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Auto Insurance for Taxi Cabs [2021 Update + Rates]

Things to remember...

  • Auto insurance for taxi cabs is required for those who wish to operate a professional transportation service.
  • Car insurance for taxi cabs averages between $416.66 and $833.33/mo.
  • Taxi insurance rates and coverages can vary depending on if you get a commercial auto insurance policy and hire drivers versus using your personal auto insurance policy.
  • Taxi insurance can be very costly and comes with unique rules, requirements, and coverages recommended beyond the minimum requirements in each state.

Driving a taxi cab can be a very rewarding and even lucrative experience. Not all cab services are big businesses with a huge fleet. There are smaller companies with only a few cars.

Regardless of which type you belong to, you’ll need much more coverage than the minimum car insurance requirements in your state for your taxi.

Purchasing a specific policy designed for affordable auto insurance for taxi cabs can be done and should be done only after carefully exploring a variety of quotes.

Compare quotes today for cheap taxi insurance by entering your zip code into our free comparison tool.

Table of Contents

How is taxi commercial auto insurance different from personal auto insurance?

A non-commercial driver has a bit more freedom when it comes to acquiring insurance. Those seeking insurance coverage, however, have a higher bar they must reach.

Certain rules exist for taxi professionals. Drivers are required to meet certain conditions in order to be approved for coverage.

Anyone who does not meet those conditions cannot receive taxi insurance. No one has a right to be employed as a taxi driver. That is just the way the law works.

Age requirements are also in place. The driver must be a minimum of 25 years old and standard approval for coverage is cut off at 65. A person over the age of 65.

Drivers over the age of 65 could still be approved for insurance coverage, but they will be required to take a medical examination.

Infractions on a taxi driver’s record can do more than increase his or her premiums. After a certain threshold is met, then the driver becomes absolutely ineligible.

Consider that a major reason to follow all traffic laws at all times. Insurance coverage may hang in the balance.

How much is auto insurance for a taxi company?

The National Academies of Sciences, Engineering, and Medicine reports what the average auto insurance rates paid for taxicabs were. In 2013, the average was, per cab:

  • $5,632- fleets of less than 25 vehicles.
  • $6,475- fleets of 25 to 99 vehicles
  • $8,192- fleets with 100+ vehicles

Why is taxi auto insurance so expensive?

There’s just so much that could happen to a very frequently used vehicle. The chances of damage to the taxi are way higher than a typical personal vehicle.

With added business interruption coverage, money may be paid out when a taxi is not on the road. So, if the vehicle is involved in an accident and off the road for five days, loss of revenues might be procurable in whole or part for those five days.

How does commercial auto insurance work for taxi cabs?

An entrepreneur may simply own one taxi and pick up fares on a full-time or part-time basis. In a lot of ways, driving a cab is like driving a normal car, but you need different auto insurance for your business car.

What is the average day like for a NY taxi driver?

Just as a regular driver would take friends or family to destinations, a cab driver brings his/her fares to their destination — for a fee.

As is the case with a standard car, a taxi cab needs insurance. Actually, a taxi can require special and more comprehensive insurance.

A reliable and affordable taxi insurance policy could keep a driver or company in a very safe place if an accident occurs. Getting the best policy should always be a major priority.

The United States Bureau of Labor Statistics reported that there were 50,250 taxi and limousine drivers in the U.S. in 2019.

Taxi and Limousine Driver Population and Wages in the United States
Taxi and Limousine
Driver Statistics
Employed drivers50,250
Average hourly wage$15.14
Average yearly earnings$31,490

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All those taxis need coverage. What insurance do you need for a taxi?

Any insurance purchased for a car primarily used for business falls under the category of commercial auto insurance. A standard auto insurance policy won’t cut it when using a car for business operations. Such a policy would simply be invalid.

Business can be conducted in a vehicle in many ways. Policies have to match the business endeavor.

A car provided to employees who drive to meet clients for sales jobs would require commercial car insurance, but a taxi policy would be far more involved. Taxi cabs come with more risks.

The powers-that-be do keep tabs on the following:

  • taxis
  • taxi-related accidents
  • taxi-related insurance claims

Taxi insurance in the state of New York is pretty strict. New York City takes insurance issues related to yellow cabs so seriously, the NYC Taxi & Limousine Commission allows for the requesting of vehicle insurance information for the public. Taxi or limo insurance is required for all delivery drivers.

