Purchasing Taxi Car Insurance (Rates + Best Advice)

The average taxi car insurance rates are $467-$683 a month, depending on fleet size. Auto insurance for taxis must meet state requirements, and your personal insurance won't cover you when driving a cab.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you need to know...

  • Taxi drivers need car insurance specific to their occupation, but they also need it for their personal vehicle
  • First-year drivers will pay a high price for insurance
  • As a driver get more experience, they can expect to see their premiums decrease
  • Taxi car insurance costs an average of $467-$683 a month, depending on fleet size
  • Check with your local government site for required liability limits

Before you hop into that cab and head over to pick up customers at Uptown at night, South Bronx, or Harlem, be sure that you’re covered for liability, collision, and uninsured/underinsured motorists.

We’ve got the best tips for purchasing taxi car insurance in a big city, with lots of data that’ll help you make the decision that’s best for you. We know you want to find cheap car insurance that still offers good coverage and makes sense for you.

You may not be sure where to start or what’s required when buying auto insurance for a taxi business, but we can help. Read on to learn everything you need to know about how taxi insurance costs differ from regular car insurance.

What is the best way to shop for car insurance on your yellow checkered car? How do I find taxi insurance near me? One quick way is to enter your ZIP code into our free tool and get car insurance quotes right away.

What Are Basics About Taxi Car Insurance?

A taxi needs car insurance like any other vehicle driving on the open road. Insurers also look at the same factors as they would for your personal vehicle. Car insurance for taxi cars works a little differently, but the basics are the same.

The main difference is that you typically need way more coverage than you will personally. But, what is the best way to shop for insurance?

Since the market is constantly changing in car insurance, and erratically so for taxi cars, your best bet is to continually shop for better coverage.

How do you shop around for insurance? Don’t assume the company you’ve been with is the best. Insurers calculate their rates differently, and they have different discounts and optional extras.

Just know that there is a steady balance you must maintain, one between cheap coverage and obsessive-compulsive phone calls. This is why many drivers prefer working with brokers.

The savings you are getting must make all the calling around worthwhile. Some new taxi drivers quickly discover that if their insurance coverage is too expensive to sustain a profit, they will have to move to a different area, or perhaps work for a better taxi company.

Naturally, first-year cab drivers are going to face higher premium rates.

This principle is part of the territory, as drivers with less experience always pay more than those who’ve been around the block a few times.

Some taxi cab drivers say that searching for insurance online is easier than working through broker agents. It is true that online searching lets you search for competitive rates at your own pace. Online searching is also a more objective process than working with a broker who may be pushing a certain company to your favor.

Having the ability to compare cheap taxi insurance quotes is indeed a time-saver, not to mention a chance to save more money with cheaper taxi insurance.

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How Much Does Taxi Car Insurance Cost?

That’s not an easy question to answer, as there are many, many factors that go into it. But, let’s take a look at some of those factors for a taxi insurance policy and some rates for taxi drivers.

The National Academies of Sciences, Engineering, and Medicine reported the average car insurance rates paid for taxicabs. So, how much is insurance for a taxi company? In 2013, the average was:

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

What should you look for when buying car insurance, and what insurance do you need for a taxi? One thing you’ll need to keep no matter what is liability auto insurance. Knowing how this coverage offers protection and works can and save you trouble down the road.

Liability Car Insurance Coverage
Liability Coverage TypeWhat It CoversScenario
Bodily Injury LiabilityHelps pay medical expenses or funeral costs for another driver, passenger, pedestrian, or cyclist that occurs while you're drivingYou t-bone a Ford Focus at an intersection which injures the driver, who gets whiplash. This helps cover those medical bills.
Property Damage LiabilityHelps cover damages to the other driver's carThe same wreck bent in the driver's side door. This helps cover the cost of repairs.
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This is required by law in most states, anyway.

How much coverage you need absolutely depends on where you work. The commercial auto insurance of your taxi cab needs to follow the laws of where you operate. Taxi cab insurance requirements vary from state to state, and some cities have their own laws governing this. Taxi insurance in California, Florida, NJ, or NY will all differ as to the requirements. Taxi cab insurance in Michigan will differ again due to the state’s unusual no-fault laws.

For instance, the New York Taxi and Limousine Commission requires that all livery vehicles that operate in New York City must have at least 100/300 liability coverage on their taxi cab.

  • $100,000 for personal injury/ death of one passenger
  • $300,000 for total bodily injury/ death of two or more passengers

However, the Nevada Transportation Authority makes you have even higher coverage. If you’re a driver in Vegas, expect to purchase 250/500/50 liability coverage on your taxi cab.

  • $250,000 for personal injury or death coverage of one passenger
  • $500,000 bodily injury or death coverage for two or more passengers
  • $50,000 property damage coverage

Check with your local government’s websites or just your insurance agent to see what the requirements are for your state and city.

