If you drive a taxi, you might think you have enough issues to contend with already, ranging from endless traffic jams to unruly passengers. But one further gripe you could have is the fact you have to pay more for your taxi insurance than you would for a conventional motor insurance policy.
The difference in price may not seem fair, but there are reasons for this.
Crucially, the fact you drive more miles than the average motorist means there is an increased statistical risk of an accident happening - and this is reflected in the price you pay.
Drivers can use the service to compare policies from several different schemes to find the one that is best-suited to their particular needs.
Why exactly is taxi insurance so costly?
Private hire taxi insurance is more expensive than conventional cover because taxi drivers complete more miles than other motorists, and often do so in congested conditions.
In addition, taxi drivers tend to make these journeys in vehicles that are large enough to fit a greater number of passengers.
As a result, taxis are usually bigger than conventional cars - meaning these vehicles often fall into a higher car insurance group.
The insurance category that a car falls into can have a big impact on cost, as the higher the category, the more expensive the premium. This is why taxi drivers can find they pay a premium for their cover compared to standard motorists.
Motor insurance is a legal requirement
Under the new Continuous Insurance Enforcement (CIE) regulations, introduced in June 2011, all vehicles on the road must now be insured at all times.
The rules were brought in to help tackle the number of uninsured drivers, meaning there is no longer any way of getting away without having cover, as those who fail to comply are breaking the law.
The only way you can now keep any vehicle without cover is if it has been registered as being off the road with the DVLA. This is known as SORN (Statutory Off Road Notification).
The upshot of all this is that even if you only work as a taxi driver from time to time, it is still a legal requirement for you to have cover. If not, you are committing an offence, and could potentially face a hefty fine.
Types of taxi insurance policy
When it comes to private hire taxi insurance, there are three main types of policy. The first is “policy only”, the second is “named driver”, and the third is “any driver over set age”.
Generally speaking, “policy-only” is the cheapest form of cover, as it is the most basic type of cover. Crucially, the more names that are added to the policy, the more expensive it gets.
“Named driver” cover is the “middle” type of cover and involves a taxi driver buying taxi insurance just for them - and not for anyone else.
The most expensive type of cover is an “any driver” policy, as this means that any motorist is covered to drive your taxi. Given that more names can be added, the price of the policy can get increasingly costly.
How to find cheap taxi insurance quotes
If you're looking to benefit from cheaper premiums, there are several steps you can take to reduce the cost of cover.
Choose a car in one of the lower car insurance groups - when picking your vehicle, it's worth choosing one which falls into a low insurance group.
In total there are 50 groups, with cars in the highest group attracting the most expensive insurance premiums. The group a car is assigned to is decided upon by the Group Rating Panel which is made up of representatives of the insurance industry, and includes members of the Association of British Insurers (ABI) and Lloyd's Market Association.
Cars are placed into groups based on factors such as repairs, safety features, the cost of spare parts, and the value of the vehicle. As a result, those in the highest group tend to be high-performance models. By contrast, those in the lowest groups cost the least to cover.
To find out which group your set of wheels has been assigned to, visit Thatcham.org
Of course, when choosing a car as a taxi driver, you can't base your decision on the insurance group alone, as you also need to pay attention to fuel consumption figures given the nature of your job. The key is to take all these factors into consideration when making your decision over which car to buy.
Drive safely to avoid convictions - as a taxi driver, you should always aim to abide by the rules of the road, as having convictions can have a big impact on premiums - just as it can for any motorist.
In fact, you could find that even if you've only got committed a minor criminal offence which has no bearing on your driving, some insurers will refuse to offer cover. This is because anyone who has a criminal conviction is statistically more likely to be involved in an accident.
To avoid this happening, the simple advice is to stay within the law. This applies to some of the most basic rules, such as sticking to the speed limit, as points on your licence will soon bump up the cost of your premium.
Build up a clean record - one of the best ways to reduce your taxi insurance premium is by driving safely and responsibly, and thereby building up a no-claims discount over several years.
Many insurers offer significant discounts to drivers who remain claim-free, with those who stay claim-free for a year getting a reduction of 20% to 30%, and those who don't claim for five consecutive years getting discounts of up to 75%.
You could even consider paying a little extra to protect any no-claims bonus you have built up. This means you won't lose your discount after making a single claim - or even more than one claim - in a 12-month period.
In addition, insurance firms will also make cheaper premiums available to those drivers who have had their taxi badge for a long period. The key here is building up your years of safe driving behind the wheel of your cab as you can then go on to reap the rewards a little further down the line.
What other considerations are there?
As well as spending time searching for the right taxi insurance policy for you and your needs, you may also want to think about purchasing taxi breakdown cover, given your relatively high mileage.
This will mean you don't have to worry about finding a recovery and repair service if your car breaks down, whether or on a job, driving between jobs or simply when driving to or from work.
Your taxi insurance will have unlimited passenger liability cover built-in, to ensure everyone is protected if you're involved in an accident. You may also want to consider public liability insurance, which protects you and your business against any claims for injury or accidental damage caused as a result of your negligence.
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