9 things that affect the cost of taxi insurance

You will be able to keep more of your hard-earned cash if you keep your regular expenses such as taxi insurance to a minimum.
But what factors affect the prices for taxi insurance? There are nine major considerations:

What you drive

Insuring a Lamborghini costs more than insuring a Ford Fiesta, and the same is true of taxis.

Essentially the type of cab you drive plays a big part in understanding how risky you are in terms of making a claim. For example, a taxi’s bigger, more powerful engine means that the insurance cost is likely to be higher, and similar is true if your minicab has a poor safety rating or is a typical target of thieves.

No claims bonus

No claims bonuses are offered by insurance companies because they want to reward safe drivers. Generally, larger discounts on your insurance is available if you don’t make a claim for several years. It might be worth spending a little more on no claims bonus protection, so that making one claim every few years won’t have a negative impact. Insurers offer this kind of add-on to your cover when they sell the policy.

Coverage type

If you’re considering taxi insurance, you should be careful about the level of coverage you need. Legally, you must carry a minimum of third party, fire and theft coverage, but because your vehicle is your livelihood, you should also look into getting a comprehensive insurance policy plus options like personal accident insurance, public liability and income replacement.

Taxi ranks and private hire cars also have different insurance policies, and therefore, costs.

Mileage per year

It is not uncommon for taxi drivers to spend long periods of time on the road, especially during high traffic times. As a result, the cost of taxi insurance is determined by these difficult driving conditions and will generally cost more, the more you drive each year – the more road covered, the greater the risk of claim to the insurer.

Your driving experience

Obviously, insurance companies are aware of the importance of driving experience. Young drivers who have just come on the road don’t have the experience of long-time taxi drivers who have developed their skills and understanding over time. As a result, insurance is often the most expensive for young inexperienced drivers or those just starting to become a taxi driver.

Penalty points on your licence

Insurers view being caught breaking the law as a major red flag of risk-taking. As a result, your premiums will rise if you get points on your licence – you might even be refused from getting a policy if convicted of any offence.

Maintaining a safe driving record while on the road is not only a great way to boost your reputation, but it will also save you money on your insurance premiums.

When you drive

Working at night may mean more expensive insurance, especially on Fridays and Saturdays when the streets are busier and drunk customers are more likely to present a risk. Driving during the day is often cheaper to insure, although transporting children, the elderly, or people with serious illnesses might cost a little more.


Typically, you will reduce your premiums by installing security measures like CCTV, immobilisers, and alarms. You can also save money by storing your vehicle in a locked garage in a low-risk neighborhood, instead of on-street parking in a suspicious area.

Councils and penalty points

You can lose your taxi license even if you are not disqualified from driving, as the councils set their own rules about penalty points and when a taxi drivers’ licence will be revoked.

Make sure you know the cut-off point according to the rules in your area.

Taxi drivers may also be subject to a penalty point system specific to the city/region. You may suffer penalties if, for instance, you do not display a fixed penalty notice or if you failed to maintain a spare tyre. In some cases, you may have to take training, or you may even lose your license and face prosecution if you accumulate too many penalty points. Check your local rules so you know what to expect.

How do I reduce my policy costs?

You may be feeling the pinch on your business’s viability when your taxi insurance premiums are just too high. What should you do?

Begin by shopping around. Similar when pricing standard car insurance – Insurance companies vary widely, so you may receive a better quote from another provider – but make sure you check the level of coverage provided carefully to ensure you are covered for everything you need.

Consider changing your vehicle, your shift pattern, or improving your security.

It’s not always good to take the cheapest route over the long haul. Having an insurer that is professional and efficient to deal with makes a huge difference when you require assistance.

Increasing your excess can reduce your premiums. This is the amount you must pay before a claim would be covered by your insurer.
You’ll pay a lower premium if you have a higher excess – but you must be prepared to pay the excess if you have to file a claim. Excess should be something you can comfortably pay, otherwise you might find yourself unable to drive again, which could hurt your business.

Payment plans can also be arranged with your insurer – to spread the cost over the year rather than finding a big chunk of cash in one go if cashflow is a concern.