Cheap taxi insurance
As an independent insurance agent at Blake Insurance Group, I understand the unique challenges and risks associated with operating a taxi business.
Whether you’re an owner-operator or manage a fleet of taxis, having the right insurance coverage is crucial to protecting your livelihood, drivers, and passengers.
Finding affordable taxi insurance that doesn’t compromise on coverage can be daunting, but it’s essential for ensuring your business runs smoothly and safely.
In this article, we’ll explore the various aspects of taxi insurance, from the types of coverage available to tips on securing the best rates so you can make informed decisions and keep your taxis on the road with confidence.
What is Taxi Insurance?
Taxi insurance is a specialized type of commercial auto insurance designed to provide coverage for vehicles used to transport passengers for a fee, also known as “hire and reward.” Its purpose is to protect taxi drivers, their vehicles, and their businesses from the unique risks associated with operating a taxi service.
The main difference between public hire and private hire taxi insurance lies in how passengers are picked up:
Public Hire Taxi Insurance:
Public hire taxis, hackney carriages, or black cabs are licensed to pick up passengers without prior booking. They can be hailed on the street or hired from designated taxi ranks. Public hire taxi insurance covers this ability to immediately transport passengers who flag down the taxi or are waiting at a rank. It accounts for the increased risk of picking up unknown passengers at random locations.
Private Hire Taxi Insurance:
Private hire taxis, such as those used by Uber or other rideshare services, are only permitted to transport passengers who have pre-booked the ride. Private hire taxi insurance is designed for this pre-arranged transportation model, where the driver knows the passenger’s details and destination in advance. Since private hire taxis cannot legally pick up passengers off the street, they are considered a lower risk compared to public hire taxis.
Both public-hire and private-hire taxi insurance policies typically include hire and reward cover, which allows drivers to legally carry passengers for a fee. However, the specific coverages and premiums may differ based on the level of risk associated with each type of taxi service. Public-hire taxi insurance tends to be more expensive due to the increased exposure to potential incidents and liabilities from random passenger pickups.
Types of Coverage
Auto Liability
Auto liability insurance is a fundamental component of any taxi insurance policy. It is designed to protect you from financial losses if you are at fault in an accident. This coverage is typically divided into two main parts:
– **Bodily Injury Liability**: This part of the policy covers medical expenses, lost wages, and legal fees if you cause an accident that injures another person. It can also cover funeral costs in the event of a fatality. For example, if you are at fault in an accident and the other party requires emergency medical care, bodily injury liability will cover those costs up to the policy limits.
– **Property Damage Liability**: This portion covers repairing or replacing the other party’s vehicle or property you damaged in an accident. For instance, property damage liability will pay for the repairs if you accidentally hit another car or a stationary object like a fence.
Comprehensive Coverage
Comprehensive coverage is essential for protecting your taxi against non-collision-related damages. This type of insurance covers a wide range of incidents, including.
– **Theft**: If your taxi is stolen, comprehensive coverage will help pay for its replacement.
– **Vandalism**: This coverage will pay for repairs if your taxi is vandalized.
– **Weather Events**: Damages caused by natural disasters such as floods, hail, or storms are also covered under comprehensive insurance.
– **Other Incidents**: This can include damage from falling objects, fire, or hitting an animal.
For example, comprehensive coverage will cover the repair costs if a tree falls on your taxi during a storm.
Collision Coverage
Collision coverage is designed to cover the cost of repairing or replacing your taxi if it is damaged in an accident, regardless of who is at fault. This includes:
– **Accidents with Other Vehicles**: If you collide with another car, collision coverage will pay for the repairs to your taxi.
– **Single-Vehicle Accidents**: Collision coverage will cover the damages if you hit a stationary object, such as a guardrail or a pole.
– **Rollovers**: This coverage will pay for the necessary repairs if your taxi rolls over.
For instance, collision coverage will handle the repair costs if you skid on an icy road and hit a mailbox.
Uninsured/Underinsured Motorist Coverage
Uninsured/underinsured motorist coverage is crucial for protecting you against drivers who have no insurance or insufficient insurance to cover the damages they cause. This coverage typically includes:
– **Bodily Injury**: This part of the policy covers medical expenses, lost wages, and other related costs if an uninsured or underinsured driver injures you or your passengers. It can also cover pain and suffering and funeral expenses in the event of a fatality.
