Taxi insurance

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Do I need taxi insurance?

If you drive any type of vehicle to transport people commercially, then the law requires you to have both a taxi licence and taxi insurance. Taxi driver insurance protects you, your customers and your vehicle in the event that you have an accident while at work. You will need to have a valid taxi licence in order to apply for a taxi insurance policy.

Why is taxi insurance so expensive?

Taxi insurance tends to be more expensive than regular car insurance policies for several reasons:

• Mileage - You are likely to cover more miles a year, therefore increasing the risk of being involved in an accident.
• Precious cargo - You will also be transporting customers, increasing the risk of a claim being made against you in the event that your passengers are injured, or their property is damaged.
• Size - Your vehicle may also be larger, in order to transport passengers, and therefore it will be in a higher car insurance band, making your premium higher.

Types of cover

Taxi policies are similar to car insurance policies. They offer the same three levels of cover: 

• Third-party cover – This is the minimum cover you are legally required to have to drive. It covers you in the event you injure someone else or damage someone else's property.
• Third-party, fire and theft cover – This is an expanded level of cover to third-party which also includes cover to your vehicle if it is damaged by fire or stolen.
• Fully comprehensive cover – This policy gives you the greatest level of protection, but also is likely to be the most expensive. As well as third-party, fire and theft, you will also be covered for any damage to your vehicle or injuries to yourself and your passengers.

There are also a number of add-ons you can include in your taxi insurance policy such as breakdown cover and legal cover. It is recommended that you also include public liability cover in your taxi insurance policy as it could cover any legal claims made by your passengers.

Does it make a difference if I’m a private cab or public taxi?

If you drive a taxi that can be hired from the street, for example a London black cab or any other purpose-built taxi vehicle, then you'll also need public hire insurance.

Private hire insurance will cover you if you drive a taxi that has to be pre-booked and cannot be hailed from the street.

How do I make my taxi insurance cheaper?

There are several ways you can make your taxi insurance policy cheaper, here are a few tips to help you reduce your premium:

• Do your research - As with a standard car insurance policy, your car size, mileage and driving history will all affect the price of your insurance. Do some research into cars that are in the lower insurance groups and make sure you have a clean driving licence to keep insurance costs down.
• No claims discount - If you avoid claiming on your insurance, over time you will build up a no claims bonus, which will ultimately bring your premiums down.
• Security - Increase the security of your car. You can do this by making sure it is parked in a safe location, such as in a locked garage.
• Dash cam - Install a dashboard camera (dash cam) in your taxi. This means if you are involved in an accident then there is proof of how you were driving at the time.
• Be economical - Only pay for the cover you need. Do not over insure yourself with optional extras that you don't need.
• Shop around! - Make sure you compare car insurance providers, including specialist taxi insurers, in order to find the deal that is right for you at the right price.