GAP Insurance for Taxi and Private Hire Drivers: Why Standard Cover Will Not Do

If you drive a taxi or private hire vehicle, the car is not a possession. It is the entire business. Lose it and the income stops the same day.

That makes the shortfall after a write-off a more serious problem for you than for most drivers, and it makes one detail in the small print worth checking carefully before you buy any GAP policy.

The exclusion most drivers miss

Most GAP insurance is written for private, social, domestic and pleasure use. Carrying passengers for hire and reward is excluded.

That matters because the exclusion is easy to miss at the point of sale. A driver buys GAP alongside the vehicle, assumes it follows the car, and only discovers at claim stage that the use it was being put to was never covered. By then the vehicle is gone and so is the shortfall protection.

If your vehicle is licensed for hire and reward, you need a policy written for hire and reward. A cheaper policy that excludes your actual use is not cheaper, it is worthless.

Why the shortfall is often larger for drivers

Private hire vehicles cover far higher mileage than private cars, and mileage drives depreciation hard. A vehicle two years into a finance agreement and carrying taxi mileage can be worth substantially less than the same model in private hands.

Your motor insurer settles on market value, which reflects that mileage. Your finance agreement does not. The result is a wider gap than a private driver would face on an identical car.

What to check before you buy

Confirm that hire and reward use is explicitly permitted rather than simply not mentioned. Check whether any mileage cap applies, since standard caps are often unrealistic for a full-time driver.

Decide which type you need. Return to Invoice puts you back towards the price you paid. Finance GAP clears the outstanding balance. Which one suits depends on how you funded the vehicle and how much of a deposit you put down.

Check the vehicle qualifies, which for our policies means being up to ten years old, with you as the registered keeper and the policyholder on the main motor insurance.

If you are not sure what you have

Plenty of drivers are carrying GAP cover that would not respond, and the only way to know is to read the use clause.

If you would like someone to look at it with you, or you want cover written specifically for hire and reward, call us on 0161 388 2550 or email sales@gapinsurancetoday.co.uk.