usave.co.uk is supported by its users. When you make a purchase through links on our site, we may earn an affiliate commission
Taxi insurance is a specialist type of policy that goes above and beyond what a standard car insurance plan will cover. It protects you, your vehicle, and your customers in the event that you have an accident while at work. Premiums will be more expensive thanks to the higher risks involved, including higher mileage and the risk of customers making a claim against you.
If you transport people commercially in any type of vehicle, whether it’s for private or public hire, then it is highly likely that you will need taxi insurance. But although it’s more expensive than regular car insurance, it doesn’t have to be financially ruinous. Find out how insurance works for taxi drivers and discover the best ways to save money.
If you drive any type of road vehicle to transport people for payment, then you are to have required by law to have both a taxi licence and taxi insurance. You will need to have a valid taxi licence in order to apply for taxi insurance.
If you drive a taxi for profit but only have regular car insurance, your policy will be invalidated when it comes to making a claim, leaving you out of pocket. All taxi drivers, whether they drive a minicab, black cab, or Uber, needs to have the right type of insurance.
When you apply for taxi insurance, you will first have the option to choose your basic level of cover, which works similarly to car insurance. You will then be able to pick and choose which extras you want to add on to your policy. But first, you need to choose one of three levels of cover:
This is the minimum level of cover you are legally required to have to drive. It covers you in the event you injure someone else or damage a third party’s property.
This is an expanded level of cover to third-party, also including cover for your own vehicle if it is damaged by fire or stolen.
This policy gives you the greatest level of protection, but it can often be the most expensive. As well as third party, fire and theft, you will also be covered for any damage caused to your own vehicle.
After you’ve chosen your preferred basic level of taxi insurance, you will be given the option to add more layers of cover onto your policy. Some of these may be included as standard on certain taxi insurance policies, so you should always check before adding anything on that may be unnecessary.
Covers any compensation costs related to a customer suffering an injury whilst in your taxi. This is typically included as standard with taxi insurance policies, but make sure to check
Covers any legal fees should a third party make a claim against you after an accident.
Provides cover should your taxi breakdown, including roadside assistance and alternative transport.
Covers the cost of any repairs or replacement of your windscreen should it be damaged whilst on the job.
Extends your coverage for when you’re driving your taxi for personal use.
Covers any extra fees you may be charged for going over your estimated mileage.
Covers the cost of replacing your taxi licence or driving licence should you lose them.
Not all taxis are the same, and this fact is reflected in the various types of taxi insurance available. Almost any taxi will fall under one of the following two categories:
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 need public hire taxi insurance.
f your taxi has to be pre-booked, for example you drive a minicab or an Uber, then you’ll need private hire taxi insurance.
As a taxi driver, the price of your insurance premium will depend on a number of factors, including the level of cover you’ve chosen, the size of your vehicle, your location, and how long you spend on the road. However, taxi insurance tends to be more expensive than regular car insurance policies for several reasons, including:
Depending on your personal circumstances and level of cover, taxi insurance can range between £1,000 and £2,000+ each year.
You should also take excess costs into consideration. This is the fee you must pay before your insurer pays out on any claims. Usually, the higher your excess then the lower your premium, but make sure not to set it too high so that it becomes unaffordable to make a claim.
There are several ways you can make your taxi insurance policy cheaper, here are a few tips to help you reduce your premium:
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.
If you avoid claiming on your insurance, over time you will build up a no claims bonus, which will ultimately bring your premiums down.
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.
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.
Only pay for the cover you need. Do not over insure yourself with optional extras that you don't need.
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.