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What insurance do you need for your taxi?
Whether you are a new taxi driver looking for cover, or you’ve got years of experience and are looking for the best policy, here is everything you need to know about taxi insurance.
What is taxi insurance?
Taxi insurance is a specialist vehicle insurance policy designed to cover cars used for commercial hire. If you work as a taxi driver, a regular car insurance policy will not be enough to protect you
Taxi insurance, however, will protect you and your vehicle, as well as your customers. It’s necessary whether you drive a black cab, private hire vehicle or an Uber.
Do you need taxi insurance?
If you drive a taxi for a living, it is a legal requirement to have a valid taxi insurance policy.
Depending on what type of cab you drive and where your drive it, you will need a specific taxi insurance policy, as outlined below…
PCO insurance
PCO stands for Public Carriage Office and is a division of Transport for London (TfL) that licenses black cabs and mini cabs in London. PCO licensed taxis therefore need PCO insurance.
Public hire taxi insurance
Public hire taxi insurance provides cover for taxis that can be hailed down by customers on the street or picked up at a taxi rank. These taxis can display a taxi sign.
Only public hire taxi insurance will cover you to pick up customers without a booking.
Private hire taxi insurance (private hire and reward)
Private hire insurance provides cover for taxis that must be pre-booked in advance and includes most minicabs and large multipurpose vehicle (MPV) taxis like people carriers.
Sometimes called private hire and reward insurance, it will not cover you to pick up customers without a booking from places like train stations or taxi ranks.
Do Uber drivers need insurance?
Private hire insurance is the most suitable cover for drivers working for Uber and its competitors. Uber does not like to define itself as a private hire company, but insurers will see Uber drivers as operating a taxi service and will require them to have appropriate insurance.
Transport for London has confirmed that Uber drivers from anywhere in the UK can currently pick up and drop off in London providing the booking comes from the area in which they are licensed.
However, TfL warned that it is lobbying central government for more control over this. It said: “We do not have powers to restrict this type of cross border operation and are currently raising our concerns with government to ensure we have appropriate controls”
Can I take paying passengers on normal car insurance?
Regular car or van insurance usually becomes invalid if you're carrying a paying customer — so you'll need a commercial private hire policy instead. Uber drivers should also make sure to have public liability insurance, whether through Uber, their vehicle policy or a standalone cover (more on this below).
Short-term taxi insurance
Short-term taxi insurance can be a good choice for those working as a taxi driver on a part-time basis as it offers flexible cover that can be cheaper than taking out an annual policy. Short-term insurance typically offers cover for periods from one week upwards.
Who can get taxi insurance?
Many taxi insurance providers will only offer cover if you:
Have held a valid driving licence for at least 12 months
Are over a certain age, usually 21, but some specify you must be at least 25 years old
Have a valid taxi licence
What to look out for when you apply
When you apply for taxi insurance you will need to confirm your operating area. You may not be covered to work outside of this, so read the eligibility criteria carefully first to save a wasted application.
The level of cover you can get may be restricted by the area you work in. Some policies only offer fully comprehensive cover if you are registered in certain areas so check your policy carefully.
What cover do you need?
Taxi insurance offers the same three levels of protection as standard motor cover: fully comprehensive; third party, fire and theft; and third party only cover. You can find out which level is right for you in our guide.
However, there are other cover options specific to taxi insurance you should also consider, including:
Public liability insurance: this protects you if a customer suffers a personal injury or property damage while either in, entering, or leaving your taxi. It will cover any legal or compensation claims that occur as a result. Most taxi insurance policies will include this cover as standard but check the policy carefully as not all do
Personal use cover: you will need this in place if you plan to use your taxi for day-to-day use when you are not working. If you also want your partner to use the vehicle check that your local authority allows unregistered drivers to drive licensed taxis, as not all do
Unlimited mileage: as a taxi driver you will drive a large number of miles each year, so an unlimited mileage policy will ensure you will not be charged for driving too much. Look at how many miles you drive on average each year to work out whether this cover is worth it
Breakdown cover: this will provide roadside assistance should your taxi break down when carrying passengers or between drop-offs and pick-ups
Legal cover: covers the legal costs involved if you make a claim against someone or a claim is made against you following an accident
Additionally, you can usually choose between:
Policy only cover: the cheapest and most basic form of cover, but the price will increase each time you add another driver to the policy
Named driver cover: provides cover for the taxi driver only
Any driver cover: provides cover for anyone driving your taxi, providing they are over a certain age (typically 25). This is the most expensive option
How much does taxi insurance cost?
Taxi insurance is on average more expensive than standard cover because:
You will drive more miles each year
You will carry more passengers, increasing the risk of personal injury claims
Taxi cabs are larger than average cars, so will sit in a higher insurance group
Taxis often operate during unsociable hours and frequently drive in heavy traffic
The price of your taxi insurance will depend on the same factors as standard car insurance including the vehicle you drive, where you live, where you keep your taxi and your driving record.
You can find a full list of all the factors that can affect the cost of your cover in this guide.
How to reduce the cost of your cover
The best way to find affordable cover is to shop around and compare quotes. Most regular car insurers do not cover taxis, but you can find specialist companies that do.
You can also reduce your premiums by building up a no claims history, choosing a sensible vehicle, and by installing security features like CCTV into your taxi cab. Read our guide to discover more ways that could help keep the cost of your taxi insurance down.