– **Property Damage**: This portion covers repairing or replacing your taxi if an uninsured or underinsured driver damages it. It can also cover damages from hit-and-run accidents.
For example, if an uninsured driver hits your taxi and you sustain injuries, uninsured motorist coverage will help pay for your medical bills and lost wages.
Personal Injury Protection (PIP)
Personal Injury Protection (PIP), or “no-fault” insurance, covers medical expenses and lost wages for you and your passengers, regardless of who is at fault in an accident. PIP typically includes:
– **Medical Expenses**: This covers hospital bills, surgical treatments, ambulance services, and other medical costs related to the accident.
– **Lost Wages**: If you or your passengers cannot work due to injuries sustained in the accident, PIP can help recover lost income.
– **Rehabilitation Costs**: This includes physical and occupational therapy needed for recovery.
– **Funeral Expenses**: PIP can cover funeral costs in the unfortunate event of a fatality.
For instance, if you are injured in an accident and cannot work for several weeks, PIP will help cover your medical bills and compensate for your lost wages.
Additional Coverage Options
Public Liability Insurance
Public liability insurance is essential for taxi drivers, protecting against claims from passengers or the public for injuries or property damage. This type of insurance covers a range of scenarios where a taxi driver might be held liable, including:
– **Passenger Injuries**: If a passenger is injured while entering, exiting, or riding in your taxi, public liability insurance can cover medical expenses and legal fees if the passenger files a claim against you. For example, suppose an elderly passenger falls while getting out of your taxi and sustains an injury. In that case, this insurance will help cover the costs associated with their medical treatment and any potential legal action.
– **Property Damage**: This coverage also extends to damage caused to a passenger’s personal property. For instance, if a passenger’s luggage is damaged while loaded into the taxi, public liability insurance can cover the repair or replacement costs.
– **Legal Expenses**: In the event of a lawsuit, public liability insurance can cover the legal costs associated with defending against claims. This includes attorney fees, court costs, and any settlements or judgments that may be awarded.
By having public liability insurance, taxi drivers can operate with peace of mind, knowing they are protected against various risks that come with interacting with the public.
Breakdown Cover
Breakdown cover is crucial for taxis that spend significant time on the road. This type of insurance provides rapid assistance and support in the event of a vehicle failure, ensuring minimal disruption to your business. The benefits of having breakdown cover include:
– **Roadside Assistance**: The most basic level of breakdown cover, roadside assistance, provides help if your taxi breaks down a certain distance from your starting point. A qualified technician will be dispatched to attempt repairs on-site. If the issue cannot be fixed, your taxi may be towed to a nearby garage for further inspection and repairs.
– **National Recovery**: This level of cover ensures that if your taxi breaks down anywhere in the country, your vehicle and passengers can be transported to your chosen destination. This minimizes disruptions to your business and ensures you and your passengers reach your destination safely.
– **Home Start**: Home Start cover offers assistance if your taxi breaks down at or near your home address. This ensures you can start your day without worrying about potential breakdowns at home.
– **Onward Travel**: If your taxi cannot be repaired on-site, onward travel cover provides additional support, such as a replacement vehicle, public transportation reimbursement, or overnight accommodation for you and your passengers. This minimizes downtime and ensures a consistent flow of income for your taxi business.
Having breakdown cover in place gives taxi drivers peace of mind, knowing they have a safety net to protect their business and passengers from unexpected breakdowns.
Accessories Coverage
Accessories coverage is important for installing additional equipment in your taxi, such as GPS, mileage meters, and communication devices. This type of coverage protects you against the loss or damage of these essential tools. Key points include:
– **GPS and Navigation Systems**: These devices are crucial for efficient route planning and navigation. Accessories coverage can help cover the cost of repairing or replacing these systems if they are damaged or stolen.
– **Mileage Meters**: Accurate mileage meters are essential for calculating fares. If your meter is damaged or malfunctions, accessories coverage can cover the repair or replacement costs, ensuring that your business operations are not disrupted.
– **Communication Devices**: Radios and other communication devices are vital for contacting dispatch and coordinating with other drivers. Accessories coverage can protect these devices against damage or theft, ensuring that you remain connected and provide timely service to your passengers.
How Much is Average Taxi Insurance?
