Business Insurance

Can I drive a taxi with normal insurance?

Are you thinking of using your car to earn extra money by being a taxi driver? Here's what you need to know about using normal car insurance for a taxi.

The short answer is—no—you can't use normal car insurance for a taxi.

'Normal' car insurance is called social, domestic and pleasure insurance (SD&P). SD&P covers regular driving like going to the shops, taking your kids on the school run, visiting friends, going to the beach, and more. If commuting was added (that is, declared to your insurer, approved, and paid for via a supplemental premium), then regular insurance can also cover driving back and forth between home and one place of work, like an office or a job that's in a fixed location.

However, normal car insurance will not cover using your car as a taxi. For that, you need a form of hire & reward cover (H&R).

What is H&R vehicle insurance?

Hire and reward insurance is required for any private hire vehicle being used for a reward purpose at the time of the journey. This would include a customer paying for a taxi service, a pizza delivery or for a parcel to be delivered.

If a member of the public is paying (i.e. rewarding a person or business) for a specific journey that is being made, then H&R insurance is required. Taxi insurance is a form of hire and reward insurance for vehicles being used to transport paying passengers from one location to the next.

Do I have to tell my insurer I'm using my car as a taxi?

Yes, it's very important to be honest with your insurer about how your vehicle will be used with regards to your occupation, otherwise you would be breaking the terms and conditions of your policy.

All insurance is priced based on risk, and using a car as a taxi introduces additional risk that must be paid for.

If a driver disobeys the terms and conditions of their policy, for instance by using a vehicle as a taxi when this has not been declared to the insurer and covered and paid for properly, then their insurance can be invalidated. That means if you cause damage to another party, you could be personally liable.

In addition, the penalties for driving without correct insurance include a fixed penalty of £300 and 6 penalty points, and if a case goes to court then you could get an unlimited fine and be disqualified from driving—in some cases, the police can seize the vehicle and even destroy it.

Does my car insurance cover taxi driving?

Anyone uncertain if their motor insurance covers them for the purpose of their journey (e.g. taxi driving), should check the terms and conditions of their insurance certificate before heading out. Alternatively, you can contact your insurer for guidance.

Get taxi insurance

If you want to use your car as a taxi, you'll either need to get a new annual policy to cover your SD&P and H&R driving (you can see how much this will cost by clicking below to get quotes) and cancel your existing SD&P cover. Or you'll need to get a supplemental 'top-up' or 'pay-as-you-go' H&R policy, like the one offered by Zego. However, a lot of SD&P car insurers say that using a vehicle as a taxi, even if it's covered by top-up H&R cover, goes against their terms and conditions. If your insurer doesn't allow it, this won't be an option for you. Read more about which companies accept Zego here.

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Erin Yurday

Erin Yurday is the CEO, Co-founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.

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