25 March 2015
TNC insurance coverage issues have attracted significant interest from legislators and regulators around the country in light of the increasing popularity of TNCs (also called “commercial ride-sharing companies”), which use an online application or platform developed and administered by the TNC (the “TNC app”) to match passengers with participating drivers who use their personal vehicle (“TNC drivers”) to transport passengers for a fee. Legislators’ and regulators’ concerns have been heightened by a number of high-profile instances of accidents involving TNC drivers.
The Property-Casualty Insurance Committee of the National Conference of Insurance Legislators (“NCOIL”) met on March 1, 2015 to discuss a “Proposed Model Act to Regulate Insurance Requirements for Transportation Network Companies and Transportation Network Drivers” (the “proposed model act”), relating to insurance coverage for TNCs, sponsored by Ohio state representative Michael Stinziano (D-Columbus).
The focus of the discussion centered on whether a personal auto policy of the TNC driver would provide any coverage during “Period One” – the time period during which a TNC app is activated, but the TNC driver has not yet been matched with a passenger.
The proposed model act would “preempt any local ordinance, resolution, or other law adopted to impose, require, or otherwise regulate insurance requirements for transportation network companies and the provision of transportation network company services.”
The proposed model act would require TNC insurance, defined as “an insurance policy that specifically covers a driver’s use of a vehicle in connection with a transportation network company’s online-enabled application or platform,” during the period of time that TNC services are being provided, which would begin when a TNC driver logs onto the TNC app and is waiting to be matched with a passenger, and would end when the TNC driver logs off the TNC app or when the passenger has completely exited the vehicle, whichever is later.
The proposed model act would require TNC insurance to provide: (i) primary liability coverage; (ii) uninsured and underinsured motorist coverage; (iii) personal injury protection; and (iv) collision physical damage coverage and comprehensive physical damage coverage. The TNC insurance requirements could be met by the TNC, the TNC driver, or both.
The proposed model act would also require TNCs to provide certain disclosures and notices to TNC drivers and the owner of the personal vehicle being used by a TNC driver.
In addition, the proposed model act would specify that a personal auto insurance policy is not required to provide coverage during any period of time that TNC services are being provided. However, an insurer would be permitted to include provisions in a personal auto liability insurance policy (or in a policy amendment or endorsement) that expressly provide for coverage during all or a specified portion of the period of time that TNC services are being provided.
A fuller discussion of the proposed model act is planned for NCOIL’s July Summer Meeting scheduled for July 16 to 19 in Indianapolis. A draft of the proposed model act is available here, and interested parties may provide written comments in advance of the meeting, or provide oral comments at the meeting.