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What is Minicab Insurance?
As the driver of a minicab, you’re required to have a specific type of insurance, which is called “minicab insurance.” From the start, it’s necessary to understand that minicab insurance is not like regular car insurance.
Your minicab is a commercial vehicle used to transport passengers, whereas your car is a private vehicle used to transport family and possibly friends. In fact, while you may use your personal vehicle as a cab, the private car insurance you have will not be enough to protect your minicab business. Minicab insurance is a type of business insurance to protect your passengers, your vehicle and you in case of an accident, etc.
Am I Required to Have Minicab Insurance?
Yes, if you drive your vehicle for profit (fares) and accept passengers for transport, then you’re legally required to have this type of insurance coverage.
Not all insurance companies offer this type of insurance, so it may be necessary to find specialist insurance companies that offer minicab insurance.
What Type of Insurance Will I Need?
There are generally two types of insurance that cover taxis; these are private hire and public hire. As a minicab driver, you’ll need to obtain private hire coverage.
Private hire insurance covers taxis (such as minicabs) that can only pick up pre-booked passengers. This means you can’t pick up passengers who hail your cab from the street. Instead, you’ll be picking up passengers who have pre-booked your services through the Internet, telephone, or in person at the minicab office.
What are the Requirements to Obtain Minicab Insurance?
Minicab drivers can get insurance only after meeting these requirements:
- They’ve been a citizen of the UK for at least 5 years
- Hold a valid taxi driving license
- Can only be a taxi driver, and have no other job or profession
- Must be at least 25 years of age
- Must have been a taxi badge holder for the previous 12 months
What Other Types of Coverage Will I Need for my Minicab?
In addition to minicab insurance, you’ll likely need some additional coverage, too. Here are some recommended types of coverage for both public and private hire taxi cabs, including minicabs:
- Public liability: this type of coverage protects you and your business against legal actions presented by third parties. You’ll be protected both legally and financially for damage or accidents your passengers may experience while in your cab. One note—some minicab insurance policies do include this type of coverage, but not all. It pays to completely read through the policy to make sure you have this protection. If you have any doubts, be sure to ask the insurance agent if the policy offers this cover.
- Legal expenses: if you’re faced with a liability claim in court, this coverage will help pay your legal expense. Without this coverage, you could face complete financial ruin.
- Road risks: there are four types of policies under this type of coverage:
- Road risk only: which is generally designed for taxi drivers that run a small business. This coverage is generally cheaper, but only covers road risk and nothing else.
- Road risk third party: is the most basic level of coverage, and the legal minimum required. You’ll be protected from liabilities if you’re involved in a car accident that’s your fault.
- Road risk third party, fire & theft: this coverage covers the first two we’ve already reviewed, plus fire damage and theft of your car. However, this will not cover damage to your car from an accident in which you’re held at fault.
- Road risk comprehensive: this policy covers everything mentioned in the road risk third party, fire & theft policy, and also covers any damage to your car if you’re driving and have been held responsible for the accident.
- Breakdown insurance: provides coverage in the event your taxi breaks down while on the road.
Now, we’ve covered the basics of minicab insurance. Next, we’ll take a look at the factors that can affect the premiums you’ll have to pay for insurance coverage.
What Factors Can Affect My Premiums?
When you begin to contact insurers about minicab insurance coverage, they may ask you several questions. These are all normal and the answers you give will directly impact your insurance rates.
The cost of your insurance premium is determined by several factors including:
- Mileage: taxis generally cover more miles than a regular car, so be sure to know your mileage before talking to an insurance agent. If you frequently travel long distances, then you might consider getting an unlimited mileage option with your taxi insurance. Not all policies include this, so be sure to ask your agent if they offer this option.
- Region: insurance coverage is generally determined by the region where you’ll be driving your minicab—what area or city you normally provide service. If you find an insurance provider you like, be sure to ask if they cover your region or area. Not all insurance companies will provide insurance in every area.
- Modifications: also called mods, includes any type of modification you’ve made to the minicab. This could be something such as adding disabled access, etc. Be sure to tell your insurance agent about any and all modifications you’ve made to your car. Otherwise, a future claim be lead to your insurance being invalidated, which is something you want to avoid at all costs.
- DVSA Qualification: you may be asked if you’ve passed the DVSA driving test. In some areas, this is a qualification to drive a taxi. You may not receive insurance if you’ve not passed your driving test.
One very important note: always be honest and give your insurer the correct information when they ask you about your vehicle, mileage, region, etc. Giving incorrect information is called insurance fraud, for which you can even go to prison.
Before signing up with any insurance provider, be sure to completely read through the entire insurance policy to make sure you understand what’s covered, etc. If you have any questions, always ask the agent before you sign and pay for the policy. Never hesitate to ask questions. It’s the agent’s job to provide the right answers. Also, you want to make sure you have the right policy for your minicab business.
How Can I Save Money on Minicab Insurance?
Here are a few points to help you find the best price on your minicab insurance:
1). Pay annually: avoid monthly insurance premium payments, as these always run higher. If at all possible, opt for annual payments to save money.
2). Comparison sites: use online insurance comparison sites to find insurance companies who provide minicab insurance. Once you’ve found some specialist providers, you can then do a price comparison to see who has the best price for the coverage you need.
3). No claims bonus: if you have few claims, then you’ll maybe find providers who offer a no claims bonus, which means you could pay less for your minicab insurance policy.
4). Security: make sure your taxi is safe and secure at all times. You may be able to find insurers who offer lower premiums if you’ve added security features to your vehicle, park it in a safe place, etc.
It is possible to find very good minicab insurance at a price to fit your budget. Just be sure to ask questions, thoroughly read through the policy and make sure you understand what’s covered before signing and paying for that new policy.
National Taxi Association – Since 1960, this body has been helping to consult on all forms of taxi legislation in England and Wales.
National Private Hire Association – The NPHA is an organisation that provides useful support and help for cabbies everywhere.
Licensed Taxi Drivers’ Association – A membership group for taxi drivers, the LTDA is also a support group for those that work in the trade.
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