How Much Is Private Hire Insurance?

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.

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Factors That Affect The Price Of Private Hire Taxi Insurance

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.

Driver history

Before a taxi driver can get insurance, the insurer will need answers to the following sorts of questions:

  • Does the taxi driver have a clean driving record?
  • Does the taxi driver have any criminal convictions?
  • Has the taxi driver made any insurance claims in recent history?
  • Does the taxi driver have a poor credit rating?
  • How long has the taxi driver been driving?

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.

Policy type

There are different types of policies, based on the requirements of the taxi driver:

  • Private Hire Taxi Insurance is for drivers who carry passengers via pre-booked taxi bookings. Drivers who get work via ride-hailing apps (such as Bolt, Easy Taxi, Gett, GrabTaxi and Gett, Ola or Uber) fall under the category of private hire taxis.
  • Public Hire Taxi Insurance is for drivers who do not use a taxi booking system (i.e. these drivers pick up passengers who are hailing for taxi rides on public streets).

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:

  • Compulsory excess is a fixed amount of money that the driver must pay. The insurer sets this.
  • Voluntary excess is an additional sum of money that a driver offers to pay.

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:

  • Breakdown cover (to deal with the situation of a taxi breaking down on the road);
  • Legal or compensation claims (to deal with any legal disputes or compensation issues);
  • Windscreen cover ((to deal with shattered glass issues).

Vehicle type

Insurance firms are wary insure any vehicle that either:

  • Has a high probability of breaking down (i.e. very old vehicles), or;
  • Will be expensive to repair in the event of an accident (e.g. sports cars).

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).

Driver age

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.

Years of taxi experience

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.

Vehicle mileage

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.

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Types Of Private Hire Insurance Policies - What's Included?

When it comes to private hire insurance (or "PHV insurance" for short), there are three types of policies:

  • Third-Party;
  • Third-Party, Fire and Theft;
  • Fully Comprehensive Cover.

Third-party only

Third-party only is a type of private hire insurance that covers claims related to the following:

  • Damages sustained by third parties;
  • Injuries sustained by passengers and members of the public.

Third-party, fire and theft

Third-party, fire and theft is a type of private hire insurance that cover claims related to the following:

  • Fire damage to your vehicle;
  • Damage to your vehicle by virtue of theft;
  • Damages sustained by third parties;
  • Injuries sustained by passengers and members of the public.

Fully comprehensive cover

Fully comprehensive cover is a type of private hire insurance that deals with all claims related to the following:

  • Injuries to you, your passengers and members of the public;
  • Sustained damage to your personal property (including your vehicle) in the event of an accident;
  • Fire damage to your vehicle;
  • Damage to your vehicle by virtue of theft;
  • Damages sustained by third parties.

Need Private Hire Insurance?

What Can I Do To Reduce The Cost Of My Cover?

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:

Increase your voluntary excess

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

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

Use your local knowledge to stay clear of 'accident hot spots'. For instance:

  • Pick your fares carefully If a particular venue has a reputation for drunkenness or anti-social behaviour - then don't pick up any fares from the location (because, for example, dealing with drunk passengers can distract you from your driving);
  • Avoid roadworks As a professional taxi driver, you have the experience and expertise to deal with roadworks efficiently. However, for other motorists - roadworks are an emotional wellspring of anger, impatience and road rage.
  • Avoid heavy traffic Make a note of when road traffic is heaviest throughout the day, week, month and year. Heavy traffic increases the likelihood of accidents.

Pay your insurance annually

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.

Maintain a good credit score

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.

Consider purchasing an electric car

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.

Avoid insurance scams

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.

Shop around to find the best deals

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.

Looking for Private Hire Taxi Insurance?

How To Buy Private Hire Vehicle (PHV) Insurance

If you would like to purchase taxi insurance for a private hire vehicle (PHV), then you will need the following:

  • Your driver's licence;
  • Proof of identification (e.g. a passport);
  • Proof of address (e.g. a recent utility bill);
  • MOT Certificate;
  • Details of your vehicle (e.g. manufacturer, DVLA paperwork, etc.);
  • License information from relevant authorities (e.g. approval documents from your local council).

Get An Accurate Private Hire Insurance Quote Today

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!

Looking for Taxi Insurance for Private Hire?

FAQ's

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:

  • Night driving - Private taxis can only work when passengers are booking taxis. However, public taxis can work any time - and as such, they are more prone to working at night.
  • Drunk passengers - Private taxis tend to pick up passengers who are sober enough to use a taxi booking service. However, public taxis are susceptible to dealing with customers who might be drunk or anti-social.
  • Urban driving - Private taxis tend to perform more long-distance driving (e.g. driving between towns and nearby villages). However, public taxis tend to perform more 'urban driving' (i.e. driving in areas with heavy traffic).
  • Number of customers - On a day-to-day basis, private taxis tend to deal with fewer customers than public taxis.
  • Vehicle size - Private taxis tend to be smaller in size than 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.