Becoming A Taxi Insurance Broker: Steps To Success

Taxi insurance is a type of for-hire livery coverage designed to protect taxi drivers, their vehicles, and their passengers. It is a mandatory requirement for taxi drivers to have taxi insurance in place. To become a taxi insurance broker, you will need to follow a set of educational and licensure requirements that allow you to practice. Each state has specific education and licensing requirements for professionals to work in insurance. The steps to becoming a taxi insurance broker include earning a high school diploma or GED, considering a bachelor's degree, completing a pre-licensing course, taking the licensing exam, passing a background check, and applying for a license.

Understand taxi insurance requirements

To become a taxi insurance broker, it is essential to have a comprehensive understanding of taxi insurance requirements. Here is a detailed overview:

Taxi insurance is a specialised form of commercial auto insurance designed for the unique risks associated with operating a taxi service. It provides coverage for taxi drivers, their vehicles, and passengers. Unlike limo, black car, or ridesharing services, taxi services typically involve random and unscheduled fares and pickup locations, and they usually do not utilise luxury vehicles. This creates a distinct insurance risk profile.

The insurance requirements for taxis can vary depending on the city and state of operation. Each state has its own set of regulations, and it's important to familiarise yourself with the specific rules in the areas where your clients operate. The local Department of Motor Vehicles (DMV) is a valuable resource for understanding state-specific requirements.

One key aspect to consider is the age and type of vehicle. Some insurers may have restrictions on older vehicles, deeming them unacceptable for coverage. Additionally, the driver's age and driving history can impact eligibility. Younger or less experienced drivers may pose a higher insurance risk and affect the overall insurance requirements.

Taxi insurance also extends beyond traditional taxi cab operations. It often includes coverage for airport shuttle services, sightseeing tours, and certain rideshare risks. The specific nature of these additional services can influence the insurance requirements and coverage options.

Another factor to consider is the colour of the taxi. While taxi cabs are traditionally associated with the colour yellow, some cities and states may mandate specific colours for taxis. Checking with the local taxi cab commissioner's office is essential to ensure compliance with such regulations.

Furthermore, taxi insurance rates can vary depending on whether the policy is purchased through a broker, an agent, or directly from an insurance company. It is important to guide your clients in finding a policy that balances their budget constraints with adequate protection.

Understanding the unique requirements of taxi insurance is crucial for effectively serving your clients as a taxi insurance broker. By grasping these intricacies, you can better assist taxi companies and drivers in obtaining the necessary coverage to protect themselves, their vehicles, and their passengers.

Know the taxi insurance rates

Taxi insurance rates vary depending on several factors. In the UK, private hire taxi insurance could cost anywhere between £1500 and £3500 per year for comprehensive private hire insurance cover. However, shorter-term insurance can be slightly more expensive due to the company's admin costs.

The cost of commercial taxi insurance considers many rating factors, including:

• Location of operation
• Type and age of the vehicle(s)
• Types and amount of coverage

Additionally, taxi insurance rates may vary depending on whether you buy your policy through a broker, an agent, or directly from an insurance company.

When it comes to age, younger drivers tend to pay the most for car insurance due to their lack of experience. Drivers in their 50s and 60s are usually considered the safest, while drivers over 70 tend to see a slight increase in insurance costs.

The type of vehicle also matters. If your car or minicab is worth a lot of money, you may end up paying more for insurance as it would cost more to repair or replace if it was damaged or stolen.

Your driving history is another critical factor. If you have been in a recent accident or have points on your license, your insurance costs will likely increase.

To get the best rates, it's important to shop around, compare prices, and choose a policy that fits your budget while providing adequate protection.

Learn the different types of insurance

To become a taxi insurance broker, you'll need to learn about the different types of insurance available to taxi drivers. Here's a detailed overview:

Types of Taxi Insurance

Taxi insurance is a type of for-hire livery coverage designed to protect taxi drivers, their vehicles, and their passengers. It's tailored to the unique nature of taxi services, which often involve random and unscheduled fares and pickup locations, and the use of non-luxury vehicles. This sets taxis apart from limo, black car, and ridesharing services, creating a distinct insurance risk profile.

While traditional taxi cab operations are the primary focus of taxi insurance, the coverage extends to other businesses as well. This includes airport shuttle services, sightseeing tours, and certain rideshare arrangements.

When it comes to taxi insurance, various factors come into play, and these can differ depending on the insurance company and the state in which the taxi operates. Here are some key factors that influence taxi insurance requirements:

• Location of Operation: Each state and city has its own regulations and requirements for taxi insurance.
• Vehicle Age and Type: The age and type of vehicle can impact eligibility, as some insurers may not accept older cars.
• Driver's Age and History: The age and driving history of the driver can also affect insurance eligibility and rates.