Taxi insurance covers more than traditional insurance, though a lot of it overlaps.

Taxi insurance is a little bit different than normal personal auto insurance.

Progressive notes that taxis create a different sort of insurance risk for insurers. Part of that is because they don’t use luxury vehicles, and rates change depending on a number of factors. They look at a lot of the same factors as they do for your personal insurance, like your driving record, where you work, the value of your taxi, and how much coverage you need.

Unless you have a really old cab, that’s not the only coverage you want to have. It won’t cover any of your own damages if you’re in an accident, nor does it cover theft or natural disasters. In fact, you may not have a choice. Taxi car insurance usually includes things that collision and comprehensive will cover.

It’s important to know what the difference is between collision and comprehensive car insurance claims and why both types of insurance are important.

Comprehensive and Collision Car Insurance Coverage
Coverage TypeWhat It CoversScenario
CollisionPays to repair your vehicle for damages from a car wreckYou rear-end a truck at an intersection. You're at fault, so your insurance covers the cost. Collision covers the damage to your own vehicle.
ComprehensivePays to repair your vehicle for damage caused by other eventsA tree limb falls on your car while it's parked or you hit a deer on your drive home.
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Collision covers your damages in a wreck if you’re found at fault. You don’t want to settle for only liability, or you’ll be stuck paying out of pocket if this happens.

This comprehensive car insurance guide teaches that this coverage covers things like a tree limb falling on your car, or even tools and other debris that might fall into the street. Not only that, but it’s also there to cover vandalism and theft if your car is stolen.

What if somebody hits your car and is obviously at fault, but they don’t have car insurance? That’s when you’ll need uninsured and underinsured coverage. Some states require it, but it’s always a good idea to have.

Uninsured and Underinsured Motorist Car Insurance Coverage
Coverage TypeWhat it CoversScenario
UninsuredCovers damages if you're hit by an uninsured driverSomeone runs a red light and hits your car. They're uninsured, so they can't cover the bill.
UnderinsuredCovers damages if you're hit by a driver with insufficient insurance to cover your damagesThat somebody is insured, but their coverage isn't high enough to cover all of your bills.
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It’s not unlikely that you could get hit by an uninsured motorist. According to the Insurance Information Institute (III), 13 percent of all motorists in the country are uninsured. Here’s a list by state, you can search to see how high that number is where you work.

Uninsured Motorists by State
RankStateUninsured %
3New Mexico20.8
13Rhode Island15.2
14New Jersey14.9
32West Virginia10.1
35New Hampshire9.9
37South Carolina9.4
42South Dakota7.7
45North Dakota6.8
48North Carolina6.5
50New York6.1
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If you’re driving a taxi in NYC, the states of New York and New Jersey have uninsured rates of 6.1 and 14.9 percent, respectively. There is 13.7 percent of Illinoian drivers who are uninsured, so Chicagoans have to watch out for it, too. Really, anywhere in the country has a large number of uninsured drivers, so it’s important to have uninsured and underinsured motorist coverage.

What Are Some Tips for Avoiding High Taxi Car Insurance Rates?

Why is taxi insurance so expensive and what can you do about it? Let’s look at the factors involved. Your previous driving record will help determine your insurance rates; therefore, it pays to have been a good driver your entire life. Use any company car experience in your application. Your lack of tickets or collisions will reflect positively on you.

The most difficult part of your new job will be getting past the first year of high premiums. Just think of this period as high school all over again. Yes, it’s not very cool that you have to pay high premium rates just because you’re young (or in this case, young at taxi driving).

How can I get cheap car insurance? There’s no magic button. However, rates gradually become cheaper over time, since statistically speaking, most taxi drivers make car insurance claims in the first year.

Think about buying yourself a nicer car and chauffeuring a wealthier clientele. Can any car be a taxi? Although we all have a certain image of which cars are used as taxis, most cars can qualify. Buying a new car isn’t always an option, so what else can you do?

As much as possible, eliminate potential distractions like radios, cell phones, and exciting conversations with your passengers. They may just be in town for a show or business meeting. It’s tempting to strike up a conversation and by all means, do so but make sure to keep both eyes on the road and your attention straight ahead.

This may be a matter of common sense, but when an insurance company writes your policy, only insure yourself; do not allow others to use your policy, or your rates will spike.

Drop unnecessary coverage options like fire and theft insurance; you can form your own backup plan, such as a savings account, and save by the month.

How Can Age & Experience Affect Taxi Car Insurance Costs?

How can you make your first car insurance cheaper? Lastly and, surprisingly, the best way to save on taxi car insurance premiums is to “grow up.” Statistics show that the cost of married car insurance vs single car insurance is impressive.

Those who are married and own a house are far less likely to drive dangerously. It appears that all that family investment is too much to risk when on the road, and that’s true enough to show up in the data.

