Paying passengers need a commercial auto policy.
Liability, physical damage and workers’ comp for taxi companies, black car and executive sedan services, and owner-operators who carry passengers for hire.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched
A personal policy stops at the fare
Most personal auto policies exclude a car while it’s used as a public or livery conveyance, which is insurance language for carrying people for hire. The California Department of Insurance points to that exclusion in its notice to rideshare drivers; the only carve-out in the typical wording is a share-the-expense car pool. A taxi, a black car or a livery sedan is insured on a commercial auto policy written for passenger transportation, not on the policy you’d buy for the family car.
Who regulates you depends on the service. In California, taxicab service is regulated by cities and counties, while prearranged charter service is regulated by the California Public Utilities Commission, which issues TCP permits and sets liability minimums by how many passengers a vehicle seats. Other states and cities have their own rules, and interstate for-hire passenger carriers have federal minimums too. I start with the permit you hold or need, then quote the policy and filings that go with it.
- Auto liabilityAt the minimum your permit requires, which in California rises with seating capacity.
- Physical damageCollision and comprehensive on the sedans, SUVs and vans themselves.
- Workers’ compFor employee drivers and staff, filed with the CPUC when a TCP carrier has employees.
- FilingsProof of coverage the insurance company files with the regulator, kept current so the permit stays active.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Vehicles: year, make, model, VIN, seating capacity and value.
- Drivers: names, dates of birth, license numbers and years of experience.
- Permit: your TCP number or city taxi permit, or that you’re applying.
- Operations: airport, corporate, events or street hail, with rough percentages.
- Drivers’ status: employees or independent contractors.
- Current policy: declarations page and loss runs.
What California's taxi statute asks of a permitted company
Taxi rules vary by state. In California, local taxi permitting is built on Government Code 53075.5, operative since January 1, 2019. It requires every city or county where a taxicab company is "substantially located" to adopt an ordinance or resolution covering taxi service in vehicles that carry no more than eight people, excluding the driver. A company is substantially located where it has its primary business address, or where trips originating in that city or county make up the largest share of its trips in each county it operated in over the previous calendar year. It can be substantially located in more than one. Operating a taxicab without a valid permit from each city or county where the company is substantially located is unlawful, with a minimum fine of $5,000 that the permitting city or county may impose administratively.
Under subdivision (h), every permitted company must:
- Maintain reasonable financial responsibility as the local ordinance requires; the statute sets no dollar figure.
- Join the DMV pull-notice program under Vehicle Code 1808.1 to regularly check all drivers' records, employees or contractors.
- Keep safety training for all drivers and disabled-access training making clear it is illegal to decline to serve a person with a disability or who has a service animal.
- Keep vehicles in safe operating condition, subject to annual inspection by the city or county, and give it an office or terminal address for document inspection.
- Provide a fingerprint-based criminal history check and a drug and alcohol testing program for drivers.
- Provide documentation and trip data in the format the local ordinance requires.
The insurance limit and certificate wording your permitting agency states are the starting point for every submission I send.
One regulator's written insurance rules: San Diego MTS
San Diego's Metropolitan Transit System shows how one local regulator sets the amount. Its For-Hire Vehicle Administration (FHVA) regulates for-hire vehicles in San Diego, Poway, Oceanside, Santee, El Cajon, La Mesa, Lemon Grove, National City, Chula Vista and Imperial Beach, and a permit application must include evidence of insurance meeting FHVA minimum requirements. MTS sets these minimum public liability limits, as combined single limits, by vehicle seating capacity including the driver:
- 9 passengers or less: $350,000
- 10 to 15 passengers: $2,000,000
- 16 passengers or more: $5,000,000
The insurer must be pre-approved by FHVA. The ACORD certificate must name San Diego MTS as certificate holder, list each vehicle's make, year, VIN and medallion number, and state that the insurer will notify FHVA in writing by registered mail at least 30 days before cancellation or termination; "Endeavor to Mail Notice" or "Intends to Notify" wording is not acceptable. A separate Insurer's Verification of Compliance must be signed by a current officer or employee of the insurance company; an agent's or broker's signature is not accepted. The insurer needs an A.M. Best or Demotech rating of B- or better and a financial size category of at least VII, or a similar S&P rating.
