What Is Private Hire Taxi Insurance?
Taxi insurance comes in many forms. One of the most common types, especially outside of the major population centres is private hire taxi insurance. There are advantages to having this insurance as well as running a taxicab business around the business model that private hire insurance is designed for.
What exactly is a private hire taxi?
In most areas, aside from city centres, taxicabs do not sit around parked on streets or drive around looking for customers. Instead, they wait in centralised depots that can be on the edge of town, near an airport or even situated in a parking structure smack in the middle of downtown London. Regardless, a private hire taxi is dispatched from this central location, goes and picks up the customer, deposits them in their location then typically returns to the depot, unless assigned another customer to pick up. The drivers, who work as private hire taxi services typically, are limited to only these prearranged pickup and deliveries and cannot pick up unplanned fairs.
Why private hire taxi insurance?
All vehicles that use public roads are required to carry insurance. Taxi services utilise specialised insurance companies that typically only provide insurance for taxi cabs and other commercial vehicles. Private hire insurance is a way to minimise the cost of doing business for the taxicab driver or company, depending on who is responsible for the insurance. The reason why private hire insurance is becoming a popular type of specific policy is because the cost of securing this type of insurance is less.
The amount of revenue brought in by a company and driver who ops to be a private hire taxi is less than a public hire but the insurance is less as well. Ultimately, the drivers and company make the same amount when everything is considered. Getting a private hire policy gives the drivers and company the same levels of coverage that a public hire policy would but the chances of needing it are actually less, which is why the private hire policy is cheaper.
Because the policy costs less, there are other benefits as well. For the new taxi service, start up costs are one of the biggest hurdles. By beginning the company as a private hire service, the required down payment for insurance is less because the policies are less. On top of this, because it costs less, the payments to the insurance company are typically required only once a month.
Many public hire policies actually require payments as often as weekly. This is especially important if the drivers are the ones tasked with the responsibility of paying their own insurance as they can budget a once a month payment rather than seeing part of every week's pay disappear and be sent to the insurance company. For either company or individual driver, there is also more room for error should the postal service lose a check that is mailed in. Instead of the policy being terminated within the week, the private hire insurance has enough time to get things sorted out.
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