The cost of taxi insurance can vary significantly based on several factors, but on average, taxi insurance policies in the United States typically range between $5,000 and $10,000 per year per vehicle. This translates to a monthly cost of approximately $417 to $833.
Factors Influencing Taxi Insurance Costs
**Coverage Level**:
– **Third Party Insurance**: The most basic level covers injury or damage to others but not your own vehicle.
– **Third Party, Fire, and Theft Insurance**: Includes third-party coverage plus protection against fire and theft.
– **Comprehensive Insurance**: The most extensive coverage, protecting against third-party claims, fire, theft, and damage to your own vehicle.
**Location**:
– Insurance costs can vary widely depending on the state and city where the taxi operates. Urban areas with higher traffic congestion and accident rates typically have higher premiums.
**Vehicle Specifics**:
– The taxi’s make, model, year, and size can impact insurance costs. Newer vehicles with advanced safety features may have lower premiums, while older vehicles may be more expensive to insure.
**Driver Factors**:
– The driving records of the taxi drivers, including any history of accidents or violations, play a significant role in determining insurance costs. Drivers with clean records generally enjoy lower premiums.
**Business Operations**:
– The number of miles driven annually, the hours of operation, and the type of taxi service (e.g., airport shuttles, city cabs) can also affect insurance rates. Higher mileage and extended hours of operation typically increase premiums.
Additional Considerations
– **Years in Business**: Established taxi businesses with a proven track record may receive lower rates than new entrants.
– **Type of Taxi Insurance**: Public-hire taxis, which can be hailed on the street, often have higher premiums than private-hire taxis, which only pick up pre-booked passengers.
– **Claims History**: A history of frequent or high-value claims can lead to higher insurance costs.
| State | Estimated Annual Premium | Minimum Insurance Requirements |
|---|---|---|
| Arizona | $5,000 - $10,000 |
$25,000 bodily injury per person $50,000 bodily injury per accident $20,000 property damage |
| Alabama | $2,100 |
$25,000 bodily injury per person $50,000 bodily injury per accident $25,000 property damage |
| Florida | $804 |
$125,000 bodily injury per person $250,000 bodily injury per accident $50,000 property damage |
| Georgia | $2,832 |
$25,000 bodily injury per person $50,000 bodily injury per accident $25,000 property damage |
| New Mexico | $1,764 | $1,000,000 combined single limit for bodily injury and property damage |
| New York | $10,000+ | Varies significantly, generally higher due to urban density and traffic |
| North Carolina | $1,764 |
$30,000 bodily injury per person $60,000 bodily injury per accident $25,000 property damage |
| Oklahoma | $5,000 - $10,000 | Similar to other states with moderate traffic density, specific requirements not provided |
| Texas | $5,000 - $10,000 | Varies, generally higher in urban areas like Houston and Dallas |
| Virginia | $1,764 |
$25,000 bodily injury per person $50,000 bodily injury per accident $20,000 property damage |
Tips for Reducing Taxi Insurance Costs
– **Shop Around**: Compare quotes from multiple insurance providers to find the best rates.
– **Increase Deductibles**: Opting for a higher deductible can lower your premium, but be sure you can afford the out-of-pocket cost in case of a claim.
– **Utilize Discounts**: Look for discounts for safe driving, bundling policies, or paying the annual premium in one lump sum.
– **Implement Safety Measures**: Installing security features like alarms, immobilizers, and in-car CCTV can reduce premiums.
Taxi Insurance Companies Comparison
| Insurance Company | Coverage Options | Estimated Monthly Cost (Comprehensive Coverage) | Overall Customer Satisfaction (Stars) |
|---|---|---|---|
| Nationwide | Competitive rates, discounts, comprehensive coverage options | $350 - $800 | 4.7 |
| Farmers Insurance | Affordable, range of coverage options for taxi operators | $400 - $850 | 4.5 |
| Progressive | For-hire livery coverage, protection for drivers, vehicles, passengers | $300 - $900 | 4.4 |
| Acuity | Specialized commercial vehicle coverage, including taxis | $375 - $825 | 4.6 |
| Auto-Owners | Policies catering to specific taxi business needs | $350 - $800 | 4.3 |
| Axis | Commercial auto insurance solutions for taxi services | $325 - $850 | 4.2 |
| Federated Insurance | Comprehensive commercial auto insurance for taxi operators | $375 - $850 | 4.3 |
| The Hartford | Wide range of commercial auto policies, specialized taxi coverage | $400 - $875 | 4.4 |
| Sentry | Commercial auto insurance for unique taxi business requirements | $350 - $850 | 4.1 |
| AmTrust Financial Services | Commercial auto insurance policies suitable for taxi operators | $325 - $825 | 4.0 |
Frequently Asked Questions (FAQs) About Taxi Insurance
What is taxi insurance?
