How Much Does Taxi Insurance Cost In The UK?
Taxi insurance in the UK costs around £2,500 per year on average, though prices range from under £1,000 for experienced private hire drivers to over £4,000 for newly licensed hackney carriage operators in city centres.
Your premium depends on whether you drive private hire or public hire, your vehicle, your claims history, and where you operate.
This guide breaks down the real costs by cover type, explains what pushes premiums up or down, and shows how to get a cheaper taxi insurance quote.
Taxi insurance costs around £2,500 a year on average, but private hire drivers typically pay less than public hire because pre-booked journeys are considered lower risk.
Compare taxi insurance quotes to find the best deal for your licence type.
- How much does taxi insurance cost on average?
- What affects the cost of taxi insurance?
- How much does taxi insurance cost by cover level?
- Is private hire insurance cheaper than public hire?
- How can you reduce the cost of taxi insurance?
- Do you need any other insurance as a taxi driver?
- Frequently asked questions (FAQs)
How much does taxi insurance cost on average?
The average UK taxi insurance premium is around £2,500 per year, or roughly £210 per month if you pay in instalments.
Those figures come from Compare the Market’s median quotes between October and December 2025. Your actual cost could be significantly higher or lower depending on your circumstances.
Private hire insurance costs
Private hire drivers typically pay less than public hire drivers. Annual premiums for private hire range from around £1,200 to £3,000.
This is because private hire vehicles are pre-booked through an operator or app, which insurers consider lower risk than street hailing.
Related: What’s the Difference Between Private Hire and Taxi Vehicles?
Public hire insurance costs
Public hire drivers usually pay more, with annual premiums ranging from £2,000 to £5,000+. Black cab drivers in London typically sit at the higher end of that range.
Hackney carriages can be hailed on the street and pick up at ranks, which means more unpredictable journeys and higher mileage. Insurers price this additional risk into the premium.
Chauffeur and executive hire costs
Chauffeur insurance sits between private hire and public hire in cost. Annual premiums typically range from £1,800 to £3,500.
Higher-value vehicles push premiums up, but the pre-booked nature of chauffeur work and lower annual mileage help keep costs below public hire levels.
| Type of taxi work | Typical annual cost | Typical monthly cost |
| Private hire (app-based, e.g. Uber) | £1,200 – £2,500 | £100 – £210 |
| Private hire (operator-based) | £1,500 – £3,000 | £125 – £250 |
| Public hire (hackney carriage) | £2,000 – £5,000 | £165 – £420 |
| Chauffeur / executive hire | £1,800 – £3,500 | £150 – £290 |
Source: Based on Compare the Market median quotes (Oct–Dec 2025) and industry estimates.
What affects the cost of taxi insurance?
Your vehicle, your driving history, your licence type, and where you operate are the four biggest factors that determine your taxi insurance premium.
Insurers weigh each of these differently, but together they account for the majority of the price variation between drivers.
Your vehicle type and age
The make, model, and age of your vehicle directly affect your premium. Higher-value vehicles cost more to repair or replace, which means higher insurance.
Purpose-built hackney carriages like the LEVC TX and wheelchair-accessible vehicles (WAVs) often carry higher premiums because replacement parts are specialist and expensive.
Your driving record and claims history
A clean driving record with no claims or convictions keeps your premium low. Fault claims within the last five years can double your premium or more.
Points on your licence for speeding or mobile phone use also push costs up. Serious convictions like drink-driving make taxi insurance much harder to find and significantly more expensive.
Your licence type and experience
How long you’ve held your taxi driver licence and your full driving licence matters. New drivers with less than two years of licensed experience pay significantly more.
Insurers also distinguish between council-issued taxi licences and TfL PCO licences. London-licensed drivers often pay more due to higher traffic density and claim frequency.
Where you operate
City centre drivers pay more than rural drivers. London is the most expensive area for taxi insurance, followed by Birmingham, Manchester, and other major cities.
This reflects higher accident rates, theft risk, and repair costs in dense urban areas.
Cover level and policy type
All drivers carrying passengers for hire must hold valid motor insurance by law. Comprehensive cover costs more upfront but protects your vehicle as well as third parties.
Most taxi drivers choose comprehensive because their vehicle is their income. Losing it without cover could mean weeks without work.
How much does taxi insurance cost by cover level?
Comprehensive taxi insurance is not always the most expensive option. It covers damage to your own vehicle, theft, and fire as well as third-party claims, and can sometimes cost a similar amount to third-party only policies.
For most taxi drivers, comprehensive is the better value because a taxi is a business asset. Insurers sometimes price comprehensive lower than third-party only because drivers who choose it tend to be lower risk.
Third-party only
The cheapest option, covering damage to other vehicles and property plus injury to other people. It does not cover your own vehicle at all.
Typical cost: £800 to £2,000 per year. Rarely recommended for working taxis because losing your vehicle means losing your income.
Third-party, fire and theft
Adds cover for fire damage and theft on top of third-party protection. A middle ground between cost and cover.
Typical cost: £1,000 to £2,500 per year. Worth considering if your vehicle is older and its market value is low.
Fully comprehensive
Covers everything above plus accidental damage to your own vehicle. This is the most popular choice among taxi drivers.
Typical cost: £1,200 to £5,000 per year depending on vehicle, area, and experience.
| Cover level | Third-party damage | Fire & theft | Own vehicle damage | Typical annual cost |
| Third-party only | Yes | No | No | £800 – £2,000 |
| Third-party, fire & theft | Yes | Yes | No | £1,000 – £2,500 |
| Comprehensive | Yes | Yes | Yes | £1,200 – £5,000 |
Is private hire insurance cheaper than public hire?
