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What’s The Difference Between Taxi Car Insurance and Typical Car Insurance?

What’s The Difference Between Taxi Car Insurance and Typical Car Insurance?
October 2, 2017 OTTIS Blog
taxi car insurance

If you are a taxicab driver, you can no doubt tell some wild stories, from odd passengers to near-miss traffic adventures. So, it comes to no surprise that you need taxi insurance in addition to regular auto insurance to cover all the possible mishaps that come with driving a taxi.

Even with the rise of Uber and Lyft, the taxi and limousine business is steady. The industry will continue to grow. This means more taxis, more passengers, and, unfortunately, more opportunity for accidents.

If you drive a cab, you need taxi car insurance. If you own a taxi company, then you need taxi insurance for your fleet in addition to regular car insurance. A standard vehicle policy is not enough to cover a taxi driver for the high expenses an accident may incur.

The Difference Between Taxi Car Insurance and Car Insurance

The difference lies in what coverage is included in the policy. Auto insurance covers claims that result from an accident. It does not cover general claims relating to a company’s business practices.

Taxi insurance covers the vehicle, the driver, and any passengers or bystanders should an accident occur. Because of this, the premium for taxi insurance is usually higher than car insurance.

Taxi insurance also covers vandalism, theft, fire, and damage from accidents that are the company driver’s fault. You can also buy a rider for business interruption coverage. This pays the company while it cannot operate its taxis.

Some states may require taxi companies to buy a surety bond. They may also need a workers’ compensation insurance policy to cover any injuries that keep your drivers from operating the taxis.

Your company should have both auto insurance and taxi insurance.

Qualifications for Taxi Car Insurance

Your local Department of Motor Vehicles (DMV) sets the requirements for taxi insurance. The requirements can vary by state. In all states, the taxi company must meet minimum standards to qualify for coverage.

Taxis must be fare-based vehicles used by the public. The company must maintain all its taxi, and it must keep a written maintenance log. The log includes the service performed and the date of service.

All drivers must have a valid driver’s license and at least two years of driving experience in the United States. Drivers should be between 25-65 years old and free of any physical conditions that affect their ability to drive.

Public Hire and Private Hire Insurance

The taxi company will insure the vehicles. Though, individual cab drivers must buy their own insurance to protect themselves against damages and injury. The two types are private hire and public hire insurance.

Private hire insurance is for drivers and vehicles that take passengers based on booking. They do not operate as taxicabs. Examples are limousines and “livery cabs.”

Public hire insurance is for drivers and vehicles that pick up riders on the street. They can stop when hailed and use signage to signal availability. These are your traditional yellow cabs.

Do Your Research

For cab drivers and companies, the vehicle itself is the heart of your business. Without it, all business stops. Having a strong taxi car insurance policy can ensure your business continues even when the unexpected happens.

Like any insurance policy, shop around for the best quotes, and continue to shop at renewal time each year.

Feel free to contact us for a quote today.

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