Taxi insurance is compulsory for cabs used for hire. Learn what it covers, what it does not and how to choose a policy. Get a taxi insurance quote today.
Taxi insurance is a commercial policy for cabs that carry passengers for money. Third-party cover is compulsory by law, and a private-car policy is not valid for a taxi. A comprehensive taxi policy adds cover for your own cab, which is useful because your cab is how you earn.
What Is Taxi and Cab Insurance?
A taxi is a passenger-carrying commercial vehicle. It runs longer hours, meets more traffic and carries other people. So it needs a policy made for this use.
Taxi insurance protects you in three ways:
- It covers harm you may cause to other people or their property.
- It can cover damage to your own cab, if you take comprehensive cover.
- It gives the owner-driver a personal accident cover.
You can see the basics on our taxi and cab insurance page.
Why a Private Car Policy Does Not Work
Many people ask if they can use their car policy for a cab. The answer is no. A private-car policy is not valid for commercial use.
If you use a private car as a taxi and have an accident, the insurer can reject your claim. Using a private vehicle commercially is a known reason for claim rejection. This could leave you paying for repairs and for the other party's loss from your own pocket.
If you plan to start a cab business, tell the insurer the real use of the vehicle from day one. The same goes for app-based cab work. Always give true facts.
What Does Taxi Insurance Cover?
A taxi policy usually has these parts.
- Third-party liability. This pays for injury, death or property damage to another person. Property damage liability is limited to ₹7.5 lakh, while injury or death liability is unlimited.
- Own damage cover. This pays for damage to your cab from accident, fire, theft, natural calamities like flood and earthquake, and man-made events like riots, as per policy terms.
- Personal accident cover. Compulsory PA cover of ₹15 lakh applies to the owner-driver, unless the owner already has a similar cover.
Third-party insurance is compulsory for every vehicle under the Motor Vehicles Act, 1988. Driving without valid insurance can lead to a fine of ₹2,000 and/or up to 3 months in jail for a first offence. For a repeat offence, it is ₹4,000 and/or up to 3 months.
A third-party policy does not pay for damage to your own cab. For that, you need comprehensive cover. Read more about comprehensive insurance and third-party insurance.
Add-Ons That Taxi Owners Often Look At
Your cab is your income. A few days in the garage means lost earnings. These add-ons may help. Terms differ by insurer.
- Zero depreciation: Usually for newer cabs, often up to around 5 years old. It gives a higher pay-out on replaced parts.
- Roadside assistance: Helps with breakdowns, towing and flat tyres.
- Engine protection: Useful if you drive in areas that get flooded.
- Consumables cover: Pays for small repair items like oil and nuts.
- NCB protection: Helps you keep your discount after a claim, usually within set limits.
- Daily allowance: Some insurers offer a small amount while the cab is in repair.
Check the policy wording for age limits and claim limits.
Cashless Claims and Network Garages
For a taxi, quick repair is important. A cashless claim means you repair the cab at a network garage and the insurer pays the garage directly. You pay only for non-covered items and deductibles.
With a reimbursement claim, you pay first and then claim the money back with bills. It can take longer.
Before you buy, check if there are network garages near your usual routes. Also ask about the claim process, so you are not confused in an emergency. Our claim support page explains the typical steps.
Documents You Usually Need
Keep these ready for buying, renewing or claiming:
- RC copy of the cab.
- Driving licence of the driver.
- Previous policy copy.
- ID and address proof.
- Permit and fitness papers, if your insurer asks for them.
- For claims: claim form, photos of damage, repair estimate and bills, and FIR when needed.
For theft, a major accident, third-party injury or death, or riot damage, inform the police as well as the insurer.
Tips to Keep Your Taxi Policy Safe
- Renew on time. If the policy expires, the cab is uninsured from the next minute.
- Do not drive after drinking or without a valid licence. Both can lead to a claim rejection.
- Inform the insurer quickly after any accident. Late intimation can hurt your claim.
- Do not move or repair the cab beyond what is needed before the surveyor checks it.
- Keep the policy copy in your phone and in the cab.
You can renew your vehicle insurance early so there is no gap. If you want to understand the base rules first, our guide on commercial vehicle insurance is a good start. Ready to compare? Get a quote.
Rules can change and differ by insurer, so your policy document is the final word.
FAQs
Is taxi insurance compulsory?
Yes. Third-party insurance is compulsory for every vehicle on Indian roads, including taxis and cabs.
Can I use my private car insurance for a cab?
No. A private-car policy is not valid for commercial use, and a claim may be rejected.
Does taxi insurance cover the driver?
Compulsory PA cover of ₹15 lakh applies to the owner-driver, unless the owner already has a similar cover. Other drivers may need separate cover.
Does a taxi policy cover engine damage from flood?
Engine damage from water usually needs the engine protection add-on. Check your policy wording.
This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.