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Courtesy of PIAA of Ohio, Inc. 4/6/2015

Major Carriers, Trades and Uber Reach Compromise April 6, 2015

Progress is being made in ridesharing, as a national agreement reached on model state legislation may have an impact on Ohio's pending rideshare legislation. Currently, legislation addressing insurance obligations for commercial ridesharing and Transportation Network Companies (TNCs) is being considered in Ohio and nearly every other state's legislature, and a small number of states have already enacted such measures into law. The problem is that TNCs use non-professional drivers in their personal vehicles to deliver commercial rides to the public. Well-known TNCs Uber and Lyft currently operate in Cincinnati, Cleveland, Columbus, Dayton and Toledo, though Lyft “suspended” services in Columbus in Jan. 2015.

Ridesharing is not covered by traditional personal auto insurance policies. Most policies have exclusions that apply when using a vehicle to transport people or property for a fee. But many people falsely believe that when they are riding in a vehicle provided by a TNC platform they are protected as if they were in either a taxi or a friend’s car, with proper auto insurance coverage.

Model legislation gains support
In a recent development, several insurance carrier trade associations and individual insurers reached an agreement with Uber on
model state legislation concerning insurance obligations. In addition to being endorsed by Uber, the model has been endorsed by the American Insurance Association, the National Association of Mutual Insurance Companies, the Property Casualty Insurers Association of America, Farmers Insurance, State Farm and USAA.

Among many other provisions, the model would establish minimum coverage limits during Phase 1 (the period when the rideshare app is on and the driver has not yet received a request for a ride) and Phases 2 and 3 (when the driver has a rider in the car or has accepted a request for ride via the application).

In Phase 1, the TNC, the driver, or a combination of the two would be required to obtain coverage with minimum liability limits of $50,000/$100,000/$25,000 and satisfy any other state compulsory coverage requirements. In Phases 2 and 3, the minimum liability limits would increase to $1,000,000, and other state-required coverages would also be required. In all three phases, the TNC coverage would be primary and would not require a personal auto insurance insurer to deny a claim before coverage is available. In addition, the model does not include several onerous and anti-agent provisions that have been pursued by ridesharing proponents in some states.

What is happening in Ohio?
Bob Hackett (R-London) and Heather Bishoff (D-Blacklick) and Senators Kevin Bacon (R-Minerva Park) and Bill Beagle (R-Tipp City) have introduced legislation to require TNCs or their drivers to provide insurance coverage for their passengers and the public during all phases of the ridesharing experience.

With an agreement now reached for model state legislation, it is likely that Ohio’s pending legislation will be amended to mirror the model. PIAA’s Advocacy Committee has evaluated the model legislation and is supportive, since it accomplishes our goal of establishing a bright‐line and clearly defined legal standard that when a TNC driver has logged on to their app and is available for business, enhanced insurance coverage requirements must be in effect to properly protect passengers, drivers and the public

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Jamie said...
This legislation is a step in the right direction, but my understanding after having read the compromise legislation agreement is that it still leaves the driver without comprehensive or collision insurance covering any damage to their vehicle, or personal injury that may arise from an accident during any one of the three phases established by the legislation. The TNC is not required to provide that coverage and the drivers personal insurance carrier is not required to provide any coverage while the App is active.
WEDNESDAY, MAY 06 2015 1:41 PM
Ben Kerns said...
Jamie... Thank you for posting a comment! And you may be correct. The driver’s vehicle may not be covered for physical damage while they’re waiting for a fare. Uber’s insurance does provide contingent comprehensive and collision coverage with $1000 deductibles once a fare has been accepted and a rider is in the vehicle. This, however, leaves the driver in coverage limbo, so to speak, while the App is on and waiting for a fare. It’s safe to assume that the driver’s personal auto insurance carrier and the TNC’s insurance may still deny coverage during this phase or any other phase based on the circumstances. Another interesting coverage gap is the personal injury to the driver. There is Uninsured/Underinsured Motorists coverage during a trip/fare but no mention of Medical Payments or Workers Compensation. These coverage gaps may put the onus on the driver to weigh individually and possibly self-insure.
WEDNESDAY, MAY 06 2015 2:42 PM
Jamie said...
I just wanted to follow up on our conversation here. I spoke with Representative Hackett today. He Chairs the State House committee on Insurance which Im sure you already knew. We had a great coversation. He too was concerned about a lack of comprehensive and collision coverage for that first phase as defined by the Model Legislation for TNCs. He also stated that in discussions with the TNCs and Insurance Carriers the comprehensive/collision coverage would be addressed by either the creation of a policy addendum to our personal plans or it would be moved under the umbrella of coverage that the TNCs provide during Phases 2 and 3 but only for those drivers that opted to have that additional coverage. The desire on everyones part was to not legislate a blanket requirement for comprehensive/collision coverage during Phase 1 because some drivers may choose to self-insure or feel the value of their vehicle doesnt warrant that coverage.
FRIDAY, MAY 08 2015 1:12 PM

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