Due to an increase in tourism and people living away from their workplace and choosing not to drive, more people using taxis to get to work (let's face it, who can afford a car these days?), a boom in the taxi business is being seen - and with the competition level increasing day by day, companies are buying more and more taxis to make a profit. But as the risk level is higher in the business, opting for a taxi insurance policy is a must to overcome the cost of damages caused to the vehicle. However, because of higher premiums required to get the insurance cover, many companies prefer to purchase a cheap taxi insurance policy. Many companies offer cheap taxi insurance policies, where there are fewer features available in the policy.

There are three types of taxi insurance policies available: fully comprehensive, third party and lastly, third party fire & theft. In addition to this, private hire insurance policies and public hire insurance policies are also available. Fully comprehensive insurance cover is the most expensive of all, which covers fire and theft of the third party as well damages caused to the taxi and the vehicle belonging to the third party. Third party fire & theft insurance policy is a cheap taxi insurance policy, in which one obtains insurance that covers a third party because of theft, fire or any kind of explosion.

The last type of taxi insurance, third party insurance, is the cheapest of all because with this type of insurance only the damages caused to the third party by the cab or the taxi can be claimed for. If one doesn't have any insurance policy, one needs to have at least a simple insurance plan as, according to law, no vehicle can be on the road without having insurance cover. But the type of insurance policy chosen by a person also depends on the use of the cab. For example if a person uses the taxi full time (i.e. for commercial use as well as for personal use), they need to obtain full comprehensive cover. Moreover, the policies are different if the cab is used for private hire. As according to private hire insurance policy the cab has to be pre-booked as well as some amount of security is also to be charged.

In addition to this there are many types of discounts available on taxi insurance policies. One is the no claim bonus, where a person gets some bonuses on the premium of the policy if, in a full year, they don't claim any damages caused to the vehicle. In order to attract more customers, taxi insurance companies keep providing offers to their clients. Moreover if the taxi company keeps a high level of security for their taxis, then they get some amount of discount on the premium of the taxi insurance policy. Better deals with lower premiums are offered to the taxis that have licences from the government than the ones that are non - licensed.