If you drive a private hire vehicle, there are already a number of issues to deal with including angry passengers, frustrating traffic jams and licensing requirements. Another problem is that private hire insurance is usually more expensive than regular vehicle insurance. You probably believe this is unfair but there are reasons for the difference in price.
As you drive more miles than an average motorist, there is statistically a higher chance of being involved in an accident and this can be seen in the price you pay for your premium. Private hire insurance is a legal requirement if you wish to operate such a service in the UK and you need the protection it provides. Below, we look at the different types of private hire insurance available.
Third Party Only
Third party insurance is the minimum level of cover required by law to drive any vehicle on UK roads. It is very basic cover and covers you for damages caused to other people’s property or the costs associated with treatment of injuries they sustain. However, this form of insurance does not cover you if your vehicle is stolen, lost or damaged.
If you are operating a private hire vehicle, you need a higher level of coverage because if you are involved in an accident and only have Third Party insurance, you could have to pay thousands of pounds to repair the damage sustained by your vehicle. This will keep you off the road for a considerable period of time and may even ruin your business.
Third Party Fire & Theft
This provides you with the same level of coverage as Third Party only but also protects you in the event your vehicle is stolen or burnt. This is usually an option taken up by drivers with a lower cost vehicle since it is cheaper than Fully Comprehensive insurance. While this is a better option for private hire drivers, it may not be enough if you own/operate more than one vehicle.
Fully Comprehensive
Fully comprehensive private hire insurance provides the highest level of coverage for motorists which is why it is the most expensive policy. It includes cover for any damages sustained by your vehicle and others involved in an accident and protects you if your vehicle is stolen or damaged by fire. You should not assume Fully Comprehensive policies are all the same as some allow the policyholder to drive other vehicles or operate a vehicle overseas.
The type of Fully Comprehensive policies available vary depending on each individual company. For example, certain organisations will offer added extras such as breakdown cover, courtesy cars and legal expenses cover as part of the policy whereas other insurers will charge an additional fee if you want this added protection.
For most private hire drivers, the aforementioned features are important so you need to find out at the beginning if they are available before committing to a purchase. Otherwise, you could be wasting money on cover that is virtually useless to you. In some cases, you may find it cheaper to purchase a separate breakdown cover policy than include it as an extra on your Fully Comprehensive policy.
Breakdown Cover
If your private hire vehicle breaks down, you could be in a tight spot unless you have Breakdown Cover. There are two types of this form of coverage; the first is an automatic standard policy where you pay an annual fee and this guarantees you a specified number of callouts each year. This is a good choice for private hire firms; especially those with a number of vehicles.
The other option involves the insurer using a local company and you will have to pay upfront for call-out and recovery of your vehicle. You then claim the money back from the insurer; this is a good option if you have a small fleet or operate as a one-man band.
Taxi Fleet Insurance
If you operate a private hire firm with a number of cars and drivers, finding a suitable policy can be a real headache. This is where sensibly priced Fleet Insurance can lend a helping hand. This is a specialist form of insurance for those who operate a minicab or minibus company.
Most Fleet Insurance policies will cover 3-500 vehicles and offer limited or unlimited mileage options on the policy. It is also possible to purchase a ‘mixed vehicle’ policy which covers you if your business involves a mix of minicabs and minivans for example. Generally speaking, you can save a substantial amount of money on such policies if you have experienced drivers under your employ. If certain drivers have built up a large No Claims Discount, you could save up to 60% off the existing price.
Additional savings are possible if some of your drivers have held their local authority badges for a long period of time. You can also expect the cost of Fleet Insurance to fall if you have drivers with Pass Plus qualifications, security on their vehicles and secure parking when the vehicles are not in use.
Public Liability Insurance
This is seen as an extremely important form of private hire insurance; this is especially the case if local authority work or a council contract is involved. For example, a firm that has a council contract to take children to school each morning is legally liable for the health and safety of the children until they have been placed in the care of the school.
In the event of an accident in the above scenario, you could be forced to pay out a lot of money if you don’t have Public Liability Insurance. Please note, if you drop a child across the road from their school and they are involved in an accident crossing the road, you will be held responsible. In an era where liability and compensation claims are becoming increasingly common, it would be wise to take out Public Liability insurance.
Other Considerations
Shopping around for any form of car insurance is important but it is even more essential when looking for private hire insurance. As well as driving more miles than typical motorists, private hire drivers also operate in more congested conditions which means accidents are more likely to happen. Additionally, it is common for private hire firms to transport large number of passengers over long journeys and firms usually have large vehicles; all of this combines to bump up the cost of insurance.
As a result, you will find an immense difference between quotes depending on the insurer. Fortunately, you can depend on PrivateHireInsurance.net to help you find the lowest possible insurance policy and save you hundreds of pounds in the process.