Transportation network companies such as Uber and Lyft represent a promising technology that can serve consumers well in the future, but Florida legislators should clarify the insurance requirements for these services in state law in order to adequately protect both drivers and passengers, according to a statement by the Personal Insurance Federation of Florida (PIFF).
PIFF issued its position on the “Transportation Network Companies” (TNCs) as the Florida Senate and House take up bills that will address the legal, regulatory and insurance requirements for TNCs – an increasingly popular alternative for consumers.
PIFF released a set of guiding principles on insurance coverages that it asked lawmakers to consider as they craft legislation this session:
- Market Innovation – PIFF believes clear guidelines for TNC insurance will help spur innovation in the insurance and transportation network markets.
- Insurance Product Certainty – For private passenger auto policies, this means preserving the “livery” or “for hire” exclusions from a policy and providing related clarity in the law. PIFF believes that the Legislature should:
- Preserve the enforceability of private passenger automobile policy language to exclude “livery” or “for hire” operation of a motor vehicle.
- Preserve the ability of auto insurers to take rating and underwriting action in accordance with the risk insured, including TNC activity, in private passenger automobile policies.
- Protect TNC Consumers by Defining TNC Activity and TNC Insurance Requirements- Ensure that TNC drivers are adequately covered for their commercial activities, which will protect them and their customers. To do so, PIFF says that the Legislature should:
- Define TNC activity as the period of time a driver is logged onto the TNC’s app to the time the driver logs off or the ride is completed and the passenger has exited the vehicle, whichever is later.
- Require that TNCs and/or TNC drivers carry primary coverage that specifically covers TNC activity as defined and require the TNC to demonstrate that required coverage in the given jurisdiction is in place during this period.
- Provide Clarity to Avoid Legal Disputes – Avoid unnecessary claims against private passenger auto carriers and related litigation by making the law clear as to who has the duty to defend the TNC driver and to require the sharing of information between the TNC and private passenger auto carriers. PIFF believes that the law should provide the following:
- In the event of a dispute about whether the driver was engaged in TNC activities as defined, require the insurer that specifically covers TNC activity to defend the driver until the dispute is resolved.
- The TNC shall share data and information in a timely fashion to facilitate resolution of the dispute.
“TNCs such as Uber and Lyft are transforming the ‘for hire’ transportation industry, and we believe that Florida should be at the forefront of adopting legislation protecting consumers,” said Michael Carlson, PIFF’s executive directior. “While these services can offer a new option and convenience to consumers, it is also critical that lawmakers clarify the insurance requirements for them in state law so that both the drivers working for the services and their passengers are adequately protected.”
PIFF is a trade association whose charter members – Allstate and Castle Key Insurance Companies, the Progressive Group of Insurance Companies and State Farm Insurance Companies – represent about 45 percent of the auto insurance market in Florida.
While most insurers do not currently provide insurance products that cover TNC-related activities, generally speaking the insurance industry has been actively studying the growth and popularity of TNC business with an eye toward providing products that will serve this emerging market, Carlson said.
Given that ride-sharing services rely on drivers who are using their personal vehicles to transport passengers for hire, PIFF believes it is critical that the Legislature specify in state law the commercial insurance coverage that TNCs must provide to their drivers, by the TNC, the driver, or a combination of the two. Private passenger auto coverage is not intended to cover commercial activities such as trolling for fares or carrying passengers on a for-hire basis, which is exactly what the TNC activities include.
PIFF members believe that TNC coverage should be the primary insurance coverage for both drivers and their passengers during all phases of TNC activity. Commercial coverage should begin the moment the driver turns on the ride-sharing application and should continue until the driver is no longer seeking paying passengers and the application is turned off, Carlson said.
“Simply put, this technology and its popularity with consumers has grown so quickly that state laws and auto insurance requirements are playing catch-up,” Carlson said. “PIFF supports legislation that will protect TNC consumers and TNC drivers using their personal vehicles by requiring that the commercial activities be insured through the TNC, its driver, or the TNC and its driver. The coverage must be primary, with the initial duty to investigate and defend any claims during TNC activity being the responsiblity of the TNC and its driver – not the driver’s personal auto insurance provider.”
PIFF said it looks forward to working collaboratively with legislators, TNCs, other auto insurers and consumers as the Legislature works on bills regarding these promising new technologies this session, Carlson said.
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