before switching to non-profit work. After struggling to repay her own student loan debt and seeing firsthand how complex the financial aid and repayment system is, she began writing to share what she learned so other people could better manage their loans.
For the past seven years, she’s been freelancing for major financial publications, focusing her work on helping people understand their financial options. Kat double-majored in English and Communications at Elizabethtown College, and she went on to earn her master’s at West Chester University. She has also earned certifications in student loan counseling and financial education.
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Edited byBecky Helzer
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Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
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Table of contents
From bachelorette parties to corporate clients, limo rentals are big business. With limo rentals ranging from $80 to $400 per hour, the industry is growing. As of 2024, nearly 179,000 limousine and town car services operated in the U.S., according to IBISWorld data.[1]
Whether you’re entering the industry with your first limo or already have a fleet of vehicles, limo insurance is a necessity. A specialized form of livery insurance, limo insurance protects your business, drivers, and passengers from costly accidents.
Here’s what you should know about coverage requirements, exclusions, costs, and how to buy limo insurance.
Quick Facts
Limo insurance is a type of for-hire insurance for pre-arranged transportation with luxury vehicles.
Limousine insurance costs between $450 and $833 per vehicle, per month.
Limousine companies traveling across state lines need insurance policies that meet Federal Motor Carrier Safety Administration (FMCSA) requirements.[2]
What is limo insurance?
Limousines typically need to be licensed by the state and the local transportation authority. Under state laws, limos must be inspected, be registered, and meet state or federal insurance requirements.[3]
Limo insurance is a specialized type of commercial auto insurance. This coverage isn’t limited to limousines or stretch limos. It also applies to black car services — luxury sedans or SUVs offering a more discreet and comfortable travel experience.
The following features set limo insurance apart from other forms of coverage:
Limousines and black car vehicles are more expensive than other vehicles.
Limousines typically have higher passenger capacities.
Rides are pre-arranged, with specific pickup and drop-off locations.
Unlike other forms of commercial auto insurance, limo insurance provides additional protection specific to the risks of transporting passengers in high-end vehicles. A limo insurance policy provides property damage liability coverage and protects against third-party lawsuits.
You can also purchase coverage for the vehicle to protect your investment.
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What limo insurance covers
Because the limousine business is built around transporting passengers on a pre-arranged schedule, limo insurance policies cover your passengers, too. Insurance requirements vary by state, and if your vehicles travel across state lines, your policy must also meet FMCSA requirements.
A comprehensive limo insurance policy includes:
Liability coverage (minimums vary by state)
Collision and comprehensive coverage
Personal injury protection for drivers and passengers
Add-ons, such as workers’ comp, liquor liability, alleged assault and battery liability, communicable disease liability, and umbrella coverage
Coverage requirements for limos can vary based on their size and usage. For example, stretch limos and party buses often require higher liability limits because they carry more passengers and are larger, making them harder to drive and park.
In contrast, smaller, luxury limos with glass partitions tend to be costly to repair and replace, so comprehensive and collision coverage are especially important. Deductibles for physical damage coverage range from $500 to $5,000, with some companies offering deductibles as high as $25,000.
Depending on the limo’s purpose, you can choose from various add-on coverages, such as liquor liability, to offer your drivers and passengers greater protection.
As with a personal auto insurance policy, liability insurance is an essential component of limo insurance. It pays for bodily injuries and property damage you or your drivers cause to others while operating your limousines. Liability insurance also pays legal defense fees if someone sues your business.
Liability requirements are typically set at the state level.
The coverage requirements for limos seating 12 or fewer passengers in several states are shown in the table below:
State
Bodily Injury for One PersonBodily Injury for Two or More PeopleProperty DamageFlorida $125,000 $250,000 $50,000 Georgia $100,000 $300,000 $50,000 Louisiana $250,000 $500,000 $10,000 Maryland $75,000 $200,000 $50,000 Missouri $100,000 $300,000 $50,000 Some states have combined single limit (CSL) requirements. This single maximum can be applied to a combination of bodily injury and property damage that occurs in an accident.
For example, Maine requires that limousines that can carry four to seven passengers have liability coverage of at least $300,000 in a CSL.
If your limousine company completes trips across state lines, you’ll need a policy that meets FMCSA requirements. This would apply if you pick up passengers in Pennsylvania and drive them to Delaware, for example.
For vehicles holding 15 or fewer passengers, you’ll need a policy with $1.5 million in bodily injury and property damage liability.[4]
Although state laws don’t require collision and comprehensive insurance, these coverages can be critical for businesses. Limos are expensive investments. A new limousine can cost between $90,000 and $250,000, and the price tag for specialty vehicles can be even higher. Because repairs can be expensive, having the right insurance is essential.
Collision insurance pays to repair or replace your limo if it’s damaged in an accident. Comprehensive insurance covers non-collision events, like theft, vandalism, and weather-related damage.
Passenger and driver safety is critical for your business. Since your company may transport multiple people, it’s crucial to have a policy with medical payments or personal injury protection. This coverage pays the medical expenses for your driver and passengers if they’re injured in an accident, no matter who was at fault.
Some policies also include coverage for legal expenses for passenger claims. For instance, if your driver causes an accident that results in a passenger’s spinal injury and the passenger sues, this coverage could pay for medical expenses, legal fees, and any settlements.
In some states, PIP or medical payments coverage is a requirement. For example, New York requires limousine owners to maintain PIP coverage of at least $100,000 per person.
Even if your state doesn’t require it, PIP or medical payments coverage is critical for limousine owners transporting passengers. Without adequate coverage, a single accident could bankrupt your business.
