Taxi drivers hear all sorts of stories about savings and pitfalls when purchasing Taxi Insurance and there’s varying degrees of truth behind them.
As with anyone who earns their living on the road, having the right insurance is not only vital to protect their business, it is also a legal requirement. And because taxi drivers spend more time on the road and are considered higher risk by insurers, their public hire insurance and private hire insurance premiums are more expensive so it is natural that they look to make savings wherever they can.
Here are the top five taxi insurance myths which might not only end up costing more, they could land drivers in a lot of trouble.
1 – Short term insurance is cheaper than an annual policy
Many taxi drivers pay for short term, monthly taxi insurance policies because they believe that they policies work out cheaper than paying for annual cover. But they actually end up paying more in the long run. Short term policies are better for those drivers who do not want to commit to taxiing for the whole year but, if a driver is fully committed, there’s money to be saved with an annual policy. However, it is important to note that while an annual policy might be cheaper overall, it depends what each driver can afford.
2 – Business use on a car insurance policy covers me for hire and reward
This is one you definitely don’t want to get wrong because it could lead to a driving ban and a loss of your livelihood.
Many insurance policies offer a broad scope of cover to allow for everyday eventualities, from vehicles being off the road for maintenance or repairs, to allowing a taxi driver to use their cab as a private vehicle when they are not working.
But in order for a taxi or private hire vehicle to be legal, it must hold insurance that covers the vehicle to be used as a taxi – being covered for business use on a personal policy does not mean it can be used as a taxi. In fact, the wording of the policy clearly states it cannot be used for hire and reward.
3 – All taxi insurances are the same
While the main distinctions between are public hire insurance and private hire insurance, there are specific requirements that must also be met depending on the type of work being carried out.
As with insurance for private vehicles, there are taxi insurances for different types of taxis, with everything from black cabs to limousines, as well as individual and fleet policies.
Getting the wrong type of insurance for the work you are doing is the same as driving without insurance, which could lead to a ban as well as problems with the licensing authority.
4 – The cheapest policy is the best for me
No one really knows how good their insurance is until they have to make a claim. While a driver may save money with a cheap policy and enjoy years of claims-free taxiing, should they be involved in a crash, they could face hefty repair bills which aren’t covered by the policy, or find that delays processing a claim mean they are off the road longer than necessary and unable to earn a living.
Our advice is to get the best insurance you can afford, which is why going through an insurance broker like Patons gives you more choice and a better chance at finding a good deal for your cover.
5 – I can put off reporting my accident
Our advice is to report any accident as quickly as possible and the law is clear on this. The Road Traffic Act 1988 states that drivers involved in any collisions which cause injury to another person or damage to another vehicle, property or animal, must stop at the scene of that accident to exchange details including name and address, insurance and details of the vehicles involved. Failing to do so is an offence, even if it is a minor accident.
If a parked vehicle has been hit and the owner isn’t around, the driver should leave their details on the windscreen and report the collision to the police within 24 hours. Failing to do so could result in a fine, penalty points or even a driving ban.
It is great that taxi drivers share tips and advice with each other, but there are some things you can’t just take someone else’s word for. Make sure you know what your taxi insurance does and doesn’t cover, as well as any other terms of your taxi license and the requirements of the Highway Code.
There is too much at stake to get it wrong based on a conversation with a well-meaning colleague or friend.
All information is correct at time of publication. Information provided within this article may have changed over time. No responsibility for its accuracy or correctness is assumed by John Patons Insurance Services or any of its employees.