Yes, private hire insurance is usually cheaper than public hire insurance because pre-booked journeys are considered lower risk by insurers.
The gap widens in city centres where public hire drivers are exposed to late-night rank work and unplanned routes.
Why public hire costs more
Public hire vehicles can be hailed on the street at any time. This means more exposure to late-night passengers, unpredictable routes, and higher daily mileage.
Insurers also factor in the vehicle type. Purpose-built hackney carriages cost more to insure than a Toyota Prius used for minicab work.
PCO and TfL-licensed drivers
London private hire drivers need a TfL private hire licence. Despite being private hire, London premiums are among the highest in the UK because of traffic density and claim frequency.
If you drive for Uber or Bolt in London, you’ll typically pay more than a private hire driver in a smaller city, even with a clean record.
Related: What Insurance Do I Need for Uber?
How can you reduce the cost of taxi insurance?
The most effective ways to cut your taxi insurance premium are building a no-claims history, increasing your voluntary excess, and choosing a lower-group vehicle.
These three changes alone can save hundreds of pounds per year. There are several other steps worth considering too.
Build your no-claims bonus
Every claim-free year adds to your no-claims discount. According to the ABI, drivers can earn up to a 60% discount after five claim-free years.
Some insurers offer protected no-claims bonus for an extra fee. This keeps your discount intact after a fault claim, though your overall premium may still rise at renewal.
Increase your voluntary excess
Raising your voluntary excess from £250 to £500 reduces your premium because you’re agreeing to pay more towards any claim.
Only do this if you can afford the higher excess. Setting it too high can leave you stuck if you need to make a claim while funds are tight.
Install a dash cam
Many insurers offer discounts for vehicles fitted with dash cams. Footage speeds up claims and helps prove you weren’t at fault in an accident.
Front and rear cameras give you the best protection and the biggest potential discount.
Related: Why Private Hire Drivers Need a Dash Cam in the UK
Choose your vehicle carefully
Insurance group, value, and repair costs all affect your premium. A Toyota Prius or Skoda Octavia costs significantly less to insure than a Mercedes E-Class or LEVC TX.
If you’re buying a new taxi, check the insurance cost before you commit. The difference between vehicles can be hundreds of pounds per year.
Related: Best Car for Private Hire Taxi in the UK
Consider pay-as-you-go insurance
If you drive part-time, pay-as-you-go providers like Zego offer policies charged by the hour or mile. This can be significantly cheaper than an annual policy if you only work weekends or evenings.
Pay-as-you-go insurance is most common among app-based private hire drivers. Check that the policy meets your operator’s requirements before switching.
Do you need any other insurance as a taxi driver?
Most taxi drivers only need taxi insurance to drive passengers legally, but public liability insurance is worth considering if you handle passengers’ belongings or help them in and out of the vehicle.
Your taxi policy covers you for accidents while driving. But if a passenger trips on a step you’ve placed, or you damage their luggage loading it, that’s a public liability claim.
Public liability insurance
Public liability insurance covers claims from third parties for injury or property damage that isn’t related to driving. It typically costs £50 to £150 per year for a taxi driver.
If you run a taxi business with employees, you’ll also need employers’ liability insurance by law.
Fleet insurance for multiple vehicles
If you own two or more taxis, taxi fleet insurance can be cheaper than insuring each vehicle separately. Policies start from as few as two vehicles with a mini fleet policy.
Fleet insurance simplifies renewal dates and admin by putting all vehicles on one policy.
Frequently asked questions (FAQs)
Taxi insurance costs around £100 to £420 per month depending on whether you drive private hire or public hire, your vehicle, and your location. Monthly payments are usually 10–15% more expensive overall than paying annually because insurers charge interest.
Yes. Taxi insurance is significantly more expensive than standard car insurance because taxis cover more miles, carry passengers for hire, and are on the road for longer hours. A standard car insurance policy does not cover you for carrying paying passengers.
No. A standard private car insurance policy does not cover hire and reward use. If you carry paying passengers without the correct taxi insurance, your policy is void and you are driving uninsured, which is a criminal offence.
Yes. All Uber drivers in the UK need a valid private hire insurance policy that covers hire and reward. Uber requires proof of insurance before you can go online and accept trips.
Public hire insurance typically costs between £2,000 and £5,000 per year. Drivers in London and other major cities usually pay at the higher end due to greater traffic density and claim frequency.
Some providers offer short-term taxi insurance from one day to three months. This is useful if you’re covering for another driver or trying taxi work before committing to an annual policy. Daily and weekly policies tend to be more expensive per day than annual cover.
Yes. All taxi insurance policies cover injury to passengers as standard. Comprehensive policies also cover damage to your own vehicle. What they do not cover is non-driving incidents like a passenger tripping outside the vehicle.
Taxi drivers cover significantly more miles than private motorists, spend more hours on the road, and carry members of the public. This combination of higher mileage, longer exposure time, and passenger liability makes taxi insurance one of the most expensive motor insurance categories.
It depends on your policy. Some taxi insurance policies cover you to drive other vehicles on a third-party only basis, but many do not. Check your policy wording or ask your insurer before driving a vehicle that isn’t named on your policy.
Yes. Insurers require a valid taxi or private hire driver’s licence issued by your local council or TfL before they will provide cover. You cannot get taxi insurance with only a standard driving licence.