As a business owner, you may need these other forms of coverage, too:
Umbrella coverage: Umbrella insurance provides additional liability coverage if you’re in an accident and the damages exceed your policy limits.
Liquor liability: With some limo rentals, passengers may consume alcohol. Even if they drink only outside of the vehicle, you’re at risk of being held liable if a passenger has an alcohol-related issue. Liquor liability insurance provides added protection for your business.
What limo insurance doesn’t cover
A basic limo insurance policy doesn’t cover the following:
Routine maintenance and repairs for wear and tear
Damage caused by unapproved drivers or vehicles not listed on your policy
Non-commercial limo use
Illegal vehicle use
Physical damage to your vehicle
For example, say you run a limousine rental company that primarily handles weddings. On the way to pick up the bride, the limo gets a flat tire, preventing the driver from picking up the bride on time and significantly delaying the wedding.
As a result, the customer sues your company. This wouldn’t be covered under a limo insurance policy but by a commercial errors and omissions or professional liability policy.
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Factors that affect limo insurance rates
Limo insurance can be expensive. Limos are high-value vehicles that carry multiple passengers and spend significant time on the road. For these reasons, limo insurance policies range from $5,000 to $10,000 per vehicle, per year.
Several factors affect your rates, including:[5]
Business type
The type of business you run contributes to your premiums. For example, if your company specializes in party limo rentals in a busy city, you’ll pay higher rates than a business offering limo rentals for suburban funerals.
Vehicle size, type, and value
Specialty or custom vehicles are often more expensive to insure than basic stretch limousines or sedan limos.
Driving records and claims history
If your drivers have a history of tickets, accidents, or claims, you’ll pay higher premiums.
Driver age, experience, and training
Employing younger drivers or people with past driving infractions can lead to higher insurance rates.
State and local regulatory issues
Businesses operating in states with higher insurance requirements or a higher percentage of uninsured drivers will need to budget for higher insurance costs.
Location
Areas with a higher cost of living have higher insurance premiums. The same goes for areas with higher crime rates or more traffic, where theft or accidents are more likely.
Deductible and coverage options
The deductible you choose also affects your rates. A higher deductible means lower premiums, but you’ll pay a higher amount out of pocket if you need to file a claim. Coverage limits and add-ons also affect your premiums.
How to get limo insurance
Follow these steps to purchase limo insurance:
Get professional help. Not all insurance companies sell limo insurance. Check with industry associations like the National Limousine Association for insurer recommendations. You can also work with a specialist or broker experienced in the for-hire industry to find the best commercial auto insurer for your business.
Assess your insurance requirements. Determine what kinds of coverage you need based on federal and state laws, the size of your fleet, the age and value of your vehicles, and your business model.
Gather information. Collect details on each of your vehicles, and get each driver’s information, including tickets, accidents, and claims history. Be prepared to provide vehicle usage information, such as how many miles your vehicles usually cover per month or year.
Request quotes. Whether you’re working with a specialist or shopping on your own, request insurance quotes from several companies. Consider your needs and request optional add-ons to customize your policy and get extra protection.
Compare your options. Besides price, research each company’s reputation for claims processing, customer support, and communication. Check sites like Trustpilot and the Better Business Bureau.
Submit your documentation and payments. Provide proof of licensing, business registration, vehicle inspection, and driver records. Then, pay your first premium to activate your coverage.
Review your policy. Set up a calendar reminder to review your policy at least once each year. You may need to adjust your coverage as your business changes and expands.
Limo insurance FAQs
Whether you have a fleet of limos or are considering buying your first limousine to start a business, the answers to the following questions can help you select the right limo insurance.
Does the law require limo insurance?
Yes. The FMCSA regulates limousine operators and sets minimum coverage limits. Operating without the appropriate coverage can lead to fines, license or business registration revocation, and other penalties.
Does limo insurance cover passengers?
Yes. Limo insurance policies typically include personal injury protection or medical payments coverage.
How can you lower limo insurance costs?
To help reduce your limo insurance premiums, require all drivers to complete safe driving courses. You can also adjust your deductibles and bundle your coverage with other forms of business insurance.
Is limo insurance the same as livery insurance?
Limo insurance is a form of specialized livery insurance that covers luxury or stretch vehicles used by chauffeur services.
Sources
- IBISWorld. "Limousine & Town Car Services in the US - Number of Businesses."
- Federal Motor Carrier Safety Administration. "Clarification of Existing Regulations for Passenger Carriers in Interstate Commerce."
- National Association of Insurance Commissioners. "Commercial Ride-Sharing."
- Federal Motor Carrier Safety Administration. "Insurance Filing Requirements."
- Insurance Information Institute. "Insuring Your Business: Small Business Owners' Guide to Insurance: Business Vehicle Insurance."
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Kat Tretina
Kat Tretina is a personal finance writer specializing in debt repayment and insurance.
Previously, she worked in public relations within the pharmaceutical industry before switching to non-profit work. After struggling to repay her own student loan debt and seeing firsthand how complex the financial aid and repayment system is, she began writing to share what she learned so other people could better manage their loans.
For the past seven years, she’s been freelancing for major financial publications, focusing her work on helping people understand their financial options. Kat double-majored in English and Communications at Elizabethtown College, and she went on to earn her master’s at West Chester University. She has also earned certifications in student loan counseling and financial education.
Becky Helzer is an editor at Insurify. She loves helping writers express their ideas clearly and authentically. With a diverse background in editing everything from curriculum and books to magazine articles and blog posts, she’s worked on topics ranging from home finance, insurance, and cloud computing to the best tools for home improvement.
A proud graduate of Colorado State University with a degree in technical journalism, Becky lives in Fort Collins, CO, with her husband and their two spoiled rescue dogs.
