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Private Hire Insurance

The private hire insurance is a specialty type of cover to financially protect those that take third party clients to their destination as a hire for reward type of service. This hire for reward taxi service is not for operators of the black cabs or others that can be called over from the curb, but for operators that have pre-booked clients or part of a shuttle service where clients can call for their services online or over the phone.


What is Hire for reward?

Hire for reward is self explanatory, your as a driver are reward food being hired to drive a passenger from A to B or deliver goods from A to B. Hire for reward applies to both taxi drivers and private hire drivers.

What is private hire insurance?

Private hire insurance is an insurance cover for drivers that provide a driving service, but it must be pre booked. Remember a taxi can be hailed, but with private hire it must be booked. Subtle, but it is the difference that distinguishes private hire from taxi driver insurance. A good example of private hire service is Uber.

Who is required to have private hire insurance?

Those operators of any hire for reward vehicles that can’t be called from the curb are required by law to have  PHV insurance. This includes operators of private chauffeur companies and on call taxis along with Uber and other rideshare services. Because Uber was instrumental in starting this disruptive private hire booking service the cover is often referred to as taxi insurance for Uber drivers.

Since every private hire operator is different than the next one, each policy is tailored made to meet their specific needs, budget and requirements.

What is required by law for private hire insurance to contain?

Commercial vehicle comprehensive or third party only vehicle cover is required by UK law.

This area of cover is called road risk. This is cover for when the vehicle is involved in an accident. When you are at fault only the other vehicle is covered with third party. With comprehensive, both vehicles are covered along with the passengers possessions independent of who is at fault.

What is optional for a PHV insurance policy?

There are three main areas of additional cover a private hire operator can have to help ensure their business can remain operational independent of the obstacles that are encountered. These three items of optional cover include breakdown assistance, public liability and fleet covers. Each of them has multiple layers of cover so the private hire operator can have the coverage they need that fits their budget.

  • Breakdown cover for all levels of coverage will include having a mechanic attend to your vehicle on the road when it can no longer move forward. The towing of the vehicle has several different levels of cover to choose from as does the onward travel for the operator and their passengers.
  • Public liability is the cover to add if you were only going to add one of the optional covers to your private hire insurance policy. This is protection against a lawsuit by a member of the public who files a claim against you or your service. Without this cover, you will be personally responsible for all legal fees and settlement if the claim against you is found to be valid.
  • Fleet insurance is a very good way to lower the costs of the vehicles a business operates when they have 2 or more being used as private hire for reward service. Nearly all insurance firms provide a discount for adding vehicles to a policy once one is covered by them with vehicle insurance.

How much does private hire insurance cost in the UK?

The price will depend on a number of factors, most of which are used to determine the costs off standard car insurance, example the drivers history of driving and age.

The driving records include involvement with accidents, both the drivers fault and when just a victim. Also included are the number of road violation summons issued to the driver. The more activity in these areas, the higher the insurance premiums will be.

The criminal record of the operator also influences the cost of the insurance premium. This includes both drink driving offenses and felonies. When they are present the cost of the premiums goes way up.

The vehicle value and its maintenance records also play a part in determining the cost of the insurance premium. The vehicles with the highest risks are new vehicles and old vehicles that have been maintained poorly.

While there is no ideal vehicle, one that is about 5 years of age with a good maintenance record is a good choice to help control the cost of the policy.

Why is hire and reward insurance so expensive?

The key reason is that you will be covering many more miles that a traditional driver. Add to this working in bad weather conditions, late at night and working within time constraints. All these just make you statistically a higher risk to the broker and this is reflected in your premium. However, it can be reduced as we have detailed below.

How can the cost of private hire insurance be lowered?

  • An easy way to lower the cost of your private hire insurance premium is to pay it annually. When payments are made, there is interest that is incurred on the unpaid balance each month.
  • Having a black box and or a dashcam installed in the vehicle is a positive way to prove the operator is driving safely and within the law.
  • The security of the location where the vehicle is parked when not in use is also a factor in the cost of the premium. When this location is in a locked facility like a shed or garage, the insurance firms will look at it favorably.

Should you get multiple quotes?

The only possible way to compare the different private hire insurance is to request multiple quotes. The quotes can be to several different insurance brokers or you can submit different criteria to the same broker. The difference in the criteria can be the focus on price for one, coverage for the next and a balance of the two for the third one.

With multiple quotes you will be able to look at all three and see which one offers the best value for what is included in the policy.

Optional coverage that should be highly considered is public liability. This is protection that protects you against third party claims

The breakdown cover is another  option to consider. Not only will aid be sent to assist you with the problem, but your clients can be taken to their destination which will keep your reputation as a reliable driver intact.

PHV insurance is a requirement by the UK government for anyone that can be called to take a client to their destination as a hire for reward service. 

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