Written by Chris Richards, Managing Director
On a mile-by-mile basis, taxi drivers are probably the safest motorists on the road.
However, because taxi drivers accumulate a lot of road miles on a daily, weekly and monthly basis - the probability of an accident is higher than that for most other motorists.
Accidents involving taxi drivers don't tend to be serious. But when accidents do occur - they can be an endless source of stress, anxiety, litigious paperwork and financial disputes.
Here at Utility Saving Expert, we help taxi owners compare insurance costs from 36 different providers. So we have prepared this guide to help you choose a taxi insurance policy that best suits your needs.
When a taxi driver applies for insurance, the insurer will use its understanding of risk and statistics to calculate a suitable price for the car insurance premium.
The insurer will consider the following factors in their calculations.
Before a taxi driver can get insurance, the insurer will need answers to the following sorts of questions:
It is unlikely that answers to the questions mentioned above will result in the insurer refusing to insure a taxi driver. However, if the insurer believes that a taxi driver poses a financial risk to the insurance group - then the insurer will ask the driver to pay a higher car insurance premium.
There are different types of policies, based on the requirements of the taxi driver:
Insurers also consider a driver's car insurance excess. This is an amount that a driver agrees to pay to the insurer in the event of a claim. Car insurance excess has two components:
For instance, if a taxi driver has a compulsory excess of £300 and a voluntary excess of £200 - then his total car insurance excess (i.e. the amount he would need to pay his insurer in the event of submitting a claim) is £500.
Furthermore, the cost of taxi insurance goes up for cover related to:
Insurance firms are wary insure any vehicle that either:
Also, insurers tend to offer lower car insurance premiums for vehicles that are fuel-efficient and have five standard seats (especially for private hire work).
Insurers tend to offer taxi insurance to drivers aged between 23 and 75.
For some insurers, the lower age limit is 21 - whereas for other insurers, the lowest age they will insure is 25.
Also, most taxi insurance firms will only accept applications from drivers who have had a driving licence for at least 12 months.
The more experience you have of being a taxi driver, the less likely you are to have an accident throughout any given year.
Therefore, insurance firms tend to offer lower taxi insurance premiums to more experienced drivers.
The more mileage a vehicle has, the more wear and tear it has. This increases the probability of a breakdown and increases the financial cost (for insurers and motorists) of a breakdown.
In the UK, the average annual mileage of a motorist is 7,400 miles. However, according to a 2019 survey, over 69% of taxi drivers reached an annual mileage of over 15,000 miles.
When it comes to private hire insurance (or "PHV insurance" for short), there are three types of policies:
Third-party only is a type of private hire insurance that covers claims related to the following:
Third-party, fire and theft is a type of private hire insurance that cover claims related to the following:
Fully comprehensive cover is a type of private hire insurance that deals with all claims related to the following:
If you would like to reduce your taxi insurance cost, then you should ask yourself: "How can I reduce the financial risk for my insurer?"
Consider the following ideas:
In general, having a higher voluntary excess means less risk for your insurer. This usually means lower insurance premiums for you - but only if the insurer believes that you have the financial means to pay the voluntary excess in the event of you making a claim.
Install a dashcam to record what is going on inside and outside your vehicle. If you are then involved in an accident that wasn't your fault, your dashcam footage will be invaluable during court proceedings.
In fact, the existence of supportive dashcam footage might even lead to a swift out-of-court settlement.
Use your local knowledge to stay clear of 'accident hot spots'. For instance:
It is tempting to think that monthly insurance payments represent an easy way to get cheap taxi insurance.
But in reality, monthly payments represent an extra financial risk for your insurer - and your insurer will just pass on this risk back to you in the form of higher insurance premiums.
So, just like standard car insurance, make sure to pay for your taxi insurance via a one-time annual payment if you can afford to do so.
Your taxi service is a business - and whether you like it or not, insurers will use your personal credit score to gauge your competence as a business owner.
So work hard to maintain a good credit score. If you start to experience financial problems, seek professional advice as soon as possible.
Electric cars tend to be less powerful than petrol or diesel cars.
Therefore, most insurers will offer a lower insurance premium to customers who use electric cars.
If an apparent insurer offers car insurance at a price that is too good to be true - then it is most probably a scam.
And in the event of an accident - all insurance scams will result in you paying more money!
Whichever insurer you choose to use - make sure that the company is under the regulatory oversight of the Financial Conduct Authority.
Taxi insurance is a competitive marketplace. As a result, many insurers are keen to secure your business via special offers and discounts. That's why it's always a good idea to compare private hire insurance.
If you would like to compare the prices and services of different taxi insurance companies - then please visit our comparison website for cheap taxi insurance.
If you would like to purchase taxi insurance for a private hire vehicle (PHV), then you will need the following:
If you would like to get an accurate insurance quote for your private hire vehicle - then please visit our insurance website for private hire vehicles. You can compare private hire insurance from many different providers to find the lowest private hire insurance cost!
In general, private hire insurance is cheaper than public hire insurance. This is because insurers see private hire (taxi) work as being less risky than public hire work.
The easiest way to think about this is to compare the work of private taxis with that of public taxis:
Technically, unlike standard car insurance, private hire taxi insurance is not a legal requirement - but it is highly recommended.
Furthermore, many local authorities will only grant you taxi insurance if you have public liability insurance (which is, in effect, a more comprehensive form of private hire taxi insurance).
Normally you can have 3-4 named drivers on your private hire taxi cover.
However, more named drivers on a policy will mean more expensive insurance premiums.
When you purchase private taxi insurance, you can stipulate the commencement date of your policy. However, you cannot do this retrospectively (i.e. you cannot specify a date that is in the past).
It is good practice to finalise all your insurance paperwork at least 24 hours before you wish to start work as a private hire taxi driver.