Taxi insurance (private hire / public hire)

A straightforward guide to taxi insurance in the UK

Taxi insurance protects drivers who carry passengers for hire and reward. It is required by law for both private hire vehicles and public hire taxis, covering the risks that come with carrying paying passengers. If you drive for an operator or pick up street hails, the right policy helps safeguard you, your passengers, and your business income when something goes wrong.

In 2025, costs remain a major concern. Private hire drivers with clean records pay around £1,454 per year on average, or near £158 for a 30-day policy. Public hire premiums are typically higher, often between £2,500 and £4,500 per year, with London drivers usually at the top end. Premiums have been pushed up by inflation, a rise in claims, and higher repair bills, especially for electric vehicles which cost more to repair and take longer off the road.

This guide explains what taxi insurance covers, what it does not, how claims work, and how to select a level of cover that fits your work pattern and risk. We will also look at eligibility, common reasons for declines, and how to avoid paying for features you do not need.

Insurance can offer real financial protection, but only when you understand what is covered - and where the gaps are.

You will find practical steps to compare quotes, manage excesses, and consider usage-based policies that align premiums with mileage and driving behaviour. The aim is simple: clear, balanced information so you can choose safe, legal cover without surprises.

What is covered in practice - and how claims work

Taxi insurance starts with motor cover suitable for hire and reward. Comprehensive policies typically include damage to your vehicle, third-party liability for injury or property damage, fire and theft, and legal liabilities when carrying passengers. Many policies add public liability for passenger injury outside standard motor liability, which is useful if a passenger slips while getting in, or their property is damaged.

Not everything is included. Wear and tear, routine maintenance, and mechanical failure are not covered. Using the vehicle outside your licence conditions, carrying more passengers than allowed, or working when not correctly licensed can invalidate cover. If you operate in a higher-risk area than declared or use the vehicle for business types not disclosed, you could face a declined claim.

Claims usually start with a call or online notification as soon as it is safe to do so. You will need details of the incident, driver licence information, passenger accounts where relevant, and any dashcam footage. Insurers may offer approved repairers and courtesy car options based on your policy. For example, if you collide with another vehicle while on a pre-booked job, comprehensive cover can handle your repair costs and third-party damage, subject to excess and limits. If your taxi is stolen overnight, fire and theft or comprehensive cover can respond, but only if your security requirements were met.

Being honest at application and renewal is vital. Misstatements can reduce or void payouts. Understand the excess you must pay and any limits on vehicle downtime, courtesy cars, or loss of earnings.

Who benefits most from taxi cover

This insurance is essential for licensed private hire drivers who take pre-booked journeys through operators or apps, and for public hire drivers who can accept street hails. It also suits fleet owners managing multiple vehicles and drivers, where combined policies and central claims handling can be more efficient. Short-term or 30-day policies can help new entrants, part-time drivers, or those covering seasonal peaks while they build no-claims discounts.

It may be less suitable if you do not carry paying passengers or only use the vehicle for personal journeys. In that case, standard car insurance is more appropriate. If you operate exclusively for deliveries without passengers, you will need commercial or courier cover rather than taxi insurance. The right policy matches your licensing, your operating area, and how often you are on the road.

Choosing levels of cover and useful add-ons

1. Third party only

   • The legal minimum for road use, covering injury or property damage you cause to others. Does not cover your own vehicle. Suitable for very tight budgets, but riskier if you rely on the car for income.

2. Third party, fire and theft

   • Adds cover if your taxi is stolen or damaged by fire. Still no protection for accidental damage to your vehicle. A mid-step for older vehicles with lower replacement values.

3. Comprehensive

   • Includes accidental damage to your vehicle plus third-party liabilities, fire, and theft. Often required by finance providers and preferred by drivers who cannot afford downtime or large repair bills.

4. Public liability add-on

   • Covers claims for passenger injury or property damage outside motor liability. Helpful for incidents during boarding or alighting where responsibility is disputed.

5. Legal expenses and uninsured loss recovery

   • Helps with legal costs to pursue recovery of losses like excess, lost earnings, and out-of-pocket costs after a non-fault incident.

6. Breakdown, courtesy vehicle, and loss of earnings

   • Taxi-specific breakdown, guaranteed hire vehicle, and set daily payments for downtime can protect revenue. Check vehicle class and availability times.

