Taxi insurance is more expensive than your typical private car policy for several reasons. The main reason is that insurers perceive taxi drivers to have an increased risk of accidents. Cheap taxi insurance can be difficult to find especially when you want thorough cover that reduces your chances of expensive pay-outs.
Most taxi drivers will work unsociable hours as this is typically when they are in the highest demand. This means working in the dark, late at night and when they may be less alert, especially after long shifts. These factors can increase the chance of accidents as tiredness and restricted vision can lead to this.
Taxi services are also mostly in demand in city centres or inner city areas. These pose increased traffic, difficulties with access and more pedestrians. Again this could suggest an increased risk of accidents in comparison with driving in more rural areas. This is why many insurers will put restrictions on driving in busy city areas or charge more for doing so.
Taxi drivers cover more miles than the typical policy would insure for as their occupation involves covering many miles. The more miles driven means the greater the opportunity for an accident and the bigger the toll on the vehicle. Taxi insurance policies will have a larger mileage then a private policy, which means a more expensive premium. It is important to be honest about the mileage you will be covering to ensure your insurance claims are not refused in the instance of an accident. This also enables you to not worry about the distance you are covering and maximise your business profits without restrictions.
Finally, working with the public implies its own risks. The public can be unpredictable and many taxi drivers will taxi those under the influence of alcohol. This could increase the chance of distraction whilst driving or damage to the vehicle. Working with the public, especially for public hire taxis that do not have customer details could mean more claims on their own policies.
Although taxi insurance can be a big expense to a single driver with their own taxi business, there are specialist insurers that can offer you the most competitive prices so it does not have to cost the earth. There are also several ways you yourself can help keep the price down which we will discuss later.