American Property Casualty Insurance Association
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Nicole Mahrt-Ganley


916-616-5855 or 916-479-2670





February 18, 2014

Beware Drivers and Passengers: Ride-Sharing Companies Shifting Insurance Responsibility to All Drivers

Insurers warn legislators that ride-sharing companies are trying to make all drivers cover their insurance costs


PHOENIX - Today members of the Arizona House Governance Committee will consider legislation (HB 2273) being advanced by a ride-sharing company that shifts insurance responsibility and costs from ride-sharing firms and ride-sharing drivers to other Arizona drivers who do not drive for ride-sharing companies, says the Property Casualty Insurers Association of America (PCI).

Ride-sharing is a new transportation trend in major cities around the country where a company uses a smartphone app to connect drivers with fee paying riders as part of an organized program. House Bill 2273 limits the ride-sharing company’s insurance coverage to an excess policy and new amendments improperly redefine the livery exclusion in all personal auto insurance policies.

“House Bill 2273 is moving in the wrong direction and the ride-sharing company’s new amendments will allow them to duck their responsibility to provide appropriate insurance coverage,” said Kelly Campbell, PCI vice president for state government relations. “Insurers support innovation but the personal and financial safety of consumers, passengers and drivers must be protected. Additionally, it is not fair or appropriate for one business to alter another industry’s contract to accommodate their profit. Arizona legislators should reject these latest amendments and consider a bill that will appropriately protect consumers.”

Personal auto insurance policies are not intended for commercial activities and contain a specific “livery” exclusion which bars coverage if the car is used to transport passengers for a fee. These exclusions have been upheld in the courts for decades. To remove any ambiguity, PCI encourages that legislation on this matter include clear disclosure requirements by the ride-sharing program about what insurance coverage they provide to the driver and that the driver’s personal auto policy will not cover property damage.

“Insurance is part of the normal cost of doing business and ride-sharing programs should not shift their costs onto all other drivers,” said Campbell. “House Members should reject HB 2273 and the striker amendments to protect all Arizona drivers and passengers. Circumventing livery exclusions would make everyone pay for the activities of a few drivers and ride-sharing companies.”

Legislation on this issue has been introduced in Arizona, Colorado, Georgia and Oklahoma. Local ordinances governing ride-sharing programs have been introduced in Chicago, Dallas and Seattle.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $195 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 46 percent of the U.S. automobile insurance market, 32 percent of the homeowners market, 37 percent of the commercial property and liability market, and 41 percent of the private workers compensation market.