A driver may be asked to do the following things all at once:

  • travel to an area he or she is not familiar with
  • drive so during rush hour when other drivers on the road are not considerate or careful
  • deal with the annoying distraction of a loud, belligerent passenger

The chances of an accident increase due to the distractions. Driving in the congested sections of the city when scores of people and cars are rushing around could lead to accidents even when the person driving the taxi cab is incredibly safe and careful.

What kind of taxi cab insurance do I need if I hire drivers?

If you would like to hire additional drivers, you can expand into a multi-driver policy so that all of your hired drivers have the same coverage when they are working.

Having employees brings greater responsibilities, so a company liability insurance policy would be good to consider. This type of policy will provide coverage for the following instances:

  • claims of sexual harassment
  • claims of discrimination
  • claims of wrongful termination

Speak with your auto insurance provider about expanding your coverage so that you and your employees are protected.

Are there commercial taxi auto insurance discounts?

When gathering quotes from several different auto insurance companies, they may not factor in all available discounts. Before purchasing a policy online, be sure to call a representative to inquire about additional discounts.

Even though the purpose of your vehicle is to transport clients, some of the same factors are considered to determine your insurance rates.

Previous Commercial Auto Policy Ownership

Insurance companies, just like employers, like to see previous experience to make a good judgment of how you will operate your business. There may be a discount for having previous experience managing and operating a business vehicle or multiple vehicles with a commercial auto insurance policy.

Homeownership and Marital Status

Just like any other driver, homeownership and being married shows the insurance company that you are a responsible person and therefore less likely to file a claim because you are a safer driver. This presumption can seem a bit discriminatory, but if it means getting an additional discount, it doesn’t hurt to ask.

Plans for Advancement in the Field of Driving Services

Becoming an executive driver may be a viable alternative for you if you would like to save on commercial auto insurance costs because these policies are cheaper if you are an executive driver or chauffeur.

Can you use your personal car as a taxi?

Can any car be a taxi? Many taxi businesses have been taken away by rideshare services.

Services like Uber, Lyft, and Via have become super popular. If taxi drivers need special insurance, do Uber drivers need special insurance?

Rideshare drivers are supposed to have additional rideshare coverage, and their personal insurance won’t cover damages that happen when they’re driving on the job.

Therefore, it’s important to understand the difference between standard commercial insurance and rideshare insurance.

Delivery drivers for services such as Instacart and DoorDash are also required to have special insurance. It’s not just professional taxi drivers.

How does personal auto insurance work for taxi cabs?

The rules and requirements for taxi insurance do vary. In certain regions, those requirements continuously change. What are some taxi cab insurance requirements?

The state of Pennsylvania, amazingly, has not changed its minimum coverage requirements for taxi cabs since 1974. The exact coverage amount is “$15,000 per injured person and $30,000 for all people injured in an incident.”

Those are very low amounts, amounts much lower than what would be found in other regions. Other places aren’t usually as low as Pennsylvania. It absolutely depends on where you live.

Taxi cab drivers do need to realize that just because the state minimums are low does not mean it would be wise to buy the lowest amount of coverage.

If you’re looking for cheap taxi insurance in California, Idaho, or any other state, the best place to check is going to be your local government website or insurance provider.

Who knows how bad a situation could turn out to be in the advent of a very serious accident. The idea behind driving a taxi is to make money. The wrong insurance policy could cause a taxi driver to become bankrupt. That is no exaggeration.

Regardless of what the state minimums are, a taxi driver should take steps to look for the best possible coverage that takes into consideration the financial risks one could be exposed to.

In certain regions, the requirements for minimum coverage might be huge. A major city comes with major hazards. Insurance coverage could end up being very costly in such a location. Once again, comparison shopping is critical in order to buy the best insurance at the best rates.

What are other types of auto insurance coverage taxi drivers should purchase?

Taxi insurance must cover a number of different liabilities including:

  • personal injury protection (PIP)
  • property damage liability
  • medical cost insurance
  • uninsured/ underinsured motorist

These coverages would be common with many other standard auto policies. Certain unique types of coverage exist with taxi insurance.

Accessories insurance is somewhat akin to personal property coverage found in a homeowner’s policy. Accessories insurance could protect against damage or theft to the cab’s meter, dispatch communications system, and more.

One interesting component of coverage would be business interruption coverage. The homeowner’s insurance comparison would be the loss of use of the property.

The first step to finding cheap auto insurance rates for taxi cabs is to enter your ZIP code below and compare.


  1. https://www.nap.edu/read/21875/chapter/9
  2. https://www.bls.gov/oes/current/oes533058.htm
  3. http://www.puc.pa.gov/consumer_info/transportation/motor_carrier/limos_taxis_movers.aspx

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