If you’ve wondered, should I buy car insurance from a car insurance broker or direct from the company, you’d like to know that the insurance industry is somewhat selective about their insured drivers and prefers mid-sized vehicles. Be on your best behavior, and you will find the entire industry to be welcoming.

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What About Personal Car Insurance for the Taxi Driver?

If you’re a taxi driver, you spend all day in a vehicle. But, you’ll still have to drive around when you’re not working. Errands don’t run themselves, after all. You’ll need to get your personal car covered, and taxi driving isn’t the sort of job where you make business use of your personal vehicle. But, how much car insurance do you need?

But, how much is it?

Here are the average rates, countryside, for car insurance from 2011 to 2015.

Average Annual Car Insurance Rates by Coverage Type (2011–2015)
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These rates include high-risk drivers as well, and there are many factors that affect these rates. This does include taxi drivers, who are considered high risk.

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

Their average yearly salary worked out to be $31,490.

Taxi and Limousine Driver Employment Stats (2019)
Key InfoDetails
Employed drivers50,250
Average hourly wage$15.14
Average yearly earnings$31,490
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Taxi drivers pay an average of $1,984 a year for their personal car insurance premiums. That works out to be 6 percent of their entire yearly income.

So, a taxi driver pays $165.33 a month for their personal car insurance. Geico car insurance considers taxi driving a high-risk occupation, as do other insurance companies, which means you’ll pay a premium. More driving equals a greater likelihood of a car accident.

The Bureau of Labor Statistics notes that taxi driving is one of the highest-risk occupations in the country, often falling within the top 10 jobs to earn this unwanted award.

The good news is that, in 2018, the fatal injuries to taxi drivers and chauffeurs fell by 24 percent to just 47. That’s the lowest number since 2003, so hopefully, that’s the start of a positive trend.

The wide variety of people riding, high reliance on being behind the wheel, and sometimes crazy hours combine to make this a dangerous job. This means higher risk for insurance companies, which hike your rates.

What other factors influence how much your rate will be? Let’s look at a few.

How Does Your Driving Record Affect Your Car Insurance Rates?

Your driving record is the single biggest factor that goes into how much you’ll pay for your car insurance rates, both for personal and livery insurance. This table shows what the average person in the country pays, broken down by the major insurers and what event goes onto their record.

Average Annual Car Insurance Rates by Driving Record
American Family$2,693.61$3,025.74$3,722.75$4,330.24
State Farm$2,821.18$3,186.01$3,396.01$3,636.80
Liberty Mutual$4,774.30$5,701.26$6,204.78$7,613.48
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Your rates are going to go up if you get even one speeding ticket, and forget about it if you cause an accident. But a DUI is the biggest event that can cause your wallet to start hurting. Simply put, don’t drink and drive.

How Does Your Credit History Affect Your Car Insurance Rates?

Your credit history will also affect how much you pay for car insurance, like just about everything. Bad credit will definitely increase your rates.

Average Annual Car Insurance Rates by Credit History
State Farm$2,853.00$2,174.26$4,951.20
American Family$3,169.53$2,691.74$4,467.98
Liberty Mutual$5,604.24$4,388.18$8,802.22
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If you’re working to increase your credit history, just make sure to check back with your insurers or shop around as it gets better. Some insurers won’t charge you as much for your bad credit score.

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How Does Your Commute Affect Your Car Insurance Rates?

Though you’re driving for a living, do you live close to where your taxi is kept? Some places charge more if you’re driving farther every day.

Average Annual Car Insurance Rates by Commute
Companies10-MILE COMMUTE/
State Farm$3,175.98$3,344.01
American Family$3,401.30$3,484.88
Liberty Mutual$5,995.27$6,151.63
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If you find yourself queuing up a Podcast for the drive, you might want to shop around for better rates.

It helps tremendously to research taxi driver policies online. How do you shop around for insurance?

Frequently Asked Questions: What About Purchasing Taxi Car Insurance in a Big City?

Just in case we’ve missed something, we’ve added a couple of FAQs below.

Does Commercial Auto Insurance Cover Personal Use?

Commercial insurance is really only supposed to cover you when you’re using the vehicle for your job. But, you are generally allowed to use your business vehicle for personal use. At that point, the commercial auto insurance probably covers your personal use. But always check with your agent about your policy to verify before you take it out for a ride.

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Who Is “Insured” Under a Commercial Auto Policy?

The person or company listed is the insured. There are also permissive users who can use the vehicle with your permission and still be covered by the policy. In a taxi fleet, that will refer to every drive in the fleet or anyone you allow to drive the vehicle. This is the sort of coverage for a rental fleet, as well. Those who rent or borrow a vehicle are covered.

It’s best to always check the details of your policy to ensure that everybody is covered, though, as policies vary.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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