MTS lists unacceptable policy provisions, including self-insured retentions (unless the insured is a state-certified self-insurer under the Vehicle Code), nonstandard deductible endorsements, territorial restrictions, named driver or operator policies, aggregate limits and "indemnity only" contracts. Drivers also need a Sheriff's Driver Identification Card.
ADA rules for taxi service and ramp taxis
Federal rule 49 CFR 37.29 holds taxi providers to the ADA rules for private demand-responsive passenger carriers. A taxi provider is not required to buy or lease accessible automobiles. If it buys or leases a vehicle other than an automobile, that vehicle must be accessible unless the provider demonstrates equivalency under 49 CFR 37.105. It need not buy non-automobile vehicles just to have accessible ones in its fleet.
Prohibited discrimination includes, but are not limited to, refusing service to people with disabilities who can use taxi vehicles, refusing to assist with stowing mobility devices, and charging people with disabilities and their equipment higher fares or fees than other passengers.
San Francisco's ramp taxi rules go further. Each ramp taxi must be a wheelchair-accessible vehicle approved for use by the SFMTA, each driver needs a valid Ramp Taxi Training Certificate on file with the San Francisco Paratransit office, and holders must grant priority to passengers who use a wheelchair and ensure the ramp taxi completes at least ten Paratransit wheelchair trips each month. Missing it three consecutive months, or three times in six months, lets the SFMTA revoke the medallion or end the use agreement. For contract medical trips, see the NEMT page.
Taxi and black car insurance, answered
Does my personal auto policy cover driving a taxi or black car?
Usually not. The California Department of Insurance notes that most personal auto policies exclude a vehicle while it’s used as a public or livery conveyance, meaning driving for hire. The typical wording only carves out a share-the-expense car pool, so paid passengers need a commercial policy.
Who regulates taxis and black cars in California?
Taxicab service is regulated locally by cities and counties. Charter-party carriers, which provide prearranged service for the exclusive use of a person or group, need operating authority from the California Public Utilities Commission. A P permit covers charter service using only vehicles that seat 15 or fewer passengers.
How much liability does a black car need in California?
The CPUC minimum depends on seating, counting the driver: $750,000 for vehicles seating 8 or fewer, $1.5 million for 9 to 15, and $5 million for 16 or more. Class C charter-party carriers need $750,000 regardless of seating.
What happens if my coverage lapses?
The CPUC says failing to keep adequate, current insurance results in suspension of your operating authority, and revocation if it isn’t corrected within 90 days of the suspension date. Insurance filings are made electronically through the CPUC’s Transportation Carrier Portal.
What if I carry passengers across state lines?
For-hire passenger carriers in interstate commerce have federal minimums: $1.5 million for vehicles seating 15 or fewer including the driver, and $5 million for 16 or more. Tell me where your trips go so the policy and filings match.
Can my taxi company pick up passengers in another California city?
Under Government Code 53075.5, a company permitted by a city or county may provide prearranged trips (bookings through an app, dispatch or website) anywhere within that county, and a city or county cannot require its permits from a company or driver that is not substantially located there. Airport operators keep separate and ultimate authority over taxi access to their airports and access fees.
Do you offer taxi and black car insurance outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- California Public Utilities Commission: Passenger carrier FAQs (charter-party carriers, taxicab exception, liability minimums)
- California Public Utilities Commission: Insurance requirements for passenger carriers (filings, workers’ comp, suspension)
- California Department of Insurance: Notice to transportation network company drivers (livery exclusion)
- 49 CFR 387.33T: financial responsibility for for-hire motor carriers of passengers
- California Government Code 53075.5 (taxicab regulation by cities and counties)
- 49 CFR 37.29, Private entities providing taxi service (Cornell LII)
- SFMTA: Become a Taxi Driver
- SFMTA: Ramp Taxi Requirements Notice and Documents
- SFMTA: Types of Medallions
- San Diego MTS: For-Hire Vehicle Administration
- San Diego MTS: For-Hire Vehicle Permits and Requirements
- San Diego MTS: Insurer's Verification of Compliance and Insurance Requirements
Send your vehicles and drivers. I’ll shop it.
A vehicle list with seating, a driver list and your permit number are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
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