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Do you need taxi insurance?
Whether you drive a black cab, an MPV, or anything in between, if you transport people commercially, you’ll need to have a taxi license – and taxi insurance to go with it. In 2021, cabs come in all shapes and sizes, and so do the insurance policies to go with them.
Simply put, if you drive a vehicle to carry passengers for a fare (either contracted or metered) then you’ll need a commercial taxi insurance policy. It’s a legal requirement in the UK and comes in two forms.
Keep reading to learn everything you need to know about taxi insurance, from what type of cover you’ll require to how premiums are calculated, and how you can keep them a bit cheaper.
Types of taxi insurance
There are two types of taxi insurance, and the one you need will depend on the way you interact with customers.
Public hire insurance
If you pick people up from the street without a prearranged booking, you’ll need public hire insurance. Simply put, it means any member of the public can hire your commercial service.
This type of insurance is required by those operating black cabs.
Private hire insurance
In contrast, private hire insurance is required when your pick-ups are prearranged; i.e you know the person and the place you’re picking them up has also been arranged in advance. This type of insurance is required by everything from airport pickup services, to pre-arranged minicabs for nights out.
Our expert says
If you pick people up and charge them for it – either with a meter or through a pre-arranged booking – you’ll need taxi insurance. Because of the number of miles involved and the hours you drive, it’ll tend to be more expensive than normal insurance – but there are ways of making your payments cheaper." - Curtis Moldrich - Automotive Journalist
How much is taxi insurance?
Taxi insurance tends to be more expensive than standard insurance due to the more challenging requirements of the job. Taxi drivers will often find themselves covering more miles at busier hours and on less familiar roads: all of these things generate increased risk and therefore higher premiums.
As you’d expect, taxi insurance quotes are also calculated based on the driver, the car, and the type of policy you need.
How can you make taxi insurance cheaper?
Get a suitable car
Insurance is partly calculated on the type of car you’re trying to get insured on. Cars are sorted into a group between 1 and 50 for insurance purposes, and generally the lower the group, the lower the premiums
Voluntary excess
You can reduce your premiums by upping your voluntary excess and agreeing to pay more before the insurance company pays the rest. While it may seem like a great idea to hike your voluntary excess up, remember that you may have to pay it one day – so make it affordable
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By comparing insurance policies here, you could save money and earn £35 cashback
Increase the security
Make sure your car uses a modern immobilizer or tracking device. Securing your car in a garage overnight may also help push your premiums down, as will installing CCTV and a dashcam within the vehicle
Pay annually
Paying for your car insurance year in one go could be a lot cheaper. You’ll avoid the added interest rates of paying monthly
Avoid modifications
Most insurance companies will increase your premiums if your car is modified – and others may refuse to insure it at all. Keep your car plain and stock for cheaper taxi insurance
Work out what you need
Taxi insurance can be had with a variety of useful extras, but they’ll end up costing you more. Analyse your usage and be sure to only get what you really need
FAQs
Why is taxi insurance so expensive?
Taxi drivers tend to cover more miles at busier hours and on less familiar roads than normal drivers. The result? More risk, and therefore higher premiums.
Can a taxi be used for personal use?
It can be, but only if the policy you choose states so. Be sure to check your policy will allow those without a taxi licence to drive the vehicle – some types of taxi insurance require anyone using the vehicle to have a taxi licence.
Will age affect premiums?
Just like conventional insurance, taxi insurance tends to get cheaper the older you are. However, some policies require drivers to be over the age of 21 or 25 – both key ages in the insurance world.
Useful information
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Please note:
- Cashback is only available for genuine quotes.
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*Cashback rates - £4 per valid taxi insurance purchase.