Taxi

Hackney carriage insurance vs private hire: which cover do you need?

Hackney carriage insurance (public hire) covers street hails and ranks. Private hire cover is for pre-booked work only. Match the policy to your licence.

Hackney carriage insurance (also called public hire or black cab insurance) is the cover you need if your council licence lets you be hailed in the street or wait on a rank. If your licence is for private hire, meaning every job has to be pre-booked through an operator, you need private hire insurance instead, and the two are not interchangeable.

The short version: match the policy to the licence on your vehicle and to the work you actually do. The rest of this guide explains the difference, what happens if they don't line up, and why the price of each can differ.

What is the difference between hackney carriage and private hire?

England and Wales run a two-part system. A hackney carriage (the legal name for a taxi) can pick up passengers who flag it down or who walk up to it at a rank. A private hire vehicle (often called a minicab) cannot. It can only carry passengers who have booked in advance.

The Department for Transport's best practice guidance for licensing authorities puts it plainly: a private hire vehicle "can only be legally engaged through a booking with a licensed operator", and its driver "can only fulfil pre-booked requests". The same guidance tells passengers that unless they are hailing a locally licensed taxi in the street or at a stand, they should not get into any other vehicle unless they have pre-booked it.

London has its own licensing laws but the same split applies. Transport for London says black taxis "can be hailed on the street or from a taxi rank", while minicabs "must be pre-booked through a TfL-licensed private hire operator" and "cannot ply for hire or use taxi ranks".

The fares row comes from the same DfT guidance, which says licensing authorities "have the power to set maximum taxi fares for journeys within their area" but that "there is no power to set fares for private hire vehicles".

What is taxi insurance called?

People use several names for the same few products, which is why searches get muddled:

• Public hire insurance is the trade term for cover on a hackney carriage. You will also see it called hackney insurance, hackney carriage insurance or black cab insurance.
• Private hire insurance covers minicabs and other vehicles that only do pre-booked work.
• Hire and reward is the wider term for any motor policy that lets you carry passengers (or goods) for payment. Both public and private hire cover are types of hire and reward insurance.

Ordinary car insurance for social, domestic and pleasure use, or commuting and business use, is not written for carrying fare-paying passengers, so it is not a substitute.

Is black cab insurance the same as hackney carriage insurance?

Yes. "Hackney carriage and black cab insurance" are two names for public hire cover. The purpose-built London cab is the best-known hackney carriage, but for insurance what matters is the licence on the vehicle, not its shape.

The insurer will ask for your licence details, the licensing council, the vehicle and how you work. Our guide to taxi insurance for your council licence covers the proof councils usually ask to see.

What happens if you have the wrong taxi insurance?

This is where drivers get caught out. There are two separate problems: breaking the licensing rules, and driving outside what your insurance covers.

The licensing side

A private hire driver who picks up a street hail is plying for hire without a hackney carriage licence. A hackney carriage driver who plies for hire outside the area that licensed them is also committing an offence. These are matters for the council and the courts regardless of insurance.

The insurance side

Your policy will describe the uses it covers. A real example is in the High Court case Oldham Borough Council v Sajjad, where the driver's policy covered "the carriage of passengers for hire or reward under a public hire licence".

In that case, a driver licensed as a hackney carriage in one borough picked up passengers who flagged him down in another. He pleaded guilty to plying for hire outside his area. The council also charged him with having no insurance, because his policy restricted where he could work. The court found he was insured, because section 148 of the Road Traffic Act 1988 makes certain policy restrictions ineffective for compulsory cover, and "the areas within which the vehicle is used" is one of them.

That list in section 148 is narrow. It covers things like driver age, vehicle condition, number of passengers, time and area of use, and engine size. It does not mention the purpose the vehicle is used for. The Sajjad case was about an area limit, so it does not mean a private hire policy, written for pre-booked work, will cover street hails. Using a vehicle outside the description of use on the policy is the kind of gap that could leave a driver facing a no-insurance charge or a claim being disputed.

If you are found driving without valid insurance, GOV.UK says police can give you a fixed penalty of £300 and 6 penalty points. If the case goes to court you could get an unlimited fine and be disqualified from driving, and police can seize the vehicle and in some cases destroy it.

Doing pre-booked work in a hackney carriage

The DfT guidance notes that holders of taxi licences "are permitted to carry pre-booked fares anywhere in England and Wales". Whether your policy covers that work depends on its wording, so check the description of use on your certificate. If you take bookings through an app or operator as well as working the ranks, tell the broker so the policy reflects both.

Why can public hire insurance cost more than private hire?

Insurers don't have to reveal exactly how they set prices. The Association of British Insurers explains that by "risk" it doesn't mean how safely someone drives, but the chances that the vehicle will be involved in a collision, stolen or damaged. Factors include where you live and how many miles you drive, and different insurers use different data to calculate risk.

The type of work you do is part of that picture, which is why public and private hire are priced separately. Insurers don't publish their reasons, but things that could be relevant for a hackney carriage include:

• passengers are not known in advance, unlike a booked job with a name and pick-up address
• time spent working in busy town and city centres, including ranks late at night
• the mileage that comes with cruising for fares
• the vehicle itself, especially purpose-built cabs or adapted accessible vehicles

None of this means public hire will always cost more for you. The driver, the vehicle, the area and the claims history can all move the price either way.

What affects the price, and what drivers look at

1. Your licence type and council. Public or private hire, and which authority licensed you.
2. Your driving and claims record. Including past claims, convictions and any no claims bonus.
3. The vehicle. Make, model, value and any adaptations.
4. How and where you work. Ranks, street work, bookings, airport runs, day or night.
5. The excess. For example, choosing a £500 voluntary excess rather than £250 changes what you pay towards a claim, so check you could afford it.
6. Extras. Public liability, breakdown, replacement vehicle and loss of earnings are often optional and add to the cost.

Getting any of these wrong to bring the price down can void the policy. Our article on how to reduce car insurance without invalidating your policy explains the line between legitimate changes and misrepresentation, and much of it applies to taxi cover too.

How to check you have the right cover for your licence

1. Look at your licence. Is the vehicle plated as a hackney carriage or a private hire vehicle, and by which council?
2. Read the description of use on your certificate. It should mention public hire or private hire to match your plate.
3. Check the policy covers all your work. Ranks, street hails and pre-booked jobs if you do all three as a hackney driver.
4. Confirm you are on the Motor Insurance Database. You can check your own vehicle free through askMID.
5. Tell your insurer about changes. A new vehicle, a switch from private to public hire, a new council or new convictions all need declaring.

If you are licensed, or about to be, you can get taxi insurance quotes through Kompare: you fill in a short form and a specialist FCA-authorised broker from the panel contacts you with quotes for public or private hire cover. Kompare is not an insurer and does not give advice, so the broker will go through what the policy covers with you.