Taxi insurance is a definite must for all taxi drivers. Driving a taxi comes with various levels of risks that often trump the possible hazards of driving a domestic car. Also, since your car is your source of income, you must do everything in your power to protect yourself and your vehicle with the correct type of insurance.

Thus, you need to assess and compare taxi insurance to know which one is the right choice for you. Read on to learn all about taxi insurance.

What is taxi insurance?

Taxi insurance is a specialist insurance policy that covers you, your vehicle, and your passengers. One of the legal requirements for being a professional taxi driver is to have taxi insurance.

Regular car insurance will not adequately cover you. You are more likely to drive more miles as a taxi driver, making the insurer’s risk higher. This is naturally reflected in the insurance premiums. Additionally, you’ll have passengers with you, who will also need to be accounted for if something happens to your vehicle.

If you are caught without the right cover, you don’t only have to pay a heavy fine, but you can also lose your licence. Needless to say, this will lead to drastic consequences for your livelihood.

Types of taxi insurance

There are certain types of taxi insurance, based on the kind of service you provide:

  • Public Hire Taxi – These kinds of taxis can be hailed in the street by the customers, and they don’t need to book these taxis in advance.
  • Private Hire Taxi – These taxis are booked in advance. The pre-booked service includes minicabs and multi-purpose vehicle (MPV) taxis.

Who can apply for taxi insurance?

Keep in mind the eligibility criteria may vary depending on the policy. Generally, you can apply for taxi insurance coverage if you fit the following criteria:

  • You have had a UK residence for a minimum of 5 years.
  • You have had a valid driver’s licence for a minimum of 3 years.
  • Your full-time job is being a taxi driver, i.e., you do not have any other jobs.
  • You are at least 21 years old. However, some policies only cover taxi drivers who are 25 years and older.
  • You have had your taxi badge for 12 months, at the least.

Types of Coverage

There are many insurance policies available, and while it may be a no-brainer to choose the cheapest one, it isn’t always the best idea. When you are insuring your taxi, make sure you choose the policy that’s the best option for you and your vehicle.

Third-Party Insurance

Third-party insurance is the simplest type of coverage and offers the legal minimum. In case of an accident where you are at fault, this will cover your passengers, third-party property damage, and personal injuries. It doesn’t cover damage to your taxi.

Third-party, Fire, and Theft

This type of protection covers the third party, their vehicle, their passengers, and your passengers, in the event of an accident. The policy will not cover your vehicle. However, it will cover any fire damage to your car or if it’s stolen.


The comprehensive policy offers the highest level of coverage. In case of an accident where you are at fault, it covers damage to the third party as well as your vehicle. Additionally, it protects against damage due to vandals and more.

Add-ons with your taxi insurance

Public Liability Insurance

Cheap public liability insurance generally covers you if a passenger suffers injury or property damage in your taxi. The add-on covers legal and compensation claims that may be a product of these occurrences.

Personal Use Cover

You will need a personal use cover if you wish to use your vehicle when you aren’t working. Take into consideration that this add-on may or may not cover your partner if they use the taxi. Read through the policy thoroughly to search for this information.

Unlimited Mileage

This add-on is worth it if you drive a significant number of miles every year. It protects you from being charged for driving too many miles. Assess the average number of miles you drive in a year, and accordingly decide if you need the coverage or not.

Why is the taxi insurance expensive?

Taxi insurance is expensive and generally, rightfully so. Taxi drivers spend a lot of time on the road, which puts them at a greater risk of an accident than domestic drivers. Even if you are a skilled driver, it doesn’t necessarily decrease the chances of an accident.

In addition to that, lawsuits can be too costly. So, insurance has to cover your passengers as well as your vehicle. Ethically, it is your responsibility to make sure your passengers are protected, and insurance is a way to do that.

Similar to regular car insurance, some policies allow annual or monthly payments. Usually, monthly premiums are more expensive.

More than cheap taxi insurance, it’s much better to go for the one that provides the best overall value. You surely don’t want to be caught in a situation wherein you need to claim that your insurance doesn’t cover, forcing you to pay out of your pocket.

Additionally, standard car insurance generally includes a “business clause” that doesn’t cover using your car as a taxi.

Tips to save money on your taxi insurance

  • Opt for annual payment as opposed to paying monthly as monthly premiums are costlier.
  • Installing security measures like CCTV or Thatcham helps lower the cost of premiums. Though, before installing, check the policy to see if the addition of security measures leads to a lower premium expense.
  • Drive safely, obey traffic laws, and be diligent for lower premiums. Penalties for speeding increase your rates, so be careful as it could also lead to you losing your operating licence.
  • Estimate your annual mileage accurately as insurance rates and mileage are often directly proportional. Low mileage may help make the rates cheaper.
  • Purchase taxi insurance from companies that specialize in the same as they will have a greater understanding of the policies and your business than general insurance companies.


Taxi insurance is a legal requirement and saves you from various damages, situations, lawsuits, etc. Instead of paying high compensation rates for possible problems, investing in taxi insurance can save you money and help protect your licence.

Insurance companies have a different risk factor calculation, which is connected to the amount you need to pay. Price will inevitably vary from company to company. Thus, always compare taxi insurance prices and opt for the most suitable taxi insurance provider with the most affordable prices.