Taxi insurance is a type of commercial auto policy that protects for-hire livery operations by paying for accidents that cause damage to you, your vehicles, your passengers, or other people and their property. Pricing options vary for taxi insurance, but annual premiums typically range between $3,500 and $10,000.
Progressive Commercial is a great choice for taxi insurance. It has a quick quote option online to get pricing on taxi insurance. Progressive Commercial Insurance also provides a phone number to supply expert advice on taxi insurance. Be sure to visit Progressive Commercial Insurance for your business insurance needs.
Taxi Insurance Providers
Taxi drivers who want to work with a national leader to get quality coverage
Owners of small fleets who need to cover garage operations
Cabbies who want instant online quotes to compare
Taxi company owners who want help controlling insurance costs
Taxi drivers who need higher limits and assistance with state or federal filings
Because of the unique risks in for-hire livery services, few well known insurance carriers offer coverage to taxi drivers and cab companies. Many of these business owners have to turn to surplus lines brokers or regional insurers to get the policies they need. Our list includes two national carriers, plus online brokers that can quote both standard and surplus insurers.
Progressive Commercial is a leader for commercial auto insurance and one of the few that actually offers policies for taxi companies. As a national powerhouse, it can provide immediate online quotes for taxi insurance in 38 states, plus options for shuttle services and sightseeing tours. Limited coverage for rideshare drivers is available, too.
Bankers Insurance is an independent insurance agency that partners with top taxi insurance companies to write policies in all 50 states. Because of these partnerships, Bankers Insurance can offer a wide range of policies, including coverage for garage operations. This makes Bankers idea for taxi company owners with a small fleet of 10 or more cabs.
CoverWallet is an online broker that offers a simple application that makes purchasing taxi insurance easy. CoverWallet’s system helps their customers by identifying the key elements of a business to underwrite the risk properly. CoverWallet partners with many insurance companies and can offer all lines of commercial insurance for most industries.
CoverWallet provides instant taxi insurance quotes in minutes. It has an easy online application specific to taxi businesses. CoverWallet offers a free quote of insurance and savings when you purchase taxi insurance online.
ProSight Specialty focuses on niche industries where business owners typically have a difficult time finding insurance. For taxi drivers, ProSight Specialty offers broader coverage than many of its competitors, including coverage for lease gaps, driver assisted technology, and compliance audits. Cab companies can also use ProSight’s customized loss reporting by year, driver, and vehicle number to reduce claims and control their insurance costs.
ProSight Specialty only covers taxi operations in Alaska, Arizona, California, Colorado, Connecticut, Florida, Illinois, Kansas, Massachusetts, Minnesota, Missouri, Nevada, New York, Ohio, Oregon, Texas, Virginia, Washington, and Wisconsin.
Cab companies with either more or more valuable vehicles should work with National Indemnity Company (NICO). The company can offer limits of up to $5 million for some taxi services, which is substantially higher than the industry norm, while also providing assistance with state and federal insurance filings. NICO is also part of the Berkshire Hathaway insurance group and earns high financial strength ratings from A.M. Best, indicating a superior ability to pay claims.
How Taxi Insurance Works
Taxi insurance is essentially a type of commercial auto policy designed to cover the unique risks cab drivers face. The amount of time on the road, the number of passengers in and out of their vehicles, and the locations those passengers may need to go are just a few examples of how for-hire livery operations create greater risk that makes specialized coverage necessary.
To guard against these risks, taxi drivers need a variety of coverage types, including:
- Commercial auto liability: Liability coverage pays for damage you cause other people; taxi drivers need auto liability for both bodily injury (BI) and property damage (PD); this coverage may also be called primary liability
- Physical damage: This first-party coverage pays for damage to your vehicle and can be purchased to cover collisions as well as other perils such as theft or fire
- Medical payments: Another first-party coverage, medical payments cover your immediate medical care after an auto accident
- Uninsured/underinsured motorist (UM/UIM): UM/UIM covers your car repairs if you’re in an accident caused by a driver with insufficient insurance; drivers may also be able to get their deductible waived for this situation
- Accessories: This covers the cost of replacing equipment you’ve installed in your cab such as your meter, GPS, and radio
These coverages take care of the risks associated with your cab. However, if you own a dispatch service, you most likely need additional business insurance policies such as general liability, commercial property, and workers’ compensation.
Taxi Insurance Requirements
Qualifying for taxi insurance is more difficult than it is for other types of commercial auto coverage. This is because taxi drivers are responsible for the passengers in their vehicles, so state governments place strict requirements on cab companies and insurance companies make equally strict eligibility guidelines. These can include:
- Age and type of vehicle: Older model cabs may not qualify for insurance in some states or with certain carriers
- Driver’s age: Many insurance carriers do not cover drivers younger than 25 in their taxi insurance policies
- Driving history: Drivers with serious accidents or violations on their records are often ineligible for cab insurance
- Passenger seating capacity: Many states base the required coverage amounts on the number of passengers a for-hire taxi can hold
- Local authorities: In some locations, taxis businesses have to meet insurance requirements mandated by local authorities such as the city’s transit authority
- Contract requirements: Taxi services that enter private contracts with other businesses, like airports or retirement homes, may find additional insurance requirements listed in their contracts
The best resource for state specific taxi insurance requirements is your local Department of Motor Vehicles (DMV), and your insurance carrier should be able to explain their requirements. Remember, too, that either you or your insurer usually have to report your insurance information to the state.
