California Commissioner: TNCs Responsible for Insurance

April 9, 2014

Updated story: California Commissioner Wants Insurance Burden on Ridesharing Companies

Transportation Network Companies like such as Uber, Lyft and Sidecar should bear the insurance burden when they encourage non-professional drivers to use their personal vehicles to transport passengers for a profit, said California Insurance Commissioner Dave Jones.

Jones’ recommendation was made to the California Public Utilities Commission, which oversees TNCs in California. His recommendation stems from a recent Department of Insurance investigative hearing in which insurers, TNC operators and taxi and limo operators squared off on the issue of how insurance should be handled.

dave-jones“While smartphone technology is bringing new business opportunities to the marketplace and new transportation choices for consumers, our investigative hearing revealed serious insurance gaps in the current business model of transportation network companies such as Uber, Lyft and Sidecar,” Jones said in a statement. “As long as TNCs are encouraging non-professional drivers to use their personal vehicles to drive passengers for a profit, a risk which personal automobile insurance simply does not cover, TNCs should bear the burden of making sure that insurance is provided. Our recommendations will ensure there is insurance protection for passengers, drivers and pedestrians.”

Jones’ recommendations include:

  • Requiring TNCs to provide $1 million commercial liability insurance that begins the moment a driver switches on the app;
  • Requiring TNCs to provide $1 million uninsured/underinsured coverage to protect the driver and passenger;
  • Requiring TNCs to provide insurance policy information to TNC drivers to carry in their cars;
  • Requiring TNCs to disclose to drivers that their personal auto insurance coverages may not apply while they drive for the TNC;
  • Requiring TNCs to provide comprehensive and collision coverage for the driver’s auto if the driver has those coverages on the driver’s own policy;
  • Legislature should revisit the ridesharing and casual carpooling laws to allow for apps that match not-for-profit drivers with casual riders.

The commissioner’s letter and complete recommendations to the CPUC can be found on the department’s website.

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