The best way to save on taxi insurance is to shop around. Get three quotes from three different agents, all together at once. Compare policies and choose the one that works for you!
How Much Does Taxi Insurance Cost?
Insurance is a fixed expense for taxicab operators in that you must have it. But it isn’t a fixed expense in that there is a single price you have to pay. In fact, the cost of taxi insurance can vary widely from the very cheap to the very expensive. There is room for you to save money.
Insurance for taxi services depends on many variables, but most policies average somewhere between $5,000 and $10,000 per cab per year. Where you and your taxicab business falls within that range is influenced by a variety of factors — some outside of your control, some within it.
What affects your average cost
Your home state
Where you live plays a big part in the cost of your taxi cab insurance. Certain states are more prone to accidents, making them more expensive.
The business you do
The type of business you run also influences your price. If you do a lot of airport runs, you’ll pay more. If you’re more of a chauffeur service, you’ll pay less. We’ve broken it down further:
- Street taxi – If a majority of your business comes from hailed cab services, expect to pay a little more for insurance since there is more risk associated with picking up unidentified strangers.
- Private hire – If your business is mostly dispatch, expect to pay less on insurance.
- Jitney – Since taxibuses are larger and carry more passengers than traditional taxicabs, they face higher rates of insurance.
- Limousine – Depending on your type of limo, you could pay more or less than other pick-up services. Stretch limos are more costly while sedans are less so.
The longer you’ve been in business, the cheaper your insurance will be. This is good news for established taxi operators. As for younger drivers — don’t worry too much. After a few years your premium will drop too.
The age and experience of your drivers
If you own a larger company with several taxi drivers, the insurance company will want to look at their ages and driving records. That’s why it’s so important to vet everyone before you hire them on. You want to make sure they won’t launch your insurance rates into the stratosphere.
How many accidents you’ve been in
Anyone who drives a taxi cab long enough will get into a few accidents. Insurance companies know this. The trick is to keep your accidents to a minimum. The fewer wrecks you’ve seen (regardless of whose fault it is), the cheaper your insurance will be.
The years, makes, and models of your cabs
You will pay more for insurance the more your cab is worth. On the flip side, insurance companies don’t like to insure vehicles that are ancient. A used, reliable taxi — maybe five or six years old — is your cheapest option.
Your limit and deductible
As your insurance agent is writing up your policy, he’ll ask you about which limit and deductible you prefer. You can get a more affordable rate by lowering your limit and increasing your deductible. But be warned. A low limit and high deductible can put you in a tricky spot if you ever get into a major accident. You could be responsible for footing a large portion of the bill.
The average cost of taxicab insurance coverages
The price you pay for insurance is largely determined by which coverages you opt to get. Single taxi drivers are only responsible for primary liability, but if you own a dispatch service, you’ll need to get general liability insurance and workers’ compensation insurances as well.
How to reduce your taxicab insurance rates
Shop around – The number one thing you can do to get the best deal on taxi insurance is to talk to multiple agents at once. Easier said than done, right? Well, we can help. Fill out one form and we connect you with three insurance agents who know how to write policies for taxi operators. They compete and you save.
Establish a safety program – It’s a fact that when you get into an accident, your insurance goes up. The best way to keep your premium low is to anticipate accidents and prevent them before they happen. To do this, you have to develop a thorough safety plan for you and your drivers to follow. And you can’t stop there. You must follow through on it. Anyone caught not following safety rules must be reprimanded.
Bundle coverage – Taxi companies have multiple aspects of their business that they need to insure. It’s often best to package all that coverage under a single insurance company rather than buying it piecemeal from several companies in hopes of getting a better price. Companies give you discounts for bundling coverage. This saves you time, and time is money.
Why Does Taxi Insurance Cost So Much?
Driving a taxi is a dangerous job. Taxi drivers are often assaulted on the job. They are on the road all day long so they’re more likely to get into car crashes. In fact, driving a taxi is the 11th most dangerous job in America. It makes sense then that insurance will cost you a pretty penny.
But that doesn’t mean there isn’t room to save. We can help. Let us connect you with three taxi insurance agents who will compete for your business. They offer you their best price and you save!