American Property Casualty Insurance Association
  • Staff Contact: Jeffrey Brewer     
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  • February 4, 2015
  • TNC Insurance Coverage Gaps Addressed by Kentucky Legislation
  • LEXINGTON, KY - Legislation (HB 207) introduced yesterday takes a positive step forward in ensuring that transportation network companies such as Uber and Lyft, which provide commercial ridesharing services, have consumer protections including appropriate insurance coverage, according to the Property Casualty Insurers Association of America (PCI).

    While the Kentucky Transportation Cabinet implemented emergency regulations late last year and are considering permanent rules that establish a new regulatory framework for TNCs, there are still concerns that there are insurance coverage gaps that exist for commercial rideshare drivers. However, the legislation sponsored by Representative Jeff Greer, (D-Brandenburg), will address these concerns and require TNCs to have primary liability insurance coverage for drivers of no less than $1,000,000, while engaged in a prearranged ride and a pre-trip acceptance primary liability insurance policy for drivers of no less than $50,000 for death and personal injury per person, $100,000 dollars for death and personal injury per incident, and $25,000 for property damage during the periods of time when the driver is logged into a TNC mobile application and available to receive requests for TNC services.

    “This legislation is a very good start toward ensuring that ride sharing activities are properly insured and that drivers, passengers and the public are protected if there is an accident,” said Jeffrey Junkas, regional manager for PCI. “PCI strongly supports innovation and competitive markets however, innovation and consumer protection are not mutually exclusive. Consequently, it is very important that a ‘bright line rule’ of specific TNC insurance coverage requirements from ‘app on to app off’ be established. We want to be sure any regulatory scheme related to TNCs does not leave TNC drivers and innocent third parties exposed to costs, delays and potentially lengthy litigation for any injuries or damages for accidents.

    PCI testified before the Transportation Cabinet Jan. 22 during a public hearing on setting permanent regulations and highlighted that there continues to be a coverage gap during what is often called “period one” when the app is on but the driver has not accepted a request. 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.

    “Commercial ride share drivers frequently use their personal vehicles and there are questions whether they have the proper insurance coverage,” said Junkas. “House Bill 207 closes the insurance coverage gap for period one and brings clarity so that all stakeholders have a clear expectation regarding what coverage is being provided, when it’s being provided and by whom.”
  • PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $195 billion in annual premium, 35 percent of the nation's property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 28 percent of the homeowners market, 33 percent of the commercial property and liability market and 35 percent of the private workers compensation market.
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