Plan Insurance Blog

Question time with Daniel Severin

We have had a few enquiries recently about cross-border hiring, the impact of non-fault accidents on premiums, part-time hiring and TfL’s proposed operators fees. Daniel, our qualified insurance specialist, answers these for you.

Can a driver licensed elsewhere in the country potentially also be licensed by TfL as a taxi or minicab driver?

We contacted TfL, who confirmed:

“a driver licensed elsewhere in the country can potentially also be licensed by TfL as a taxi or minicab driver. We ask whether applicants are licensed by another authority and make appropriate enquiries to establish that they are fit to hold a licence. A minicab licensed by another authority may also potentially be licensed by TfL and controls exist to ensure that they are identifiable.  However, licensing decisions depend on individual facts and dual licensing may not be possible e.g. where vehicle requirements are incompatible.”

Why would drivers be penalised for having had non fault accidents?

Being penalised for non-fault incidents can appear harsh, but there is a logic: most insurers use a points-based system to help them assess the potential risk as a whole. For example, a fault incident may score 3 points, a serious driving conviction several points, multiple non-fault claims 1 point, etc. That one point could take you over the threshold, meaning an insurer is no longer able to offer you a policy or may wish to charge more.

As a broker, we do not know the exact workings of each insurer’s rating system, these figures are purely to help demonstrate the point. Non-fault incidents are treated this way because they could, in the insurer’s eyes, be indicative of other relevant factors (e.g. the more time you spend on the road, the more likely you are, statistically, to be involved in an incident).

Also, it’s probably worth noting that non fault-incidents still require the insurer’s attention, and contribute to their overheads. I hope that explains their reasoning and helps relieve the frustration to some extent.

Steve Garelick, at the GMB:  how many drivers fail to tell insurers that they are part-time, or working excessive hours for both roles?

All insurers ask the question: “are you a full-time or part-time taxi/private hire driver?” If the answer is “part-time”, then the insurer will ask what else they do. From there, each insurer has their own stance.

Most insurers will assess on a case-by-case basis, and, depending on the type of secondary job, agree or decline to quote. To my knowledge, only one insurer will automatically decline to quote, as it is part of their underwriting criteria (just like some may not wish to insure drivers under 25).

We can’t comment for other insurers/brokers, but our position is to take into account the physicality of the job and the hours worked to make a decision. We can accommodate part-time drivers if they meet our underwriting criteria.

How will TfL spend all the funds raised by their new operator fees?

Plan fully support the LPHCA’s objections to TfL’s erratic and excessive fee proposals. We believe they present a very real threat, not only to operators – and ultimately the livelihood of drivers – but also to the future of industry service providers such as ourselves. We voiced the opinion at the LPHCA Roadshow that, if a technology platform is the cause, then perhaps it could also be the solution: TfL could gain from investing in simple technological solutions.

For nearly two years, we have been suggesting that they develop an insurance portal (to which we gave the working title “Taxi Insurance Checker” or TIC). Such a system would eradicate the need for compliance officers to search the streets for uninsured or inappropriately insured drivers. Instead, they would receive an email notification immediately when a taxi or private hire vehicle is removed from the database. The number of compliance officers required could be greatly reduced. Despite positive meetings with TfL, as it stands we’re still waiting for them to act upon the proposals.

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