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What's in this guide?
Do I need taxi insurance?
Yes. While minimum requirements vary by state, you’ll generally need to have livery insurance with liability coverage. And because you drive people in your car, you’ll need liability coverage that extends to your passengers and covers medical payments if you’re hit by an uninsured or underinsured motorist.
Taxi insurance can be expensive, but it’s also necessary. The right policy can protect you and your passengers in the event of an accident, and some policies will also cover you against breakdowns, damage to your car and legal matters.
What’s considered a taxi?
A taxi is generally defined as a car that drives passengers and has unscheduled pickup points. For example, while you’d book a limo in advance, a taxi can be hailed off the street when you need a ride.
If you need to insure a limousine or black car service that offers scheduled rides, you’ll want to look into livery insurance policies. Most providers that insure taxis will also insure black car services, so if you’re not sure what type of policy you need, you can talk to an insurance agent for more information.
How much does taxi insurance cost?
Most drivers pay around $5,000 to $10,000 per year. But the exact cost of your insurance will depend on where you live, how much coverage you have and your driving record.
Is taxi insurance more expensive than car insurance?
Yes, taxi insurance is generally more expensive than regular car insurance. There are a number of reasons for this, including:
- Taxi drivers spend more time on the road than normal drivers, and therefore statistically have a higher risk of an accident.
- You’re likely to be driving in congested areas, which also increases the chance that you may be involved in an accident.
- Regularly carrying passengers can also mean you’re at a higher risk of personal injury claims in the event your passengers are injured.
What coverage can I get for my cab?
Like regular car insurance, there are three main types of coverage you can get for your taxi. Depending on the laws in your area, some of these may be legally required for taxis.
- Liability. This covers damage or injury you cause to others in an accident, and is legally required.
- Collision. This covers damage to your taxi after a collision.
- Comprehensive. This covers damage to your taxi not caused by a collision, like storm damage, fire damage and theft.
- Uninsured or underinsured motorist. This pays for damages and injuries after an accident where an uninsured or underinsured driver was at fault.
- Medical payments. This covers medical bills for you and your passengers if you’re hit by an uninsured or underinsured driver.
- Accessories. This can cover damage to accessories in your cab, like your mileage meter, communication equipment and GPS device.
What exclusions should I know about?
You generally won’t be covered if:
- You’re under 25. Many insurers refuse to cover drivers under a certain age.
- You misuse the vehicle. Any unauthorized or inappropriate use of your taxi will generally result in your claim being refused.
- You use the vehicle outside of an insured area. Many insurance policies will only cover your driving for a certain area or location. If you use your taxi outside of this area, you will likely not be covered in the event of an accident.
How to save on taxi insurance
There are a number of things you can do to reduce the cost of your taxi insurance.
- Pay your insurance premium annually. Paying your insurance in one lump sum, instead of monthly installments, can help you save on yearly costs.
- Secure and protect your taxi. You can reduce your insurance premium by keeping your taxi in a secure location when not in use and installing security features like an alarm and dash cam.
- Always compare your options. Before committing to a specific policy, shop around to see if you could save money elsewhere. If you already have insurance, compare other options before renewing your existing policy.
- Don’t make a claim unless absolutely necessary. If you’ve gone several years without filing a claim, you may be eligible for a steep discount.
- Increase your deductible. Choosing a higher deductible will generally reduce the cost of your insurance premium. But make sure you can afford to pay the higher deductible amount if you file a claim.
Commercial car insurance providers
Bottom line
Long hours with rotating passengers increase the chance of getting in an accident — and drives up your insurance costs. But you can save on your premiums by comparing insurance companies to find the best deal.
Frequently asked questions about taxi insurance
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