The Average Cost Of Taxi Insurance: What to Expect
Any taxi driver knows that it’s not just the money that you earn from fares that is important. The cash you spend on your annual outgoings, like taxi insurance, can also have a big impact on whether you can afford to take the family away on holiday this year or not. Taxis are not cheap to operate, so keeping those running costs down means more income at the end of the year.
So how much should taxi insurance cost? Marc Loud from Park Insurance says:
“taxi drivers should expect to pay on average £1,300 to £1,800 a year for their cover. If you’re paying more it could be time to try and find a better deal. And if you’re paying less, you might need to double check the fine print to make sure that you have the cover that you need”
Why is taxi insurance so expensive?
Despite being some of the most experienced drivers on the road, taxi drivers also spend much more time behind the wheel and so proportionally are at greater risk of having an accident. The cost of insurance hasn’t fluctuated that much over the past couple of years, and isn’t expected to move much above the 2018 rates this year either. This means it’s easier to factor in insurance costs to your annual budget, and put money aside for them. Also bear in mind that if you pay your premiums monthly instead of annually, you will pay more for the privilege.
Cheap taxi insurance – not always the best policy…
As with all insurance, a cheap deal does not always work out as good value in the long run. If you need to make a claim and find you can’t because of a detail in the small print, you could find yourself seriously out of pocket. It’s worth paying a little bit extra to make sure you have the cover you need, and complete peace of mind.
Is driving a taxi covered under ‘business use’ in my standard car insurance?
No. Your standard car insurance may include ‘business use’ (if you’ve specified it on your application) but that does not cover using your car or mini-van as a private hire vehicle, where you take money in return for carrying people or goods. You will need to buy specialist taxi insurance that includes hire and reward cover. Bear in mind that without the correct hire and reward insurance, your local authority may not grant you a taxi or mini-cab licence to operate.
What is hire and reward insurance?
Hire and reward insurance specifically covers you to carry people (or goods) in your vehicle in reward for payment. You’ll need it to work as a taxi driver, rideshare driver, to drive a wedding or prom car, if you are a courier, or deliver food in your vehicle, for example as a Deliveroo driver.
Insurance for Uber drivers
If you’re an Uber driver, it’s your responsibility to make sure that you have the right insurance. As Uber does not own the vehicles, they are not responsible for insuring them – that’s down to the individual driver. Even if you’re only driving for Uber part-time, you’ll need to have hire and reward insurance as part of your policy or you could be prosecuted. That means you can’t just drive using your standard vehicle insurance.
Insurance companies treat Uber and other rideshare drivers in exactly the same way as private hire taxi drivers. But there are some ways that you could try and get a cheaper price for your premium. If you’re only working part-time, you may do a lower mileage than other hire and reward drivers. Tell your broker and they may be able to use this to negotiate a better deal. Just be careful not to underestimate your mileage or you may invalidate your cover.
What’s the difference between private hire insurance and public hire insurance?
Private hire insurance is designed for drivers of minicabs or rideshare vehicles that can only be pre-booked, not hailed on the street. Public hire insurance is for vehicles like hackney carriages and black cabs, which are licensed to pick up fares on the street as well as at a designated taxi rank or through pre-booking.
Not all insurance companies will offer both, and it’s really important to make sure that the taxi insurance cover that you take out is appropriate for your specific needs.
Things to watch out for
Does your policy include public liability insurance? If it doesn’t then you could be in for a shock if a member of the public makes a claim against you for injury or damage to their property.
Public liability gives you the reassurance that your legal fees are covered. It comes as standard with many taxi insurance policies, but you may have to specify it as part of your package as it’s not always automatically included in many of the cheapest deals. Read the small print carefully or explain to your taxi insurance broker that this is something you definitely want to have included in your policy, and they’ll make sure it’s part of your package.
Do you want to risk it?
Before you purchase your new policy, ask if it provides legal assistance. This can be invaluable if you have an accident that isn’t your fault and you need to take legal action, such as being hit by an uninsured driver. Make sure that any costly gadgets, like your phone or card machine in your cab, are also included with gadget cover.
Keep an income coming in
An accident, even a minor one, can stop you from earning a living. Plan ahead in case something happens that takes you off the road, so you can be sure your bills are covered. Check the small print in your insurance documents to make sure that it will provide a similar vehicle if yours is being fixed after an accident. If you normally drive a large comfortable saloon, your customers will not be happy if you turn up in a cramped super mini!
It’s also worth considering other insurance add-ons that can help you out financially if you’re unable to drive for a period of time. Speak to your insurance broker about loss of earnings cover, which pays out if you can’t drive for a period of time due to an accident. And consider carefully if you also need personal injury cover, which will pay out cash if you have an accident that means you’re unable to work for any period of time.
Other types of taxi insurance add-ons
Have you purchased your private hire vehicle on hire purchase? If so, you might want to add on gap insurance to your policy. All vehicles depreciate as they get older (unless you’re taxi-driving in a DB5!). If your car is written off or stolen, your insurance company will pay out the amount of money for an equivalent vehicle of the same age and condition. Unfortunately, this can sometimes be a lot less than the amount you still have left to pay on your HP.
