How to get cheaper taxi insurance in the UK

Written by Zego

Published on

Navigating the world of taxi insurance can be a daunting task, especially when it comes to understanding the costs involved. As a taxi driver in the UK, it's a legal requirement to have taxi insurance, but the question remains - how much does it actually cost?

This comprehensive guide aims to demystify the costs associated with taxi insurance in the UK. It explores the average costs for both 30-day and annual policies, and how factors such as driving history, vehicle type, and even geographical location can impact these costs.

The guide also delves into why taxi insurance tends to be more expensive than regular insurance and provides practical tips on how to potentially lower these costs. Whether a seasoned taxi driver or a newcomer to the industry, this guide offers valuable insights into the complexities of taxi insurance costs.

Here are a few insider tips to help you reduce the cost and get cheaper taxi insurance, without missing out on the important parts of your cover.

1. Research private hire insurers

Start your search by comparing quotes from specialist insurers (like Zego) that offer taxi insurance for independent private hire and rideshare drivers.

Look for all-in-one policies that flex around the way you work, with different levels of cover so you can choose a policy that’s right for your budget.

Be sure to get quotes from at least three providers for comparison. Look at what’s included in each policy, how easy it is to get covered, which optional extras you can add, and of course, the price. The time spent doing careful research upfront can result in big savings on your insurance over the long-term.

Here’s a quick checklist:

Compare quotes from specialist private hire and rideshare insurers

Get quotes from at least three companies

Compare policy details, ease-of-use, optional add-ons and price

A little bit of upfront research can save you money.

2. Check the details of your policy

When reviewing insurance policies, pay close attention to what’s included, and what isn’t. Make sure you have essential protection like hire and reward cover, third party liability, collision damage, theft, and uninsured driver coverage.

Also, look for useful extras like breakdown cover, which can give you peace of mind if you’re insuring an older vehicle. But also check for any unnecessary add-ons you can remove to save money. For example, you may be able to increase your voluntary excess, which can reduce the cost of your monthly or annual payments.

Try to find the right balance between cheaper taxi insurance costs and having enough cover for the work you do.

In brief:

Make sure you’re covered for important things, like hire and reward and liability

Look for useful extras like breakdown cover

Remove any add-ons you don’t need

Increase the excess (if you can afford to)

3. Consider telematics insurance

Telematics insurance is changing things up, especially for private hire and rideshare drivers.

Telematics is essentially a type of technology that tracks and measures your driving data – things like your acceleration, speed, braking and cornering. This data is used to get a sense of your driving behaviour (in other words, how safely you drive), which is used to calculate your insurance costs.

By driving safely over a period of time, you’ll show your insurer that you’re a low-risk driver. And this can help to lower your insurance costs. Clever, right?

Most telematics insurance policies require a device, known as a black box, to be installed in your car. But, with Zego Sense, everything is done through an app on your smartphone.

As a private hire taxi driver with a Sense policy, you get all-in-one insurance for work and personal driving, plus the ability to earn discounts on your renewal when you drive safely.

So, consider choosing a Sense policy – it’s a smart way to control your insurance costs.

A telematics policy tracks your driving data to calculate your insurance risk

By driving safely, you can earn discounts when you renew

The Zego Sense app uses your smartphone’s sensors to measure how you drive

Choose a policy like this to save money on your private hire insurance

4. Build a good driving history

Your driving history can have a big impact on your insurance costs.

Whether it’s a previous claim for a collision, or a motoring offence for speeding, insurers will look at your driving history to assess your risk as a driver. The more offences there are on your licence, the more risky you are to an insurer. And that usually means higher insurance costs.

One thing you can do to improve your risk is attend an advanced driving course. It shows insurers that you’ve taken steps to improve your driving skills, and can make you a safer driver over the long run.

To summarise:

Insurers check to see if you have any driving offences

They also look for previous accident claims

A clean driving history can help to lower your insurance costs

Consider an advanced driving course to improve your skills

5. Choose the right vehicle

The vehicle you drive can lead to a cheaper taxi insurance policy.

Insurers look at things like safety ratings, engine power, average repair costs, plus accident and theft rates, to determine how risky a vehicle is. More expensive car models that are considered higher risk will usually cost more to insure.

So, if you’re thinking of buying a car specifically for private hire or Uber work, be sure to think about how much the insurance costs will be. Choosing a more modest vehicle – with a better safety rating, lower repair costs and a smaller engine – could save you hundreds of pounds a year on your insurance cover.

Also, don't forget to think about your car's fuel efficiency. By filling-up less often, you can help to reduce your overall expenses.

Each car model has a different insurance risk

Safer cars with smaller engines and lower repair costs are usually cheaper to insure

Avoid luxury models to save money

Think about fuel efficiency, too

6. Go for an annual policy

Here's a tip that many drivers tend to miss out on – by paying for your insurance on a yearly basis, you can save a lot more than you would paying monthly.

Monthly, or 30-day policies are a great option if you need more flexibility and less commitment, say because you’re only working temporarily as a taxi driver. But, that extra flexibility can come at a cost, with a monthly policy usually costing more than an annual one over a 12-month period (sometimes hundreds of pounds more).

So, if you can afford to, choose an annual policy to save on your taxi insurance over the long run.

Monthly policies give you lots of flexibility

They’re a good option if you want less commitment, or you’re working temporarily

But, over the long run, monthly policies cost more than annual policies

If you can, choose an annual policy to save more on your cover

7. Consider an electric car

Choosing an electric vehicle (EV) as your private hire taxi can save you money on your UK taxi insurance. Insurers can offer discounts for EVs for several reasons, including:

Lower maintenance costs: Electric motors have fewer moving parts than petrol or diesel engines, reducing wear and tear and the chance of a breakdown. Fewer repairs means lower insurance costs.

Less chance of an accident: EVs have better torque than traditional cars, and extra safety tech like automatic braking. All of this helps to avoid collisions, lowering your insurance risk in the process.

Less chance of theft: EVs are often harder to steal or break into, especially models with enhanced security features, trackers and immobilisers. Fewer theft claims means lower insurance costs.

Better for the environment: Insurers often reward EV drivers with discounts to encourage more eco-friendly choices. Going electric means going green, and that can come with cost savings, too.

So, be sure to ask your insurer about any discounts available for electric vehicle drivers. Going electric not only benefits the environment, but your insurance costs too.