Becoming a Taxi Driver: Using Your Own Vehicle & Is It Necessary to Get Taxi Insurance?

If you’re thinking about becoming a taxi driver it’s important to consider all the variables involved. First and foremost, you’d need to understand what rules and regulations you’re going to have to comply when you’re driving a taxicab, both in terms of licensing and insurance.

What is Considered a ‘Taxi’ in the UK?

A taxi is a vehicle designated for ‘hire and reward’, meaning it can be used to take passengers and their belongings from one place to another, usually by prior arrangement.

It’s critical to be aware that when ferrying passengers around as part of a commercial ‘hire and reward’ journey the vehicle is being used as a taxi even if it doesn’t have signage for that purpose. Whilst it’s true that the same vehicle might be utilised for personal journeys too, it is a taxi nonetheless.

In practice that means a regular car insurance policy simply won’t meet your needs – in fact, if you tried to claim on your regular insurance not only would the claim be rejected but your insurance policy could be invalidated too.

That’s why you’ll need to invest in a taxi insurance policy if you plan to use your own vehicle for commercial ‘hire and reward’ journeys.

Does It Matter If the Vehicle Is Not a Taxi All Day?

The short answer to this question is, no. When the vehicle is being used as a taxi for commercial purposes you’ll need to take out a suitable taxi insurance policy, even if you’re using it for personal travel part of the time.

However, it’s worth bearing in mind that many taxi insurance policies do include a ‘personal use’ component, which would mean one policy would insure you for both commercial and personal use.

Should You Go Direct to an Insurer or Use a Broker?

Whilst it’s certainly possible to find local taxi insurance companies, there’s fewer of them when compared to the multitude of car insurers competing in the marketplace today. This is because it’s a specialist form of coverage that applies to either self-employed people or a limited company.

Given the difficulties in finding a good taxi insurer at a suitable price, it’s best to use a price comparison service like that has existing relationships with relevant insurers. Depending on the specific features, inclusions and exclusions that are required, they’ll source a suitable policy and insurer to provide coverage wherever possible.

Why is Taxi Insurance Pricier Than Car Insurance?

When you think about vehicle usage patterns for the average car owner, they drive to work and return later in the day; or complete the school run twice a day with the kids. They may run the occasional errand at night, but there’s little evening use. On the weekends, they may move around on small journeys to get things done. Sometimes, there’s a weekend trip away on a longer journey but these aren’t that frequent.

By contrast, common journeys for a taxi involve driving through heavily urbanised areas. These are often quite congested streets with many other cars, motorcyclists, HGVs, and bicycle riders along with countless pedestrians milling about too. Spending more time in urban areas, particularly during peak traffic hours, increases the likelihood of accidents for a taxi driver, which usually translates into higher premiums.

Most taxi drivers also spent much more time on the roads and clock up many more miles than a car driver, which again increases the risk of an accident occurring.

Do Younger Drivers Have Any Difficulties Getting Taxi Insurance?

Younger drivers almost always pay more for vehicle insurance. This is because they tend to have more accidents due to inexperience on the roads. Combine this with the added risk with urban driving, and the risks to insurers becomes even greater.

Because of the added risks, finding taxi insurance as someone who is 25 or younger can be tough. Most certainly, using an insurance comparison site makes sense here to find the select insurers who might offer a suitable policy at a reasonable price.

Being a taxi driver in the UK is a worthwhile job if you enjoy driving all day. If traffic jams and the occasional idiotic behaviour from other drivers on the road don’t upset you, then you probably have the right disposition for it. Just make sure you’re a brilliant navigator to fit more journeys into a shift to maximise your earning potential.

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