Gap insurance covers this difference, so you won’t have to keep paying for a car that you no longer have or can’t drive.
I have a fleet of taxis – what insurance do I need?
If you operate a fleet of taxis, you’ll have additional insurance considerations. Taxi fleet insurance protects all your vehicles under one policy. You might want to consider all-driver cover, which allows any driver to drive any of your vehicles. This can be more cost effective and easier than named-driver cover.
By law, you’ll need employer’s liability insurance if you employ any members of staff, even if they work part-time or are a member of the family. If you operate from an office, you’ll need cover for the buildings and contents. Bear in mind that not all contents insurance will cover highly technical equipment such as radios, so check with your broker to make sure you’re getting exactly what you need.
Insuring large vehicles
Minibuses and minivans can be insured as taxis but you’ll need to specify the number of seats when you get your insurance quote. You’ll also need to make sure that you don’t exceed the number of passengers or your insurance will be invalidated. You’ll also need to ensure that you have the correct licence to drive a mini-bus with more than 16 seats, otherwise you could be breaking the law and invalidating any insurance you may have.
Do I need specialist insurance for my taxi if it has disabled access?
If your vehicle has been modified to provide disabled access, make sure you tell your insurance company. These modifications can make a vehicle more costly to repair or replace than standard models. If you haven’t declared them in advance, your insurance could be invalidated if you do need to make a claim.
What about personal use?
Do you want to use your taxi for yourself? Double check that your insurance also covers you to use your vehicle when you’re not working.
Taxi insurance for new drivers
If you’re new to driving a taxi, you might need to brace yourself for higher premiums for the first couple of years. You can’t normally transfer any no-claims bonus earned driving your private-use car.
Instead, you’ll need to build up a record as a taxi driver. As most taxi companies will not accept drivers under the age of 21 (or even 25), you do have that on your side. It’s also worth telling your broker how many years you’ve had claims free as some insurance companies may take this into consideration when quoting, but don’t count on it.
How can I reduce my taxi insurance?
The best way to get the best price taxi insurance is to be a safe driver. If you have a record of no-claims you might get a better deal. Conversely, if you have points on your licence, you’ll feel the pinch of higher premiums as a result. Bear in mind too that points can jeopardise your licence to operate, so it’s in your interest to keep your licence as clean as possible. This can help to keep the cost of insurance down.
“Average costs can vary. If a driver has a no-claims record or points on their license are important factors. Another possible factor is changes in government legislation.”
Marc Loud, Park Insurance
Tips to save money on your taxi insurance
There are a number of ways you can help to reduce your insurance premiums, without skimping on the cover. Here’s our top 7 tips:
- Pay annually. If you pay monthly then you’re going to get hit with high interest rates. To save money, ask to pay it in one go instead.
- Take out breakdown cover at the same time. Buying this together with your motor insurance could save you money.
- Improve security. Fitting a CCTV or adding Thatcham-approved security devices is an investment that could help to reduce your premiums. Check with your insurance company before you do, though, as if they don’t have the specific device listed in their preferred security tables, it won’t make a blind bit of difference to your premium and could end up costing you money, rather than saving it.
- Be a safe driver. Like all insurance, if you make a claim, your insurance premiums will shoot up. Any penalty points for speeding will also send your costs up, and potentially jeopardise your operating licence.
- Accurately estimate your annual mileage. The lower your annual mileage, the less time you spend on the road and the lower your risk. That can mean cheaper insurance. You’ll need to be as accurate as you can because if you make a claim and your mileage is higher than you estimated, your insurance could be invalidated.
- Contact insurance companies that specialise in taxi insurance, as they’ll understand your unique needs. Not all insurance companies want to take on the risk of insuring a taxi and offer high premiums to reflect that. To get the best value deal, look for companies that are happy to offer specialist cover such as Private Hire insurance.
- Shop around for the best price. You might have found an insurance company that is happy to offer specialist taxi insurance, but don’t stop there. Every insurance company uses different factors when calculating how much risk you pose. That means it’s possible to get very different prices for very similar cover from different insurance companies. The more companies you contact, the more likely you are to find the best price that’s out there.
We understand that you’d rather be out on the road picking up fares than dealing with the paperwork. If you don’t have the time to contact insurance companies, or don’t know where to look, use an experienced broker like Park Insurance to do the ringing round for you.
We have over 30 years of expertise helping taxi drivers to secure the best value Private Hire insurance and Public Hire cover. Our understanding of your business and preferred status with some of the UK’s biggest insurance companies helps us to negotiate great prices on your behalf. We’re independent, so you can be sure we’re selecting the best value deals from a panel of insurers. That means you can be confident we’re finding you the best price.
For a free quote for taxi insurance call our friendly team now on 0117 955 6835 or get a quote.