7. Short-term and usage-based policies

   • 30-day cover helps new or part-time drivers. Telematics links pricing to mileage and driving style, which can lower costs for careful drivers with predictable shifts.

8. Fleet policies

   • For operators with multiple vehicles, offering central administration and potentially lower per-vehicle rates. Useful for standardising cover levels and excesses.

Prices in 2025 - what shapes your premium

Prices are indicative only. Actual quotes vary by insurer, licensing authority rules, vehicle, and operational profile.

Can you apply - and what insurers check

Most insurers require a valid UK driving licence, the correct taxi licence for your authority, and a vehicle that meets age and safety standards. You will usually need to confirm no outstanding vehicle defects, declare any modifications, and provide details of your operating area, typical mileage, and whether you are private hire or public hire.

Expect to provide proof of no-claims discount, operator details where relevant, and past claims or convictions for the last 3 to 5 years. Common reasons for decline include undeclared incidents, incorrect licence type, vehicle age outside limits, or a history of serious motoring offences. Some insurers have minimum age or experience thresholds. Being accurate and complete at quote stage helps avoid issues at claims time.

The process from quote to claim

1. Gather documents and licence details, including taxi badge and operator info.
2. Enter accurate mileage, vehicle use, and operating area for a tailored quote.
3. Compare cover levels, excesses, and key exclusions side by side.
4. Choose add-ons you genuinely need, avoiding unnecessary extras.
5. Pay and receive policy documents, certificate, and insurance disc if required.
6. Keep records updated and report any changes to your insurer promptly.
7. If an incident occurs, report quickly and follow the claims guidance provided.

Balanced view - benefits and drawbacks

Stay realistic: the right cover manages risk, but it cannot remove it.

Before you commit - checks that prevent surprises

Read the schedule and policy wording carefully, noting excesses for own-vehicle damage, windscreen, and theft. Confirm passenger capacity, working hours, and geographic limits. Check exclusions for vehicle age, modifications, or using the car outside licence conditions. Review courtesy vehicle terms, loss of earnings limits, and any waiting periods. Understand renewal pricing and whether introductory discounts apply only in year one. Keep proof of your taxi licence, operator agreement, and no-claims discount ready, as delays in documentation can affect cover validity.

Related covers worth considering

1. Public liability insurance for drivers who regularly assist passengers with luggage or mobility support.
2. Motor legal protection to pursue uninsured loss recovery after non-fault incidents.
3. Income protection or short-term sickness cover if downtime would affect household finances.
4. Gap insurance for financed vehicles at risk of total loss valuation shortfalls.
5. Breakdown cover with taxi-compatible recovery and onward travel.

Frequently asked questions

Q: What is the difference between private hire and public hire insurance? A: Private hire covers pre-booked journeys via an operator or app. Public hire covers taxis that can be hailed on the street. Public hire premiums are usually higher due to increased exposure and regulations.

Q: How much does taxi insurance cost in 2025? A: Private hire averages around £1,454 annually, with 30-day policies about £158. Public hire typically ranges from £2,500 to £4,500 or more. Actual prices vary by driver, vehicle, and location.

Q: Why are premiums rising for taxi drivers? A: Inflation, higher claim costs, and more expensive repairs have increased premiums. Electric vehicles cost more to repair and spend longer off the road, which adds to insurer costs.

Q: Can telematics help reduce my premium? A: Yes. Usage-based policies link cost to mileage and driving habits. Careful, lower-mileage drivers often benefit, but savings are not guaranteed and depend on your driving and insurer criteria.

Q: Do I need public liability as well as motor cover? A: Motor insurance handles road traffic liabilities. Public liability can cover incidents while boarding or exiting, or property damage not captured by motor liability. It is often recommended but may be optional.

Q: Will I get a taxi as a courtesy vehicle? A: Not always. Some policies provide a taxi-plated courtesy car, but availability varies. Check vehicle class, time limits, and booking conditions before you buy.

What to do next

Compare quotes from multiple specialist providers using the same details for each. Decide on a realistic excess, consider usage-based options, and only add extras you will use. Take your time to read policy documents so you understand cover limits, claim processes, and any licensing requirements. You stay in control of the final decision.

Important note

This guide is general information, not personal financial advice. Insurer terms, limits, and eligibility vary. Always read your policy wording and schedule, and check details with your licensing authority before you buy.