American Property Casualty Insurance Association
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Jeffrey Brewer







March 13, 2014

PCI Tells Illinois Lawmakers Greater Clarity is Needed on Ride Sharing Insurance Issues


CHICAGO - The Property Casualty Insurers Association of America (PCI) testified today before the Illinois Senate Transportation Committee in Chicago that ride sharing as a business model presents a number of insurance issues that need to be addressed to protect the interests of ride sharing drivers, passengers, other drivers on the roads, and commercial ride sharing companies.

“It is vitally important that the vehicles used by commercial ride-sharing services are properly insured and the public is protected,” said Robert Passmore, senior director of personal lines for PCI. “While we do not oppose ride sharing, we believe that the rules of the road pertaining to insurance coverage should be clarified so that all stakeholders have a clear expectation regarding what coverage is being provided, when it’s being provided and by whom.”

Ridesharing has stirred a lot controversy in the Chicago area and now the Illinois Senate Transportation Committee is examining the insurance aspects of this issue. Ride share drivers frequently use their personal vehicles and there are questions whether they have the proper insurance coverage.

Most personal automobile policies contain exclusions for vehicles being operated as a “livery” or to carry persons or property for a fee, so there would likely be no coverage on the driver’s personal auto policy for injuries or damage arising out of an accident that occurred while involved in ride sharing activities. Coverage would likely also be excluded for damage to the vehicle, medical payments, and uninsured or underinsured motorist coverage.

“The reason for the exclusion is simple, these kinds of activities present a significantly different and increased exposure to loss than personal automobile policies are intended to cover,” said Passmore. “While the ride sharing companies advertise that they provide insurance coverage, it is not always clear if these policies will provide primary coverage should the driver’s coverage not apply. As a result we believe there are some essential elements that need to be addressed to deal with the insurance issues involved with commercial ride sharing.”

PCI’s supports the inclusion of the following essential elements in any approach addressing insurance issues associated with ride sharing.

1.    Preserve current case law regarding the livery exclusion in personal lines automobile insurance. Legislation introduced in other states have attempted to undermine the livery exclusion by changing the definition of a traditional share the expense car pool, a private passenger auto or personal automobile coverage. In effect, requiring all drivers to subsidize coverage for ride sharing companies and their drivers.

2.    Establish a “bright line” rule defining when commercial ride sharing activities are taking place. Because ride share drivers will often position themselves to increase their likelihood of getting a match this definition should be based on the driver making him or herself available in the system and that drivers should have insurance coverage that specifically covers ride sharing activities during that period of time, and obligating the ride sharing company to ensure that that coverage is in force.

3.    Ride sharing company should provide clear disclosures regarding insurance coverage to ride share drivers. The ride share companies should disclose to drivers the insurance coverages they provide, and notify them that their personal automobile policy will not provide coverage for injuries or damage resulting from commercial ride sharing.

“These new and innovative programs represent an opportunity for insurers and we would encourage legislators and regulators to be careful not to preclude innovation in the insurance industry to respond to changes in how consumers use their vehicles in the future,” said Passmore. “We appreciate the Senate Transportation Committee’s ongoing willingness to discuss these issues and thank the committee for holding this hearing to discuss these issues. We look forward to continuing these discussions and working together with all stakeholders as we move forward on this issue.”

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.