TLC Insurance for Taxis, Limos, and Black Cars
Gino is a professional livery driver, driving town cars around New York City. He owns his own vehicle and his customers order their rides by calling a car service. Then, Gino gets scheduled and notified by a dispatcher through his mobile phone. Other black car drivers use a radio dispatch, just like the Yellow Cab drivers around New York.
One rainy evening, Gino is involved in a serious accident as he’s driving a passenger to the airport. No one is hurt, but Gino and his car are out of commission for a few days. (Don’t worry, the passenger made it to the airport on time.) Although it will cost $20,000 to repair Gino’s car. There is some additional property damage to the tune of $40,000 to the other vehicle.
Luckily, Gino had commercial auto insurance to cover the accident and the extra physical damage, so he’s not out any more money. But he was fortunate. His next accident could result in injuries or major property damage, and he would need enough insurance to cover it.
As with any kind of public livery driver in New York City, he needs TLC insurance.
TLC refers to the New York City Taxi & Limousine Commission, which means this is insurance required by that commission. You may not legally operate a taxi, limousine, or town car (also called a For-Hire Vehicle, or FHV) in New York City unless you get licensed by the commission and have the proper insurance.
What is TLC Insurance?
Anyone interested in driving a taxi, limousine, or town car (also called a black car) for a car service or privately in New York City needs to pay attention to the insurance they get. This is not something you can do with a personal auto insurance policy, even if you owned your own car. You need a commercial auto insurance policy that allows for passenger transportation for hire, we call this TLC insurance.
Commercial auto insurance covers people who drive for business reasons, such as an insurance claims adjuster driving out to a location, a pizza driver making a delivery, or a building contractor driving to the lumber yard. And TLC insurance is designed to provide coverage for the passengers.
Even drivers for ride-sharing services like Uber and Lyft are required to use a commercial auto insurance policy that allows for passenger transportation.
In New York City, it’s the Taxi & Limousine Commission that sets the policies for livery drivers within the five boroughs. All taxi/limo/black car drivers must have TLC license plates and a TLC license (also called a hack license). Proper licensing is necessary.
Once you have that hack license, you’ll be able to get your TLC license plates. And one of the requirements for having TLC plates is to carry liability insurance at a minimum of $100,000/$300,000/$100,000 limits. ($100,000 is paid out per person for bodily injury, $300,000 is the maximum paid per accident; the other $100,000 is for property damage).
In short, TLC insurance, as defined by the New York City Taxi & Limousine Commission is:
- Commercial Auto Insurance
- With an additional clause (an endorsement) for passenger transportation
- Physical Damage coverage for your own car (optional)
Physical Damage Coverage
Also, you should note that the requirements for TLC refer only to liability (coverage for others) and does not cover damage to your own vehicle. That means if you’re in an accident, you could pay for your own damages out of your own pocket. You can buy physical damage coverage, just like you can for personal auto insurance. The physical damage coverage has two parts to it, comprehensive and collision.
Be sure to talk to your insurance representative about purchasing physical damage coverage for your own car. This is not mandatory by the commission but is necessary if your vehicle is leased or financed.
Like we mentioned earlier, the items you need are a hack license and TLC plates. Please also be aware that there are some restrictions on the kinds of driving yellow cabs and black cars are able to do. For one thing, black car drivers have to call into a dispatch either through a radio or cell phone to schedule their next ride. They can’t just ride around like a yellow cab and pick people up. They could lose their license that way.
Who Needs It?
If you drive a taxi cab, a limousine, or a black car, you need TLC insurance. And if you own a taxi cab company or livery service where other people drive your cars, you’ll need a policy that lists all your drivers. You can purchase a separate policy for each vehicle but it is more cost-effective to have 1 policy for all vehicles owned.
The Big Takeaway
Even if you own your own vehicle, you can’t just drive it with a personal auto insurance policy. You need a commercial auto insurance policy that covers the transportation of people (TLC insurance), with higher liability limits and physical damage coverage for worst-case scenarios.
Taxis, Limos, and Black Cars specifically require TLC insurance. Knowing how much coverage you should carry will depend on where you drive and the kinds of driving you do and who you drive for. To learn more, you should speak to an insurance professional. We can help you select the right kind of insurance so you and your vehicle are fully protected against every possibility.