Taxi insurance

Taxi insurance is specifically designed to cover the higher risks involved in carrying passengers for hire and reward, whereas personal car insurance only covers private use and does not legally allow you to operate as a taxi driver.

Specialist taxi insurance policies take into account the additional risks of driving a taxi, including transporting paying passengers and typically covering much higher annual mileage. Because taxi drivers spend more time on the road and carry members of the public, insurers assess the risk differently and tailor cover accordingly.

If you drive a taxi with a standard personal car insurance policy, you’ll be breaking the law and could invalidate your insurance. Similarly, standard business car insurance does not cover carrying passengers for hire and reward, so it won’t provide the protection you need to operate legally as a taxi driver.

Taxi insurance covers the specific vehicle named on your policy, such as black cabs, private hire vehicles (PHVs), minicabs, ride-hailing cars, saloons or MPVs used for hire and reward.

You’re usually only insured to drive that named vehicle, and if you have another car for personal use, you’ll need a separate policy. Most taxi insurance also allows social, domestic and pleasure use, but local council rules may vary.

To get a taxi licence in the UK, you’ll usually need a full GB or NI driving licence (or sometimes a full EU licence) held for at least 12 months, the right to work in the UK, and approval from your local licensing authority.

You’ll also have to pass background checks and, in many areas, an enhanced criminal record check from the Disclosure and Barring Service (DBS). 

You may also need to pass:

• A medical exam

• An additional driving test

• A ‘knowledge’ test

• An English test.

To find out what you need to do to get your taxi licence and the costs involved, speak to your local council. Or if you want to drive in London, contact Transport for London.

If you work as a taxi or PHV driver without a taxi or PHV driver licence, you could be prosecuted.

Only drivers with a valid taxi licence who are named on your policy can drive your insured taxi, as long as they meet your insurance provider’s criteria. 

You may have to pay extra to add an additional driver to your policy. Depending on their experience and driving history, this could raise or lower your premiums.

You’ll also need to make sure that as the main driver on the policy, you’re the one who does most of the driving. Otherwise, you could be guilty of fronting.

Under UK legislation, local authorities in England and Wales won’t allow drivers without a taxi badge to drive a vehicle licensed for private hire.

Taxi insurance is usually more expensive than standard car insurance because taxi drivers typically clock up more miles, work in built-up areas, carry passengers, and usually drive in heavy traffic or at unsociable hours.  

These factors increase your risk of being involved in an accident, and that results in higher premiums.

When buying taxi insurance, you should consider whether you need extra add-ons such as breakdown cover, windscreen cover, legal expenses cover or a replacement vehicle option.  

These can give you useful protection, such as help if your taxi breaks down, cover for windscreen repairs, support with legal costs, or access to a licensed replacement taxi while yours is being repaired. 

A taxi can be used for personal use as long as your insurance policy and your local authority permit it. Other members of your household probably won’t be covered, unless they’re also registered as a taxi driver.

The terms of your taxi licence will vary, depending on the licensing authority that issued it. Check to make sure your council allows you to use your registered taxi for domestic use.

And always check your taxi insurance policy details to make sure you’re covered.

You’ll usually need at least two taxis to qualify for fleet insurance, although some providers may require you to have three or even five. 

Please note that you can’t currently compare multi-vehicle policies with Compare the Market.