Taxis Insurance

UK taxi insurance - what are the special risks?

According to the Road Traffic Act of 1988, every motor vehicle in the UK must have the minimum standard insurance coverage as defined by the act. The act states that this minimum insurance must at least pay for the injuries one may inflict on other people or their property if involved in an accident. Taxis have additional special risks and need to insure for the people they carry.

There are two types of taxis operating in the UK that are commonly hired by the public. There are the black cabs which clients can hail and get picked up by on any roadside; then there are the “private hire” which make it mandatory to first arrange the pick up through the taxi office before the start of the trip. Before being allowed to get a taxi license plate for either of these types of taxis, the taxi licensing authorities will require appropriate, valid insurance documents for these vehicles.

Taxi insurance can be expensive due to the special risks involved. Before you can get taxi insurance, certain vehicle licensing requirements have to be fulfilled. This is because the vehicles used as taxis have to be relatively new models, and are restricted to certain makes. Also, the vehicles that are used for public transport purposes must have insurance that has Public Liability cover, in addition to motor insurance. A number of other factors that impact the cost of insurance also have to be taken into account. For example, the age and the driving record of the drivers who will be driving the taxi. The biggest issue for a majority of the insurers is the higher security risk.

Third party insurance is the cheapest kind of cover available and it only covers for the bare minimum legal requirements. If you are found to be at fault, this insurance will only pay for the property damage or injuries caused to the other party involved in the accident. It will not take care of any damage to your own car. If you own a valuable vehicle, then comprehensive insurance would be more appropriate. Such policies tend to be expensive and generally come with an “excess”. Excess is the amount you have to pay out of pocket before the insurance company will pay out its share. For example, if you make a claim for £1,500 and the insurance excess is £500, then you have to pay the £500 first, before the insurance company pays the remaining amount. The benefit of this type of insurance policy is that it not only pays for the damage caused to the third party, but for the damage to your own vehicle as well
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Transporting the public means that you not only have a liability to yourself, but to others using the road and in addition, a liability of carrying the passengers safely to their desired destination. Good taxi insurance not only ensures the safety of passengers and other users of the road, but also has the power to cover any loss of income that may arise out of an accident. With a greater number of compensation claims, the cost of taxi insurance has gone up significantly, with some drivers having to pay 50 percent or more extra. Despite this, good insurance can be worth the cost if you’re involved in an expensive accident.