Published On: Sun, Dec 9th, 2018

What Determines the Costs of Taxi Insurance?

Taxi insurance can be expensive; if you operate a fleet of taxis then you can bring down the costs by applying for fleet insurance.  What is taxi insurance and just what determines the costs of taxi insurance are many factors that most other motorists also have to contend with? The most important number is 25. For drivers over this age, their insurance rates will drop.

euro money photo

photo/Luis Javier Modino Martinez

What are the other factors in determining the cost of a premium?

The following factors are figured into how an insurance company determines just how much a taxi driver will pay on their premium.

  • How long has the operator held a driver’s license?
  • Is the operator part of a fleet or an independent taxi?
  • What is the exact type of vehicle being used to ferry passengers around in?
  • The driving record of the operator and if any points are assessed against it from traffic tickets or accidents.
  • The type of passengers being ferried. Are they school age children or the public in general?
  • Is the taxi service being offered in the day time or on the night shift?
  • Is the vehicle used 24/7 or is it stored when not in use? The place of the storage is important.

Does a standard vehicle insurance policy with ‘business use’ be covered for use as a taxi or Uber?

A standard motor vehicle insurance policy does not cover the vehicle or the driver when passengers are being transported in exchange for money. The vehicle must be covered with a ‘hire and reward’ policy. The types of professions that must carry this type of insurance policy include the following;

  • Taxi drivers
  • Ride share drivers including Uber drivers
  • Chauffeurs
  • Courier drivers for packages and or food items

Is there more than one type of ‘hire and reward’ insurance policies?

Yes there are two distinctive types. There is the private hire and reward policies and the public hire and reward policies.

Private hire and reward policies are for drivers that have pre-managed bookings for whom they transport. This includes food delivery and package couriers, Uber drivers and chauffeurs.

The public hire and reward policies are for operators of taxi cabs and hackney carriages. These are the only operators that can be hailed by any person on the side of the road for the purpose of giving them a ride.

Does my driving record and discounts from private use carry over to the Hire for Reward policy?

What might surprise many new taxi drivers is the sticker shock of how high their insurance premium is. All new taxi driver start off with a clean slate that is in reference to the no claim bonuses many drivers have on their private vehicles. This does not carry forward to the Hire for Reward policy.

The points accumulated on a driver’s license however do get carried over.

New taxi drivers are viewed as high risk so the premiums are higher at first. In time and with a history of no accident, claims or tickets, the taxi driver’s premiums will drop.


The best way to keep your premiums as low as possible is to have no points on your driving record and make no claims. It is also vital to be over the age of 25 and pay your premium annually.

To help you in knowing what determines the costs of taxi insurance and how to keep them at a minimum, an insurance broker should be consulted. They know this business sector like the back of their hand. They will locate the right policy for you at a cost you can afford.

Author: Eamonn Turley

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