A Guide to Private Hire Insurance For New Taxi Drivers

If you’ve got a driving license and you’re thinking about a change in career, being a taxi driver may just be the right choice for you. Many existing drivers in the profession enjoy the freedom it affords them, as they can work hours that suit them, and being your own boss is never a bad thing.

With the rise of ride-hailing companies such as Uber, it’s now easier than ever to get started, as the mobile app can find you your first customer within minutes. However, before you do get started you will need the relevant license and a suitable private hire taxi insurance policy.

Why do I need private hire insurance?

Anyone who is driving a taxi and transporting passengers that have pre-booked a journey will need a private hire insurance policy, as it is a minimum legal requirement in the UK. The main purpose of this cover is to protect you in the event of a claim, either by a customer or if you or your vehicle are involved in an accident. If you do not have sufficient cover, you are breaking the law and will not be able to pursue a claim should the unexpected happen.

What is the difference between private hire and public hire?

As a private hire taxi driver, all journeys must be pre-booked in advance and customers cannot hail your vehicle from the street. Public hire drivers can be hailed from the street, these are far more common in capital cities such as London. Public hire drivers have additional requirements before they can obtain the necessary license and will usually have a sign displayed on the top of their vehicle. In most cities and towns across the UK, you are far more likely to see private hire taxis.

What else does private hire insurance cover?

Private hire cover should include public liability as standard. If a passenger was injured or their property was damaged while in your vehicle, it offers protection for compensation claims made against you. 

Most taxi drivers that buy private hire insurance will normally be covering tens of thousands of miles each year. Professionals will also be working unsociable hours and be in regular contact with passengers. All of this increases their risk factor, and therefore must be accounted for in private hire taxi insurance.

What are the different levels of cover?

Similar to standard car cover, there are three main levels of cover for taxi drivers to choose from. These are as follows:

Third party only

A third party only policy covers you for injury and damage caused to other people that you were responsible for. This is the minimum level of cover required for taxi drivers in the UK. It does not provide compensation for any injury or damage caused to you or your vehicle. 

Third party, fire and theft

A third party, fire and theft policy offer the above, but also provides cover if your vehicle is stolen or has been damaged by fire. Again, it does not include compensation for you or your taxi if you were involved in an accident.

Comprehensive private hire cover

A comprehensive private hire insurance policy offers the highest level of protection, and will cost more than other levels of cover. It includes everything found in a third party, fire and theft policy in addition to compensation for you and your vehicle should you be involved in an incident or accident. Many comprehensive policies also include legal expenses and medical cover as standard. However, it is worth noting that not all comprehensive policies are the same and may have slight variations to what is included and excluded. 

How can new taxi drivers save money on private hire insurance?

As a newly qualified taxi driver, there are a number of ways you can save money on your yearly premium. Your first step should be choosing a car that falls into a lower insurance group. Fuel consumption through the number of miles per gallon your taxi can drive will also play an important role, especially when you already know that you will be covering tens of thousands of miles on the road each year. 

New drivers will normally be expected to pay a lot more for their insurance when starting out, this is where building a no claims discount will help you save money in subsequent years. You should also ensure you are safe and responsible on the road and do not incur any penalty points or driving convictions. If you behave recklessly, your premium will skyrocket and you may lose your taxi license.

Having a car alarm, immobiliser and parking your taxi in a safe location when it’s not in use will deter thieves. Insurers like drivers that take security seriously, after all, it is about reducing your level of risk.

All of the above will help you cut costs but to find the cheapest private hire insurance, you’ll want to use an online comparison site. You can compare quotes from multiple leading providers within minutes. This saves you time and money and should be carried out each time your policy is due to be renewed.

We wish you every success in your new journey as a taxi driver. The flexibility will hopefully afford you a new freedom and your earnings will be in line with how many hours you decide to work.

Ryan Kh