Taxi insurance

A taxi insurance policy is usually more expensive than a car insurance policy because driving a taxi comes with more risks. Fortunately, by increasing your vehicle's security, making sure you park securely and going through a broker like A-Plan, you can greatly reduce the price of your premium.

What insurance do taxi drivers need?

If you’re a taxi driver, the type of insurance you need depends on a number of factors, like whether you pick up passengers on the street or only take those who have pre-booked, how many seats your car has and whether you want to add on extras, like public liability insurance.

Some other factors that affect your policy are the area you operate in and whether your cab has any modifications, such as wheelchair access.

Continue reading to find out more about the type of insurance you should take out for your taxi.

What information do I need when taking out taxi insurance?

When shopping around for taxi insurance, you’ll be asked to provide the following information so that you’re covered for everything you need to be:

• The type of business you’re operating – Policies differ according to whether you pick up passengers from the side of the road or take pre-bookings only.
• The area you operate in – Your policy may become invalid if you drive outside of your operating area, so you must make sure you’re covered for all the regions you drive in.
• What type of vehicle you have – If your car has more than five seats, your policy needs to take this into account. You’ll also need to confirm whether your taxi has been modified in any way to make sure you’re covered for repairs or replacements.
• How many vehicles you’ve got – If you have a fleet of taxis, it might be better to take out taxi fleet insurance instead of individual policies for each one.

You’ll also be asked to confirm that you’ve held a valid driving licence for at least 12 months, you have a valid taxi licence and you’re over a certain age, which is usually 21.

What’s included on a taxi insurance policy?

Some of the things that can be included on a taxi insurance policy are:

• Public liability insurance – Also known as taxi liability insurance, this covers any legal fees or compensation you may have to pay as the result of a passenger injuring themselves or damaging their property while entering, inside or leaving your taxi. This is especially important for taxi drivers who regularly take children to school, as they’ll be liable for the child’s safety right up until they’ve seen the child walk through the school gates. Public liability insurance can also be extended to include your taxi premises.
• Legal cover – This is to cover your legal costs if you make a claim against someone, or someone makes a claim against you, following an accident.
• Personal use cover – If you want to use your taxi outside of work hours for anything not related to work, you’ll need to make sure you have this. Note that some local licensing authorities won't allow a partner to drive a taxi unless they’re a registered taxi driver too.
• Courtesy taxi – In case yours is off the road because of an accident.
• Breakdown cover – So you have peace of mind if you break down. You can also add separate onward travel, so any passengers you’re carrying can get to their destination.
• Cover for lost keys – This can include locksmith charges, replacements keys and locks, car hire and onward transport.
• Unlimited mileage – Taxi drivers do more miles than regular motorists, but having this will ensure you’re not charged for driving too much.

What level of taxi insurance cover do I need?

As with car insurance, you can choose between third-party, third-party, fire and theft and fully comprehensive insurance:

Third-party insurance

This is the minimum level of cover you need to drive on UK roads. It covers you for damage you may cause to other people, vehicles or property.

Third-party, fire and theft insurance

The next level up will also protect your vehicle against theft and damage caused by fire.

Fully comprehensive insurance

The highest level of insurance will cover you for damage caused to your vehicle or injury to yourself, even if you're the one at fault.

You’ll also usually be able to choose between the following:

• Policy only cover – This is the cheapest form of cover, but each time you add a new driver, the price will go up
• Named driver cover – This will cover the taxi driver only
• Any driver cover – This is the most expensive option, as it covers anyone who drives your taxi

What are the different types of taxi insurance?

Public hire taxi insurance

If you’re licenced to pick up passengers who haven’t pre-booked, you’ll need public hire insurance.

This type of taxi insurance usually applies to London black cabs or hackney carriages and is generally more expensive than private hire taxi insurance.

Private hire taxi insurance

Also known as private hire and reward insurance, this type of taxi insurance won’t cover you to pick up passengers who haven’t pre-booked.

It usually applies to minicabs and large multipurpose vehicle (MPV) taxis, such as people carriers.

If you’re a part-time taxi driver, you can also get short-term taxi insurance. It usually covers you for periods from one week, and can be cheaper than buying an annual policy.

What if I’m an Uber driver?

Even though Uber doesn’t define itself as a private hire company, private hire taxi insurance is the best option for drivers who work for them. This is because insurers do see Uber drivers as operating a taxi service.

Does taxi insurance cost more than car insurance?

You’ll generally have to pay more for taxi insurance than car insurance due to the following reasons:

• You cover a much higher mileage than most other motorists
• You’re more likely to drive in riskier areas with heavier traffic, such as in cities and towns
• You may often work at night time when there’s less visibility, again increasing the risk of an accident
• Carrying passengers increases the risk of claims being made against you

How can I get a better deal on my taxi insurance policy?

The price of a policy will vary depending on your individual circumstances. Your driving record, where you live, where you keep your taxi at night and what type of vehicle you drive will all be taken into account when generating a quote. 

But there are some ways in which you might be able to reduce the price of your premium. Some of these are:

Choose your taxi wisely

When deciding which taxi to buy, keep in mind that smaller taxis fall into lower insurance groups.

Don't make unnecessary modifications

While some modifications like wheelchair access are necessary, they can push the price of your premium up. So avoid any changes to your vehicle that are not essential.

Increase security

Insurers will see you as less of a risk if you install security devices, like CCTV systems, Thatcham-approved locks, immobilises or dashboard cameras.

Park securely

Your premium is likely to cost less if you keep your taxi on a driveway or, even better in a locked garage, overnight.

Don’t pay for extras you don’t need

There’s no point wasting money on optional add-ons that you don’t need.

Shop around for a quote

Going through a broker like A-Plan can help you get a better deal on your taxi insurance. We’ll compare quotes for you to get the best price for the level of cover you need.

Mention any no-claims discount

Your no-claims discount can save you a great deal on your taxi insurance, so don't forget to mention it.

Pay for your premium annually

Paying monthly usually costs more than paying for your premium in one go. This is because you have to pay interest on monthly payments.