Guide to taxi insurance
By Alan Boswell Group
Taxi insurance can help cover costs should the unexpected happen and should be one of your primary considerations if you’re thinking about how to become a taxi driver. But what do policies include and how much do they cost?
To help you find the right policy for your needs, here’s our in-depth guide to taxi insurance.
What is taxi insurance?
Policies are designed specifically for taxi businesses and cover your car so it can be used to transport fee-paying passengers. It’s also known as hire and reward insurance.
Similar to standard car insurance, you’ll be able to choose from one of three levels of cover:
Third-party only
Third-party, fire and theft
Comprehensive
When you choose a policy, you’ll also be able to specify who drives the car:
Named driver means only this person can drive the taxi.
Any driver means anyone can drive your taxi as long as they have your permission and meet any conditions (for example, age limits or licence restrictions).
How is taxi insurance different from standard car insurance?
Standard car insurance only enables you to use your car for certain purposes, known as its ‘class of use’. For example, social, domestic and pleasure (SDP), plus commuting. Policies don’t cover using your car as a taxi and the additional risks of transporting passengers.
Does taxi insurance cover goods, packages, and personal items that belong to passengers?
Some policies will cover packages and items belonging to fare-paying passengers, but some won’t, so you’ll need to double-check your policy wording carefully.
Do I need private hire or public hire insurance?
In insurance terms, there is a difference between public hire and private hire taxis. Your taxi insurance needs to cover the way your car is used so you’ll often need to specify the way you pick up fares:
Private hire insurance covers you for prebooked journeys, for example, airport or school runs.
Public hire insurance covers fares you pick up at taxi ranks or hailed from the street. This usually means you’ll need to be licensed as a Hackney Carriage (black cab) service.
What isn’t covered by taxi insurance?
Taxi insurance typically won’t cover you for unauthorised use or wear and tear to your car, but your policy documents will clearly set out what’s included based on the level of cover you’ve chosen. For example, third party only covers the cost of damage to other people’s cars, not your own.
If you’ve added extra covers, these will also be listed on your policy.
What options can I add to my policy?
When you buy taxi insurance, you’ll usually be offered a range of optional extras, giving you greater protection and peace of mind. Options will vary by insurer and will cost a little more, but popular add-ons include:
Public liability insurance
Public liability covers costs if a member of the public blames you or your business for injury or damage to their property. For example, if you dropped and damaged someone’s luggage or trapped their hand in your taxi door.
Personal use
If your taxi doubles up as your regular day-to-day car and you drive it for personal use, you’ll need to make sure this is reflected in your policy.
Breakdown cover
Provides help if your taxi breaks down on the road with the aim of getting it back up and running as soon as possible. This is a popular policy for those who rely on their vehicle for their income.
Legal expenses
If you need to defend yourself in court or want to take action against someone else, legal expenses covers the cost. For example, if another driver caused an accident and you wanted to claim for loss of earnings while your taxi was being repaired.
Excess protection
Reimburses the cost of your excess if you make a claim.
Who needs taxi insurance?
If you drive a taxi, you must have suitable taxi insurance by law. If you don’t have a policy that allows you to transport passengers for money, you won’t be covered if you’re involved in an accident.
Insurance that doesn’t reflect how you use your car means any claim you make can be rejected. Your insurer could also void or cancel your policy, which you would need to declare when you renew your insurance. This can cause problems later on, leading to higher premiums or difficulties finding an insurer that will cover you.
How much does taxi insurance cost?
As with most insurance policies, the cost of taxi insurance comes down to several factors and insurers will consider each one to work out your premium, including:
the level of cover you choose;
the number of miles you drive;
where you live, work, and where your taxi is parked overnight;
your driving and claims history.
Bear in mind that taxi insurance is likely to be more expensive compared to standard car insurance. This is simply because there’s greater risk involved when you drive a taxi. As well as covering more miles than the average driver, you’re usually out and about during busy times and late at night.
Protecting your business with taxi insurance from Alan Boswell Group
Driving a taxi or running your own taxi firm can be stressful, but arranging your taxi insurance shouldn’t add to the difficulty.
For advice and guidance, you can speak to a member of our team, who’ll talk you through what you need and the available options.