Auto Insurance for Taxi Cabs [2022 Update + Rates]

To keep themselves, their passengers, and other drivers protected while on the road, taxi drivers need specialized taxi insurance.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Jun 29, 2022

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Things to remember

  • Due to the high-risk nature of taxi driving, monthly rates can average between $416 and $833, far higher than standard rates

  • Taxi drivers are held to a higher standard, so policies must include third-party liability, personal injury, medical payments coverage, and uninsured/underinsured motorist protection

  • You could save money by bundling different types of coverage under one insurer

Whether you run taxi services with just one car or own a small fleet, you’ll need to make sure you have sufficient taxi insurance to run your business. Auto insurance for taxi cabs has stricter requirements and higher monthly rates than regular car insurance because driving a taxi is inherently risky.

Here, we’ll discuss how you can adequately insure your professional transportation business and save money on insurance.

What are the taxi insurance requirements?

The average driver only has to adhere to their personal policy’s minimum state car insurance requirements. Taxi drivers, however, must have a commercial auto insurance policy, since taxis are used for business purposes. A commercial policy protects the business as a whole and can cover larger liability amounts, multiple cars, and multiple drivers.

Your commercial taxi insurance policy should include:

  • Third-party liability coverage
  • Personal injury protection
  • Medical payments coverage
  • Uninsured/underinsured motorist coverage

Your third-party liability coverage minimums will depend on the state where you drive. 

For example, New York taxi drivers must have a minimum of 100/300 coverage, which is $100,000 to cover the personal injury of one passenger, and $300,000 to cover the bodily injuries of two or more people. 

Nevada, however, requires even more coverage. If you work in Las Vegas, you’ll need a 250/500/50 policy, which includes higher bodily injury limits and $50,000 of property damage coverage.

There are additional requirements beyond the minimum insurance, including:

Age Restrictions on Taxi Insurance

Each insurer may have its own age restrictions. In general, a taxi driver must be between 25 and 65 years of age. The age restrictions are in place to mitigate risk since teenagers and older people are the riskiest drivers. A person over 65 may need a doctor’s approval prior to receiving a taxi insurance quote.

Clean Driving Records

Any points on a driver’s record can increase their taxi insurance rates. These include parking violations, speeding tickets, DUIs, accidents, and more. 

However, it’s even more imperative for taxi drivers to uphold the law. If a taxi driver receives too many points on their record, they may become ineligible to receive taxi insurance, making it impossible to do their job.

Rideshare Coverage as Taxi Insurance

You can use your own car as a taxi. However, your personal auto insurance policy won’t be sufficient enough to cover passenger liability. It’s also likely your auto insurance company forbids using a personal insurance plan for business purposes. In fact, your insurer could cancel your policy altogether if they find out.

If you plan to be a rideshare driver or use your own vehicle as a taxi, you’ll need to buy additional rideshare coverage. 

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How much does insurance for taxi cabs cost?

Average standard auto insurance rates for a personal auto policy are $86 per month. However, insurance can average between $416 and $833 per month for a taxi.

Multiple factors will determine what your taxi insurance rates will be:

  • The type of coverage you choose
  • Your location
  • Your driving record
  • The makes and models of the vehicles you’re insuring
  • Your business’ hours of operation
  • Your total mileage

You’ll also get different rates depending on how many vehicles you’re looking to insure. The table below breaks down monthly taxi insurance rates by fleet size:

Average Monthly Taxi Insurance Rates for Fleets

Number of Taxis

Average Monthly Rate per Taxi

One to 24

$469

25 – 99

$539

100+

$682

Taxi insurance is much more expensive than a personal policy because of the high-risk nature of taxi driving. Taxis may have to deal with congested and rush hour traffic, or even belligerent customers and other drivers, increasing the likelihood of an accident. 

Plus, some states are statistically more dangerous and have a higher rate of traffic-related fatalities. It will cost more to insure your taxis in those states, so keep that in mind when you’re hunting for quotes.

What other types of insurance do taxi drivers need?

Even though it’s not required, adding collision and comprehensive coverage to your commercial taxi insurance policy is smart.

Taxis use a lot of miles in high-traffic areas, so if a collision occurs, a collision policy can ensure damages to your car are covered. In addition, if you live in an area with high rates of theft, natural disasters, or other non-collision incidents, a comprehensive plan can further protect your fleet.

Taxi businesses also need general liability and workers’ compensation insurance. If you’re a relatively new business, you’ll be subject to higher rates. Insurers will offer you decreased rates when you and your drivers gain more experience and can show a long history of safe taxi driving.

You may also want to consider business interruption coverage if your insurer offers it. For example, if one of your taxis is out of commission after an accident, you’re losing precious income, especially if you have a smaller fleet. Business interruption coverage can help offset the losses while your taxi is undergoing repairs.

Whatever coverage you choose, make sure it’s enough. Insufficient insurance could lead to serious financial blows. If an accident is bad enough to go beyond your policy limits, you could risk bankruptcy.

How to Save Money on Taxi Insurance

The easiest way to save money on taxi insurance is to buy affordable and reliable vehicles. Cars that are cheaper to make and have robust safety features will cost less to insure. 

You can also lower rates by dropping coverages you don’t need.  For example, you can drop comprehensive coverage from your policy if you have money set aside for emergencies, such as theft, fires, floods, or other miscellaneous damage.

Discounts can help reduce your rates tremendously. Here are some of the most commonly-offered discounts that could be particularly useful to a taxi company:

  • Multi-Vehicle Discount. Put your fleet of taxis on one policy.
  • Business Owner Discount. Take advantage of conducting professional services.
  • Executive Driver Discount. Reduce your rates when your drivers get certified as executive drivers.
  • Defensive Driver Discount. Take a defensive driving class to get a discount.

You may also be able to bundle coverage if you own a taxi business. You’ll need business coverages, like general liability and workers’ compensation insurance, on top of your auto insurance, but getting it all from one company can earn you discounted rates.

There are plenty of other discounts for good driving, paperless billing, loyal customers, homeowners, and more. Any quote you receive may not include discounts, so make sure you check out what discounts any given insurer offers before you buy auto insurance.

If you need to lower your monthly rates, you could consider increasing your deductible or lowering your limit. This could potentially be more expensive down the line if you or one of your drivers gets into an accident, but it’s an option if your monthly payment is tricky to manage.

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The Bottom Line on Insurance for Taxi Cabs

Even with discounts and deals, taxi insurance can be quite expensive, making it all the more important to get multiple quotes and weigh your options. After reading this article, you should understand the basic requirements for taxi insurance and be able to make an informed decision moving forward.

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