Question: If I have vehicles which require $1.5 million of liability coverage as they are less than 15 passengers, and I have a few other vehicles which are 15+ passengers and require $5 million of liability, why won’t the insurance companies allow us to have $1.5 million on all of them and then $5 million on the few that need that limit?
Answer: This is a question which is best answered by the regulatory bodies, whether state or federal, which govern transportation and insurance. Most states require a form ‘E’ filing which states that all owned, leased, hired or borrowed vehicles must be covered on the insurance policy based on specific limits for specific passenger amounts. Federal is an MCS 90.
So if Professional Livery, LLC (a fictitious company) has four <15 passenger vehicles and a 22-passenger vehicle, the regulatory requirements are that all owned vehicles have $5 million of coverage if they are all owned by the same entity with the same FEIN (Federal tax ID Number) and regulatory license.
If Professional Livery, LLC has four <15 passenger and its sister company, Professional Livery, Inc., has a separate FEIN and regulatory license with a 22-passenger vehicle, then the filing for Professional Livery, LLC can be $1.5 million and Professional Livery, Inc. can be $5 million as these are not commonly held equipment and there are separate FEIN and regulatory licenses.
It is always best to consult the regulatory entity governing your license and your counsel. It is not wise to just write another policy for commonly owned vehicles as the claimant can sue both policies and get limit claims on each, at your expense.
About Lee Martinez
Lee Martinez is the President of Transpo Insurance and has more than 20 years of experience in the chauffeured transportation industry as a broker, managing general agent, and an operator. He is one of only three LimoPro Council members for the Willis Programs, a board member of the Greater California Limousine Association, and he has offices in Denver; Long Beach, Calif.; and Las Vegas. His companies offer insurance products in 22 states and he insures more than 5,500 livery vehicles in those states. Martinez also developed an internet Safety Training Program which is available at www.stop-program.com and he is a managing partner of ProTrans West, a managing general agency, which offers livery insurance products to retail brokers in the 22 western states. He can be reached at (702) 364-4727 or email@example.com.