If you’ve been surprised by mounting insurance premiums, you’re not alone. The National Limousine Association (NLA), in partnership with the University Transportation Research Center (UTRC), recently released a groundbreaking report shedding light on what it calls an insurance affordability crisis threatening the future of the US chauffeured transportation industry, urging that immediate action be taken to prevent more damage. Drawing from a national survey of operators, the study found that a staggering 87% of companies have seen their insurance premiums rise in the past three years—many by double digits and even a full 25%—often despite strong safety records and minimal claims. Nearly half of respondents reported no claims at all, while 93% said none exceeded policy limits. The disparities among the states were also noted to be significant, in part due to no-fault laws, prolonged rate approval processes, and even extreme weather risks.
The report, which was spearheaded by UTRC Transportation Technology Chair Matt Daus of Windels Marx, draws attention to a concern that has been simmering across the industry for several years. Insurance costs have become one of the most widely discussed topics at shows and association meetings alike, many of which have included the sympathetic leaders of the major insurance companies and brokers in the conversation. Operators of all sizes have voiced frustration over escalating premiums that seem disconnected from performance or risk (even by companies with a well-defined and executed safety/training program), with some warning that the trend threatens to upend the financial stability of otherwise healthy businesses. For many operators, insurance has become their single largest fixed expense—a problem that could soon limit fleet growth and industry competitiveness if left unchecked.
To help operators and policymakers address the crisis, the UTRC report outlines a three-tiered framework for reform. At the operator level, it recommends adopting telematics and exploring alternative or pooled insurance models to better demonstrate safety performance—which was also discussed during the recent State of the Industry at the CD/NLA Show in Dallas (read more on page 36). On the regulatory front, it calls for faster rate approvals and formal recognition of verified safety programs. Finally, the report urges broader legal reforms to curb excessive litigation, fraudulent claims, and third-party lawsuit funding, all of which contribute to inflated costs. Yes, those so-called nuclear verdicts from the courts do have real-world consequences.
The NLA is now urging insurers, regulators, and industry stakeholders to come together in a unified dialogue and act swiftly on the report’s recommendations, much like it did when facing Uber’s illicit actions. As NLA leaders emphasize, this is not only a financial issue but an existential one for many small and midsize operators. Special credit was given to NLA Treasurer and Florida Limousine Association President Rick Versace of A1A Global Ground for his leadership and advocacy in bringing this data-driven conversation to the forefront.
“There are many root causes of this affordability crisis where operator costs are ultimately passed on to business travelers, and this report delves into the different issues in every state, but also offers concrete solutions for the industry, regulators and legislators to help stabilize premiums and mitigate risk,” wrote Daus. “It is my hope that this blueprint for meaningful change will ensure the continued vitality of the limousine industry, and my message to all involved is: ‘Use it or lose it.’ The very continued existence of the industry is at stake, so this report cannot sit on a shelf.”
However, insurance is not the only issue impacting operators. The UTRC is also drawing attention to another serious challenge: the rise (or rise again!) of illegal and unlicensed operators, now powered by technology. A new UTRC study, also authored by Daus in collaboration with the Chauffeured Transportation Association of New Jersey (CTANJ) and the Black Car Assistance Corporation (BCAC), examined the scope of unlicensed for-hire vehicles in the New York/New Jersey region. The report, Addressing Unlicensed and Illegal Ride Hailing in the NY/NJ Metro Region, identifies unauthorized taxis, limousines, and “off-platform” rideshare drivers as growing threats to public safety and legitimate businesses. These contractors often solicit passengers illegally at airports, nightlife districts, and event venues, typically without possessing the proper licensing, insurance, or background checks—leaving uninformed riders vulnerable, skirting regulations and taxes, and undercutting rule-abiding companies (i.e., YOU). While the study only addressed the Northeast, the issue isn’t limited exclusively to this region.
To combat this problem, the report offers a comprehensive set of recommendations aimed at policymakers, regulators, and law enforcement. Key solutions include expanding enforcement powers and penalties, targeting high-risk locations, cracking down on online promotion of unlicensed services (usually via Facebook, Craigslist, or other social media/chat-type groups) and leveraging technology such as geofencing and automated license plate readers to identify violators. It also advocates for public awareness campaigns to educate passengers, better coordination between regulators and industry associations, and reforms to simplify the licensing process for legitimate drivers.
When taken in tandem, these UTRC reports not only validate long-standing concerns but underscore the critical importance of unity to collectively advocate for the industry’s future.
Link to the insurance report: https://bit.ly/4hW1oQW
Link to the illegal operator study: https://bit.ly/4otuUzQ [CD0425]