Taxi insurance is a type of commercial auto insurance specifically designed to cover vehicles used for hire, such as taxis, ride-sharing vehicles, and limousines. It provides coverage for both the driver and passengers and often includes liability, collision, comprehensive, and medical payments coverage.
Why do I need taxi insurance?
Taxi insurance is required by law for any vehicle used for hire to ensure that both drivers and passengers are protected in the event of an accident. Standard personal auto insurance policies do not cover commercial use, so specialized taxi insurance is necessary.
What does taxi insurance cover?
Taxi insurance typically covers:
- Liability: Protects against claims for bodily injury and property damage caused by the taxi.
- Collision: Covers damage to the taxi resulting from a collision with another vehicle or object.
- Comprehensive: Covers damage to the taxi from non-collision events, such as theft, vandalism, or natural disasters.
- Medical Payments: Covers medical expenses for the driver and passengers in the event of an accident.
- Uninsured/Underinsured Motorist: This policy provides coverage if the taxi is involved in an accident with a driver who has insufficient or no insurance.
How much does taxi insurance cost?
The cost of taxi insurance varies based on factors such as location, vehicle type, coverage limits, and driver history. On average, it can range from $300 to $900 per month for comprehensive coverage. Specific premiums will depend on the individual circumstances of the taxi operator.
How can I lower my taxi insurance premiums?
You can lower your taxi insurance premiums by:
- Maintaining a clean driving record: Avoiding traffic violations and accidents.
- Choosing higher deductibles: Higher deductibles can lower your monthly premium but require more out-of-pocket expenses in the event of a claim.
- Bundling policies: Combining multiple insurance policies (e.g., commercial auto and general liability) with the same insurer.
- Taking advantage of discounts: Many insurers offer discounts for factors such as defensive driving courses, vehicle safety features, and fleet policies.
Are there different types of taxi insurance policies?
Yes, there are different types of taxi insurance policies, including:
- Public Hire Insurance: For taxis that can be hailed on the street or at taxi stands (e.g., yellow cabs in urban areas).
- Private Hire Insurance: For taxis that customers must pre-book (e.g., ride-sharing vehicles and limousines).
- Fleet Insurance: For taxi companies with multiple vehicles, offering coverage for the entire fleet under one policy.
What happens if I don't have taxi insurance?
Operating a taxi without proper insurance is illegal and can result in severe penalties, including fines, license suspension, and vehicle impoundment. Additionally, without insurance, you would be personally liable for any damages or injuries resulting from an accident.
How do I choose the right taxi insurance provider?
When choosing a taxi insurance provider, consider factors such as:
- Reputation: Look for providers with good reviews and a strong track record in the industry.
- Coverage Options: Ensure the provider offers the coverage you need for your specific taxi operations.
- Customer Service: Choose a provider known for excellent customer service and ease of claims processing.
- Price: Compare quotes from multiple providers to find the best value for your coverage needs.
Can I add additional drivers to my taxi insurance policy?
Yes, most taxi insurance policies allow you to add multiple drivers. It's important to list all potential drivers on the policy to ensure coverage in the event of an accident. Be sure to provide accurate information about each driver's history and driving record.
What should I do in the event of an accident?
In the event of an accident:
- Ensure safety: Check for injuries and move to a safe location if possible.
- Call emergency services: Report the accident to the police and request medical assistance if needed.
- Document the accident: Take photos, exchange information with other parties involved, and collect witness statements.
- Notify your insurance provider: Report the accident to your taxi insurance provider as soon as possible to begin the claims process.
Blake Insurance Group
Phone: (888) 387-3687
Email: info@blakeinsurancegroup.com
Hours: Mon-Fri 9:00 am to 5:00 pm
Sat-Sun: Closed
Blake Nwosu
Owner & Principal Agent