Ride Sharing Groups & Insurance Companies Submit Model Bill
Laura Maxwell

Ride Sharing Groups & Insurance Companies Submit Model Bill

Definitions, Clarifications for Ever-changing Market

Laura Maxwell March 30, 2015 Posted in: Blog Posts, Ridesharing
Insurance industry associations, major insurance companies and transportation network companies (TNC) have drafted a model bill which they will be sending to policymakers across the United States. The letter going to policymakers is signed by Allstate, American Insurance Association, Farmers Insurance, Lyft, National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America, State Farm, Uber Technologies and USAA.

The model bill begins with definitions to clearly distinguish ride sharing from taxis, limousines or vehicles for hire. Definitions are followed with the Financial Responsibility of Transportation Network Companies. The insurance requirements vary by driver activity.

During Period 1 (App is On and the driver has not accepted a match and there are no passengers) primary automobile liability insurance in the amount of at least $50,000 for death and bodily injury per person,
 $100,000 for death and bodily injury per incident, and $25,000 for property damage, along with any other coverage mandated by state financial responsibility law is required. The coverage requirements may be satisfied by automobile insurance maintained by the TNC driver or automobile insurance maintained by the TNC or a combination of the TNC and TNC driver.

During Period 2 (App is On, the driver has accepted a match and is enroute to the passenger) and Period 3 (App is On, the passenger is in the car) primary automobile liability insurance that provides at least $1,000,000 for death, bodily injury and property damage, along with any other coverage mandated by state financial responsibility law is required. The coverage requirements may be satisfied by automobile insurance maintained by the TNC driver or automobile insurance maintained by the TNC or a combination of the TNC and TNC driver.

The TNC must provide coverage if the TNC driver does not have the required coverage. Coverage under an automobile insurance policy maintained by the TNC should not require a personal automobile insurance policy to first deny a claim.

The model bill continues with TNC required disclosures to the TNC drivers. The disclosures must explain the TNC provided insurance and that the TNC driver’s own policy may not provide coverage during Period 1.

The model bill ends with automobile provisions. It explains that automobile insurers may exclude coverage during Periods 1, 2 and 3. Insurers that exclude this coverage will not have duty to defend or indemnify a claim. In a claim coverage investigation, TNCs may need to disclose the times the TNC driver logged on and off the app.

Click to download a PDF of the TNC Insurance Compromise Model Bill (407 KB).

lmaxwell@pinnacleactuaries.com

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