Taxi Insurance is in the “Hard Cycle” market at the moment (October 2013) and, as many taxi and minicab drivers will testify, premiums are not at their lowest. So much so that some drivers wouldn’t mind paying the insurance premium of a newly qualified seventeen year old, so high is their premium! Unlike the young driver market, minicab and taxi insurance has fluctuated as insurers enter (or in some cases, re-enter) the market in a bid to drive premium volume in the hope that they have as few claims as possible and complete each year relatively unscathed. This in turn pushes premiums down to the point where insurers find themselves in an unsustainable situation and are forced to exit before losses escalate. Rates then rise to stem losses and then, after memory lapses, insurers then look at cheap taxi insurance as an attractive proposition then the cycle starts again….

So, which route is best for your typical taxi/minicab driver? Pay for an annual policy or just pay on a rolling monthly basis? Individual circumstances are different of course and each driver will make their own mind up to suit their own circumstances. To maximise savings and for sustainability, the driver must ask two questions:

1. Is my career that of a taxi driver?
2. Will be driving permanently, save a two week holiday and weekends, much like your average 9-5er?

If the answer is yes to both then almost certainly an annual policy (that can still be paid on a monthly basis) is for you.

The reason is simple. An annual policy builds a track record and accrued TAXI no claims bonus. The premium will not be as palatable as a monthly policy in the first year but many drivers pay sub £1000 annual premiums when 4 years or more no claims bonus has been earnt which can also be protected much like a private car policy. The writer believes that monthly premiums have only ever increased — the savings over a 10 year period are substantial. Essentially, when asking “How do I obtain cheap minicab insurance?”, the answer is almost always annually.