Insurance tips for taxi drivers amid rising costs

As the cost of living continues to increase, there are steps taxi drivers can take to reduce their taxi insurance premiums.

The rising cost of domestic car insurance made headlines recently after the Association of British Insurers revealed that soaring repair costs pushed the average vehicle premium to £511 – 21% higher than this time last year.

And the BBC has found that renewals for some motorists had tripled from the previous year – even though some drivers had not made a claim. The ABI said “sustained cost pressures” were behind the record highs and the industry paid out £2.4bn in all motor insurance claims in the first quarter of this year – up 14% from the same period last year.

It is a situation that Patons Insurance sales director Matt Chadwick said the insurance broker is watching closely.

He said: “We have seen an increase of approximately 15% over the past 12 months and while there has been an increase in taxi insurance premiums, it is still substantially behind the increase levels seen on private car insurance – I was told by an insurer last week that they had seen a 30% increase on their private car book of business.”

Unfortunately, higher costs look likely to stay for the foreseeable future and are likely to affect the taxi insurance sector.

Matt said: “I fully expect to see premiums continue to increase over the next 12 months or so until they have caught up to the private car levels of increase.”

And he agrees that the soaring cost of repairs is fuelling the higher costs, with bills for short-term replacement hire cars often running into thousands of pounds per claim.

He said: “As with everything else in the country at the moment, things are costing more. The insurance industry is not immune to this and has also been hit by an increase in costs. One of the main reasons for the rise in insurance premiums is the increasing cost of claims. Everything from the wage the mechanic receives to the cost of the parts/materials to repair your vehicle have increased.

“There also remains a lack of availability of vehicle parts, meaning that repairs are taking longer to complete. This increases claims costs even further due to customers spending longer in a plated courtesy car (for non-fault accidents only), the costs of which are passed on to the insurance company.

“We regularly see large hire car bills being paid by insurers because of more time spent in a rental vehicle. This is because of a lack of parts which means repairs can’t be carried out quickly.

“All of this has therefore had a substantial knock-on effect to the insurance industry resulting in higher premiums.”

Despite this, there are steps taxi drivers can take to reduce their public hire insurance, private hire taxi insurance and fleet taxi insurance.

And the first one is simple. Matt said: “Ensure that they deal with a broker such as Patons, which shops a wide range of insurers to find them the best deal.”

Another key tip, whatever the state of the insurance market, is to give yourself plenty of time which gives you more choice.

Matt said: “Make sure you shop around in plenty of time. With some insurers, the premium increases the nearer you get to the required cover date.”

And, whatever has happened in the past year of taxi driving, being upfront with your taxi insurance broker will get you better results.

Matt said: “Ensure that you provide fully accurate risk information when requesting a new quotation. If you are an existing client, then ensure that all of your details are reviewed prior to obtaining your renewal rate.

“Some insurers check the claims database when a client requests a quote and will increase the price if incorrect claims information is given. Mileage can also be a rating factor with some insurers, so it’s important you are giving accurate information.”

As the cost of living continues to rise, these steps – combined with consistently driving safely – can help taxi drivers reduce their taxi insurance premiums.