The Pennsylvania House insurance committee held a hearing Monday to examine the insurance coverage implications for consumers who use ridesharing services.
Lawmakers said ridesharing companies like Lyft, UberX and Yellow X have begun operating in Pennsylvania’s Allegheny County by linking private drivers with riders through a smartphone or tablet app.
Lyft and UberX are based in San Francisco, while Yellow X is a part of Yellow Cab that already serves the Pittsburgh area with taxi and private vehicle service. All three, along with the Pennsylvania Association for Justice and the Insurance Federation of Pennsylvania, testified at the hearing. Additional written testimony was submitted by the Pennsylvania Public Utility Commission (PUC) and the Pennsylvania insurance department.
“I applaud such technological advances being made to offer these types of transportation options,” said state Rep. Tina Pickett (R-Bradford/Sullivan/Susquehanna) who chairs the Pennsylvania House insurance committee.
“However,” Rep. Pickett said, “we need to know what entity is providing coverage to both the driver and passenger and when does it start and stop.”
One of the main questions regarding insurance coverage is whether or not drivers are covered by their own personal auto policies and under what circumstances. The ridesharing companies testified at the hearing that they have in place additional excess commercial policies on their companies and drivers.
One of the concerns raised at the hearing was the potential gap in coverage from the time a driver turns on the app until the driver is matched with a passenger, and whether or not that gap is deemed to be commercial. These additional policies are termed as “excess,” meaning they are not primary or secondary policies for drivers.
With the large majority of personal auto policies excluding coverage for any type of commercial enterprise, the excess policies covered by the companies are believed to kick in. However, questions still remain about many of the details and exclusions of the coverage.
Scott Cooper, with the Pennsylvania Association for Justice, suggested at the hearing the committee look at a new law adopted in Colorado that addresses the same types of concerns being raised in Pennsylvania.
In addition, the Insurance Federation of Pennsylvania’s President and CEO Sam Marshall cautioned the committee that insurance companies will be tightening up requirements in auto policies to reflect these types of ridesharing services and that a better effort needs to be coordinated to provide clearer guidance to consumers.
Insurance coverage, along with other concerns, has led the PUC’s Bureau of Investigation and Enforcement to file cease-and-desist orders against Lyft and UberX last week. Meanwhile, Yellow X has filed a successful application with the PUC and is allowed to operate for the next two years.
“The increasing use of ridesharing demonstrates a clear need for these types of inventive transportation solutions and this online network offers a great way to match up riders and passengers,” Rep. Pickett said, “but there are still a number of questions regarding liability and insurance coverage should an accident occur.”
“People have an expectation that when they engage this service and step into a ridesharing vehicle, there will be a way to seek redress should something happen,” Rep. Pickett said.
Source: Pennsylvania House Republican Caucus
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