Who Taxi Insurance Is Right For
Taxi insurance is appropriate for anyone who drives the general public in a vehicle for a fare. Unlike public transportation, taxi passengers choose where they are picked up and dropped off. Additionally, there are two main types of taxi services:
- Public hire: Transportation arrangements are random, such as a taxi cab picking up a passenger on a street corner
- Private hire: Transportation is booked ahead of time, such as a prearranged airport shuttle, non-emergency medical transport, and sightseeing tours
Rideshare operations seem like they’d be covered as a private-hire risk, but most taxi insurance companies do not include them on their policies. This is because rideshare blurs the line between personal and business driving, and that makes insurers less likely to cover them.
Who Buys Taxi Insurance?
Taxi insurance is typically the responsibility of the business owner, but that can be a tricky matter in the for-hire livery industry. A driver who owns his own vehicle and drives even part-time is a business owner just as much as someone who has a fleet of cabs in a garage is. And since carriers see a big difference between commercial and personal auto coverage, taxi insurance is essential in either case.
But where things get really murky is when a driver leases her taxi from a cab company, pays a gate fee, and keeps the rest of her fares and tips. In this case, the company owner often claims the driver is an independent contractor which would then make the driver a business owner responsible for getting taxi insurance.
That may seem clear cut, but calling someone an independent contractor doesn’t necessarily make it so. Courts generally base the definition on the relationship, looking at factors like the degree of control the worker has over their job and how integral the work is to the company’s operations. In recent years, cab companies have been held responsible for back taxes, employee injuries, and fines after misclassifying employees as independent contractors.
Long story short? Whether you’re a company owner or a driver, you want to make sure you understand the difference between employee and independent contractor and insure your workers and business appropriately.
Taxi Insurance Policies & Costs
At its essence, taxi insurance is a commercial auto policy. And just like any driver, a cabbie starts with the liability coverage that’s required by the state and then adds to it depending on the specific risks she faces. This might include getting coverage for damage she causes to her own cab as well as damage an uninsured motorist causes.
A cab company with a fleet of vehicles, however, needs additional policies. These include:
- General liability: Covers claims over property damage and bodily injury against your business when caused by something other than a car accident
- Workers’ compensation: Provides medical benefits and lost wages to employees who are injured on the job; workers’ comp is required in every state except Texas
Cost of Taxi Business Insurance Policies
Commercial auto liability (Primary liability)
$3,500 - $5,000
$1,800 - $4,500
$500 - $5,000
$2,000 - $5,000
The price of your taxi insurance largely depends on the type and amount of coverage you choose. For example, individual taxi drivers are only required to carry primary liability, but may choose to get physical damage coverage. If you own a taxi dispatch service, however, you most likely need general liability and workers’ compensation insurance as well as liability and physical damage coverage for each of your business-owned cabs.
Other factors that influence the cost of your taxi insurance are:
- Location: State and local authorities impact how much coverage you need, but your location can also affect your premium if there is a lot of crime, extreme weather, or traffic
- Drivers’ ages: Younger drivers are typically more costly to insure
- Driving record: If you and the drivers you hire have accidents and violations on your record, you are probably going to pay more for your coverage
- Vehicle’s year, make and model: Insurers usually have preferences for certain vehicles, and their pricing reflects this
Taxi Insurance Tips
Taxi insurance can be expensive because cab drivers face so many risks. Below are a few tips to help you keep costs down while still getting quality coverage.
Get Multiple Quotes
Obtaining quotes from different insurance providers can help with finding the best rate for your taxi insurance. An efficient way to do this is to work with an independent insurance agent or broker because they can typically provide quotes from more than one carrier for comparison.
One of the best ways to keep taxi insurance costs low is to prevent losses from happening in the first place. Establishing a safety program can minimize the accidents that cause your rates to go up, as can hiring drivers with clean driving records. You might even want to invest in equipment that records your drivers’ trips.
“Install a front and rear dashcam to record all trips. In the event of an accident, the recorded footage could … prove their driver wasn’t at fault for an accident.”
—Earl Jones, Farmers Insurance Agent
Ask About Discounts
Taxi insurance companies often offer discounts for certain behaviors—especially when those behaviors benefit their bottom lines. For example, many insurance companies reduce your premium when you purchase multiple policies with them. Others have discounts for good driving records, paying your entire premium up front, and prior livery experience.
Taxi Insurance Frequently Asked Questions (FAQs)
Not only is taxi insurance usually expensive, but there are a number of rules and regulations that complicate coverage. In this section, we try to simplify the issue by answering a few of the most frequently asked questions.
Why do taxi drivers need insurance?
First, cab drivers need insurance because state and local governments typically require it. This is because taxicabs transport people, so the government puts regulations in place to protect the public. However, cab drivers also need insurance because they are business owners with assets to protect. If an uninsured taxi driver causes an accident, then entire costs fall on him and that could mean the end of his business.
How much is insurance for a taxi company?
As with all business insurance, the cost of taxi coverage can vary greatly based on certain factors, like driving record, location, and vehicle value. In general, taxi insurance costs between $5,000 and $10,000 per vehicle, per year.
Why is taxi insurance so expensive?
Taxi drivers pay a lot for insurance because their work is risky. They put a lot of miles on their vehicles, often in metropolitan areas, and that increases the possibility of an accident, which in turn increases the price of insurance.
Whether you are a solo cab driver or the owner of a taxi dispatch company, you need insurance to protect your vehicle, your passengers, and your business. Unfortunately, taxi insurance can be difficult to find among national insurance carriers. An independent agent or broker can help you find the best pricing and coverage options for your taxi business.
If you do want to work with a well-known national carrier, be sure to visit Progressive Commercial. The company is one of the top commercial auto insurance providers in the US and offers an easy online application for taxi drivers.