Taxi insurance is a specialist form of vehicle insurance designed for vehicles that are used for paid hire and purpose built vehicles, including black cabs, MPV's or minibuses and minicabs.
There are 5 basic categories of taxi insurance cover:
- Private Hire and Minicab;
- Public Hire & Black Cab;
- Minibuses & MPV's;
- Chauffeur Vehicles;
- Taxi Fleets.
Why is it necessary to have taxi insurance? Well, it's the law that every vehicle that is used for hire and reward must have adequate and appropriate taxi insurance as defined by the Road Traffic Act of 1988. Your standard form of vehicle insurance does not cover you and your passengers as a business. Whether as a full time taxi or part time mini cab, you need taxi insurance. Taxis have to be insured for any accident or passenger injury they suffer in the course of your duties as well as their property or third party property. Taxis have to be covered for the "carriage of persons for hire or reward".
There are basically 2 types of taxi insurance - 'public hire', which is normally associated with black cabs, which permit clients to 'hail a cab' and be picked up anywhere, and 'private hire' which requires all journeys to be pre-arranged via a taxi booking office where you initially phone to make your booking, then the taxi office will arrange with their available drivers to collect you from your home or predetermined pick up point.
What is covered?
Like traditional vehicle insurance, taxi insurance is available in three levels:
- Third party, third party fire & theft, and comprehensive.
- Third party taxi insurance is the basic entry level and, whilst protecting your passengers, it does not cover your actual vehicle if it is stolen, catches fire, you cause damage to it or it is involved in an accident. Only your passengers are protected, and your vehicle cost of repair or replacement will be down to you.
- Third party fire & theft is the same with the added benefits of covering your vehicle for fire damage and for theft. Comprehensive taxi insurance is the best and the most expensive, but it does mean your vehicle is covered for all accidents for damage repair and for replacement, no matter whose fault the accident was.
Like all policies, taxi insurance has an initial excess amount which is your financial responsibility to pay in the event of a claim. There will also be strict restrictions as to who can drive your vehicle and, to keep the costs down, it is cheaper to keep only you as the named driver. Taxi insurance providers will normally only provide taxi insurance cover to the proposer and not extend cover to spouse or partners. If they drive your vehicle they will only be covered as a standard non taxi driver and must not pick up passengers. The cover may also revert to third party only basic insurance, but in many cases the vehicle will not be insured at all and any one else driving your vehicle will be driving illegally, so you must talk to the insurer about this.
Taxi insurance is certainly more expensive than conventional insurance and, on average, it is certainly in excess of £1000 a year for third party fire & theft private hire insurance and over £2000 for comprehensive taxi insurance.
When booking taxi insurance you should shop around and carefully detail all questions and look out for things like excess amount, driver restrictions and windscreen cover. It's quite common that taxi insurance will not cover your vehicle for theft if you leave your keys in the vehicle, so you should always lock up even when you go to the petrol station to fill up.
A worthwhile addition is legal protection insurance to your taxi insurance, which will provide you with legal advice and representation in the event of a litigation claim and also help you to recover your uninsured losses if you have an accident which is not your fault. You could also consider purchasing discounted breakdown insurance together with your taxi insurance, which could get you back on the road quicker so that you can resume making money.