Additional Considerations

In addition to the above, there are other considerations that taxi drivers and insurance brokers need to be aware of:

• Vehicle Colour: While taxi cabs are traditionally yellow, some cities and states mandate specific colours for taxis.
• Insurance Procurement Method: Buying insurance through a broker, agent, or directly from an insurance company can impact the rates.
• Rating Factors: The cost of commercial taxi insurance is influenced by factors such as location, vehicle type and age, and the types and amounts of coverage selected.

Understanding Taxi Licence Types

It's important to understand the difference between private hire (PCO or PHV) and public hire (hackney carriages, black cabs) licences, as this will impact the insurance requirements:

• Private hire licences are for pre-booked appointments, including taxi firms, minicabs, and apps like Uber. They allow for airport runs and contracts with businesses.
• Public hire licences are for taxis that are hailed by passengers on the street and cannot be pre-booked. These typically display a 'Taxi' sign on the roof.

Insurance Requirements for Taxi Drivers

Taxi drivers are required to carry a minimum amount of liability insurance, but the specific requirements can vary between traditional taxi providers and ridesharing services. In the case of ridesharing services, the amount of coverage and liable parties may differ, as these companies often classify drivers as independent contractors.

Education and Licensing for Brokers

If you're aiming to become a taxi insurance broker, it's important to note that each state has specific education and licensing requirements. For example, in Texas, the process involves earning a high school diploma or GED, potentially pursuing a bachelor's degree, completing a prelicensing course, taking a licensing exam, passing a background check, and applying for a state insurance license.

Research the qualifications needed to be an insurance broker

To become an insurance broker, you must first meet the basic eligibility requirements. In the US, this means being at least 18 years old, being able to pass a background check, and not having any fraud or felony charges, among other criteria. While a college degree is not required, it is recommended that you pursue a bachelor's degree in a related field such as insurance, business, economics, or finance. This will provide you with a strong foundation of knowledge and skills relevant to the role of an insurance broker.

The next step is to complete a prelicensing course to increase your insurance knowledge and prepare for the licensing exam. This course can be taken online or in person and will cover the fundamentals of insurance and various specialties, including life, health, auto, property, and casualty insurance. Once you have completed the course, you will receive a certificate of completion that you can submit when applying for your state insurance license.

It is also important to gain practical experience through internships or entry-level positions. Internships with insurance companies will allow you to observe experienced brokers in action and learn about the day-to-day operations of the industry. Entry-level positions, such as insurance technician or junior account handler, can provide valuable on-the-job training and help you develop the skills needed to become a successful broker.

Finally, you will need to pass the licensing exam for your chosen insurance specialty. In the US, Pearson VUE provides the testing for aspiring insurance brokers, with exams covering different specialties. After passing the exam, you will need to pass a background check and apply for your state insurance license through the National Insurance Producer Registry.

Find out how to apply for a broker licence

To become a taxi insurance broker, you will need to obtain a broker licence. The process for applying for a broker licence will vary depending on your location. For example, in Texas, the following steps are required to obtain a broker licence:

• Earn a high school diploma or GED: To qualify for a Texas insurance licence, you must have completed high school or obtained your GED. While in school, consider taking courses that can teach you about insurance policies, procedures, or customer service skills. Courses in business, law, finance, or communication may be particularly useful.
• Consider earning a bachelor's degree: Although not required, completing a bachelor's degree can advance your knowledge of insurance and strengthen your skill set. Relevant degree programmes include business, economics, finance, or marketing. During your studies, consider completing an internship with an insurance agency to gain practical experience.
• Complete a prelicensing course: Enrol in a prelicensing course approved by the Texas Department of Insurance to enhance your insurance knowledge and prepare for the licensure exam. These courses are available online or in-person and cover various insurance specialties, including life, health, auto, property, and casualty insurance.
• Take the licensing exam: After completing your prelicensing course, register for the licensing exam in your chosen insurance specialty. In Texas, Pearson VUE provides the testing for aspiring insurance brokers, offering exams such as General Lines Life and Health, General Lines Property and Casualty, and Personal Lines Property and Casualty.
• Pass a background check: Visit the Texas Department of Public Safety to provide your fingerprints and answer questions about your criminal background. Include a copy of your completed background check when applying for your licence.
• Apply for a Texas insurance licence: Submit your licence application on the National Insurance Producer Registry's website, ensuring you specify that you are applying for a Texas licence. Include your personal details, educational background, and certification from a state-approved prelicensing course. Once your application is submitted, you will receive a National Producer Number (NPN) to track your application status.

In addition to the above steps, remember to review the specific education and licensing requirements for insurance brokers in your state. Each state has its own set of rules, so it is important to familiarise yourself with the regulations in your location.

Frequently asked questions