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Is monthly Taxi Insurance right for you?

Taxi ride on a busy route of Devon town UK

Working as a taxi driver has many advantages, including being your own boss and being flexible about when and where you work.

For some, this might mean the hustle and bustle of busy town and city centres on Friday and Saturday nights, where there are plenty of fares, as well as challenges to consider. Those wanting a quieter shift might decide instead to focus on school runs or taking people to and from the shops or supermarkets during the day.

Right cover

As with running a private car, there are things taxi drivers have to keep on top of, such as annual servicing and MoT when necessary, vehicle excise licence and taxi insurance. And, whatever your situation, our advice is always to take out the best cover you can afford.

Those working full-time as cabbies or private-hire drivers usually take out an annual policy, whether they pay their premiums in monthly instalments, or in one go when they take out the policy.

It is also possible to take out short-term public hire insurance or private hire insurance, which would be in place for anything from a week to a few months at a time, offering flexibility to full and part-time, drivers. As well as covering them when they are working, it means they are not spending money on taxi insurance when they aren’t and don’t need it.

Weekly or monthly insurance

As we all continue to feel the pinch with the high cost of living, some taxi drivers might consider monthly policies as they try to make ends meet. But in the long run, this would actually be more expensive than an annual policy if they were to continue working for a year. In this case, an annual policy paid in monthly instalments would be the better option.

This is because monthly and short-term policies are designed to cover drivers who will only be operating for short periods at a time, such as at Christmas, and are more expensive. Whether drivers have retired or have another job, once they have their taxi or PHV licence, they can return to the trade at any time and short-term cover such as this makes it easy for them to get back behind the wheel.

For drivers working for short periods at a time, taking out a monthly policy makes more sense and would usually be cheaper than taking out annual cover and cancelling after a few weeks or months.

New drivers

Another situation monthly taxi insurance works well for is those who are just starting out on their taxi career. It gives them time to get used to their new occupation and decide whether or not it is for them. If after a few weeks or months they decide to do something else, they can simply walk away, knowing they will not have to pay for the remainder of the policy.

But if they decide it is what they want to do, they can wait for their short-term policy to end and then take out an annual one.

While there are positives to monthly policies, taxi drivers also need to consider some of the negatives, such as weekly and monthly policies don’t allow them to build up no-claim discounts, which are only calculated after a year of claims-free motoring.

Drivers should also be aware that if they have been using their own vehicle for taxi work, when the taxi insurance policy comes to an end and they decide not to renew it, they must take out domestic car insurance in order to use it as a private vehicle.

If they wish to return to taxi or PHV work, they will need to take out another taxi insurance policy.

Short-term policies give taxi drivers extra flexibility to help them run their taxi business as they need to, whether they are starting out on their journey or coming back to it for a short period.

Using a taxi insurance broker such as Patons helps give you a wider choice of cover to suit your business.

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.