Transportation Network Company Insurance Bill Passes Oklahoma Senate

A bill addressing the insurance requirements of transportation network companies (TNCs), or rideshare organizations, and their drivers has passed the Oklahoma Senate by an overwhelming majority vote of 40-3.

SB 436, the Transportation Network Act of 2015, sets coverage requirements, including limits of liability and deductibles, and clarifies when coverage is in effect for vehicles being used by drivers in service of a TNC.

The bill is one of several that have been introduced by South Central legislators this year. In addition to Oklahoma, measures addressing regulation and insurance requirements for TNC operations have been filed in both the Texas Legislature and the Arkansas General Assembly this year.

The Property Casualty Insurers Association of America (PCI) commended the Oklahoma Senate for supporting SB 436, which PCI says closes insurance gaps associated with commercial rideshare companies such as Uber and Lyft.

The bill is authored by Republican Sen. Marty Quinn, R-Tulsa, a member of the Senate insurance committee and a sales professional with Shelter Insurance. Republican Rep. Glen Mulready, chair of the House insurance committee, co-authored the bill.

“This bill not only protects rideshare drivers, but the people of Oklahoma by addressing insurance gaps the entire time the driver is involved in rideshare activity,” said Joe Woods, PCI’s vice president of state government relations. “It’s important rideshare drivers and their passengers understand that the driver’s personal auto policy will not cover them if they are injured or the vehicle is damaged in an accident while the car is used in a ride-sharing activity. PCI supports SB 436 which ensures drivers have adequate insurance coverage from the time they turn the app on until they log off.”

Following is a summary of some of the measure’s provisions:

• Transportation network, or rideshare, companies must disclose in writing to their drivers the particulars of TNC-specific insurance coverage — including limits of liability and deductibles — that the company is responsible for and that for which the driver is responsible while using a “vehicle in connection with a transportation network company’s online-enabled application or platform.”
• The TNC must advise its drivers that his or her personal auto insurance “may not provide any required or optional coverage” while the vehicle is in service or connected to the TNC’s driver app.
• Transportation network company insurance shall provide a minimum of $25,000 in primary liability coverage per person and $50,000 per incident for death, bodily injury, and $25,000 for property damage.
• A TNC must provide “uninsured motorist, collision physical damage coverage, and comprehensive physical damage coverage if the participating driver carries those coverages on their auto policy, unless that insurer is providing transportation network company insurance to the driver.”
• The insurer providing TNC insurance “shall have the duty to defend and indemnify the insured.”
• TNC insurance is required “from the moment a participating driver logs on to the transportation network company’s online-enabled application or platform until the driver accepts a request to transport a passenger, and from the moment the driver completes the transaction on the online-enabled application or platform or the ride is complete, whichever is later, until the driver either accepts another ride request on the online-enabled application or platform or logs off the online-enabled application or platform.”
• Coverage under a TNC policy “shall not be dependent on an automobile insurance policy first denying a claim nor shall an automobile insurance policy be required to first deny a claim.”
• If a participating driver’s TNC insurance coverage has lapsed, in the event of a claim the transportation network company shall provide the required coverage “beginning with the first dollar of a claim.”
• Coverage for TNC vehicle use cannot be provided by personal automobile policies unless the policy expressly provides TNC coverage “with or without a separate charge, or the policy contains an amendment or endorsement to provide that coverage, for which a separately stated premium is charged.”
• The personal auto insurer has no duty to defend in case of a claim if the policy does not expressly provide coverage for TNC operations within the policy or through an endorsement.

Bills that have been introduced in Texas that address transportation network company regulation and insurance requirements include: SB 1555, HB 2440 and HB 1733.

In Arkansas, SB 800 and HB 1773 have been introduced with the aim of regulating TNCs.

PCI’s said the insurance industry is beginning to address the transportation marketplace with the introduction of new products.

“There are already several insurers across the country offering hybrid polices that provide coverage options for rideshare drivers, and this bill will encourage innovation in the insurance marketplace,” said Woods.

Topics Auto Personal Auto Oklahoma Politics