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When you think of a taxi cab, you might think of the traditional yellow cab, but they are not the only vehicles that are considered taxis for the purpose of taxi auto insurance. Other car services that are involved in the transportation of passengers from one place to another also qualify as taxis, including those that use personal vehicles and those that use company-owned vehicles driven by employees.
All of these vehicles have one thing in common: they all require commercial auto insurance for a taxi business or service.
If you drive a taxi, direct insurance for your vehicle or fleet can get pricey. Enter your ZIP code in our search tool to compare commercial and personal taxi auto insurance rates near you. Comparing rates will help you find quality insurance products at competitive rates so that you can have your peace of mind and your budget intact.
Commercial vs. Personal Insurance: What is the difference?
The first thing you will notice about taxi commercial auto insurance is that it is priced higher than personal insurance, and in some cases, the difference can be very large indeed. Taxi auto insurance quotes will be higher than personal insurance due to the risk. That is because taxi drivers are on the roads more, will require more maintenance services, along with other factors that increase their insurance risk.
Take a look at this table comparing average annual personal auto insurance rates vs. fleet insurance rates to see how taxi auto insurance costs can be higher.
Commercial and Personal Auto Insurance Rates
| Auto Insurance Type | Average Annual Auto Insurance Rates |
|---|---|
| Fleet Auto Insurance | $1,000-$1,500/car |
| Personal Car Insurance | $1,029 |
| Average Annual Rate by Commute Mileage | $3,996 |
The national average for standard auto insurance comes from the National Association of Insurance Commissioners (NAIC), an organization that provides annual auto insurance rate reports.
Your standard auto rates could be more expensive. However, if you plan to use your vehicle to rideshare, like a taxi, you would pay up to $4,000 for auto insurance. If you’re part of a Transportation Network Company (TNC), your company will have fleet insurance, which costs about $1,000 per vehicle. (For more information, read our “Buying Fleet Auto Insurance: What You Need To Know“)
According to New Jersey state law, the minimum requirement for driving for a TNC is approval to drive from that company. Ridesharers will need auto insurance, though.
There are several reasons for this:
- There are higher limits that are allowed on commercial insurance because there is a higher amount of risk involved.
- Commercial policies typically have standard deductibles, which are usually higher than those offered for personal insurance.
- Commercial car insurance may cover some of the loss of income in the event of a covered loss of a vehicle.
You only need commercial insurance on your own personal vehicle if you are regularly driving others around for a fee and if you advertise your vehicle for such a service. If you provide any type of taxi services, then you need proper coverage. That proper coverage is going to be in the form of a taxi insurance policy. This should not be confused with auto insurance for professional drivers who drive their own vehicles under a company name.
For instance, an Uber or Lyft driver may be able to get a different type of auto insurance coverage than those of a taxi cab. Some companies offer a flexible type of insurance coverage that allows the driver to pay a much lower rate when they are driving their car for personal use rather than as an Uber or Lyft driver. This can be helpful for ride-share drivers, especially if they are in one of Uber and Lyft driver’s top-earning cities. It is important to make sure that you’re aware of the type of insurance you need to be legally covered to drive in your state. Insurance carriers also have taxi insurance requirements to be aware of.
Watch this video to learn more about ridesharing.
What if my cab is company-owned?
If you are a driver that works for a taxi company, you will typically go to work, pick up a cab that may or may not be marked or designated as a taxi cab, and then pick up fares for your scheduled shift. While you do require taxi insurance coverage, in this case, it isn’t your personal responsibility.
The company will cover the cost of commercial insurance on that vehicle, which should also cover you as the taxi driver in case there is an accident that involves injury to you, your passengers, or any other drivers. In these cases, taxi insurance companies will provide a fleet policy.
However, some companies may also require you to carry your own personal insurance as a driver of a vehicle while you are driving their cab. Your own auto insurance should cover that requirement unless you have very limited coverage. Most insurance covers you as a driver in any vehicle.
Always check with an agent to be sure that your coverage is valid for another vehicle, or you may need to consider an upgrade.
What if I’m the company owner?
The more vehicles that you must cover, the more you will want to search for the best coverage at the best rate. Commercial insurance coverage, especially for taxi cabs, may have different requirements from state to state, so it is important to speak to a local agent about your coverage needs and then compare rates so that you are paying the lowest premium for the coverage you need. It isn’t impossible to get cheap taxi insurance, even if your company is quite large.
Some of the requirements that you may be faced with include:
- Coverage for all drivers.
You will have to list everyone that is authorized to drive your cabs in a professional capacity.
You may also have to list drivers that may be driving other vehicles even if they are only driving for recreation or personal needs.
- Garage facilities.
- Some companies will require those vehicles that are listed on the commercial policy to be kept in a garage or other structure to protect the vehicle against damage.
- There may also be requirements for security at the garage so that vehicles are not easily removed by unauthorized people.
Single Policy vs. Multiple Policies: Which is better?
For the commercial cab company, the commercial taxi insurance is usually written for the entire company rather than per vehicle. The insurance company may use an average value of the cabs to determine the coverage amounts and then will use the highest rate for the drivers. Doing it this way could help you save on your taxi insurance rates.
This can be different from agency to agency and each policy is written specifically for the company in question, so always discuss needs and coverage levels with your agent.
Having multiple policies can also be beneficial if you have a wide range of vehicles with varying levels of condition or value. This would allow you to get cheaper taxi insurance on the vehicles that were lower in value.
However, if most of your taxi cabs are in the same or similar condition and come from the same model year (with one or two years of fluctuation) then it is easier to just use a single blanket policy that covers the cars themselves and the drivers if you’re looking to save on your taxi insurance costs.
These policies will also cover the passengers in the vehicle plus any other vehicles or other property damaged in the event of an accident.
Your taxi cab insurance should also cover the vehicles in the event of damage to the garage itself, for instance, during a tornado or another type of natural disaster.
Where can you get a taxi insurance quote?
The most important thing that you can do is to get several comprehensive quotes so that you can compare coverage, pricing, and deductibles. You can also compare customer service and other factors while you are at it.
Remember, commercial insurance will be considerably more expensive than personal insurance, so be prepared for that. You will also need much higher limits for the various types of coverage as well. You will need to be sure that you are covered not only to satisfy state requirements but also to protect your company and your investments.
A loss is not only going to affect you professionally but can also cause issues on a personal level, especially if you do not have the insurance to cover that loss. An injured person could possibly sue you to make up for their own losses, which could hit your personal bank account if your business cannot cover the costs.
It is always best to protect yourself as much as possible with the right level of commercial auto insurance.
You may have asked, “Is there taxi insurance near me?” If you want to find affordable taxi insurance right now, enter your ZIP code in the FREE comparison tool below.
Do you have more questions about cheap taxi insurance?
Let’s recap what we’ve already covered. Commercial auto insurance for taxi service is much different than standard auto insurance, and the average cost for taxi cab insurance varies from state to state. Taxi commercial auto insurance cost depends on the service and number of cars. Do you still have questions on how to buy taxi auto insurance? Check out the FAQ below.
#1 – What insurance do I need for a taxi?
Taxi cab insurance requirements are the same as state minimums. Coverage limits will depend on where you live. Therefore, the average cost of taxi cab insurance would be the same as liability insurance in your home state. Taxi cab insurance brokers are available to help.
#2 – How quickly can I get auto insurance?
You can get auto insurance in 15 minutes or less. The internet has made it a lot easier to grab a quote and pay online. Taxi service auto insurance may take longer due to different underwriting requirements.
#3 – Can a person get auto insurance without a car?
Yes. It’s called nonowner auto insurance.
#4 – What cars make the best taxis?
Sedans and minivans are excellent vehicles for taxis. They’re fuel-efficient and versatile.
#5 – How can I insure a taxi for private use?
You can use a commercial vehicle for personal use, but an auto insurance company may not cover property damage or bodily injury if its investigation finds negligence on the part of the driver.
#6 – Is there low-cost taxi insurance in NJ?
Low-cost is not available for taxi service in NJ. Low-cost insurance is only available to residents who use their vehicles for personal use. Affordable taxi auto insurance is best found by shopping around.