Ride-booking insurance priority for legislators
Over the next few years, there’s no doubt the sharing economy will continue to flourish, which makes it an exciting time for consumers who will see innovative new products enter the market. As an example, within the past year or so, transportation network companies such as Uber and Lyft brought a new business model to the traditional taxi industry and set up operations in every major cit y in Florida. Passengers are now able to connect with drivers in their area and pay for their service all through an app on their smartphones. Uber drivers have already made 6 million journeys to date in the Sunshine State.
As TNCs have exploded in popularit y, they have also sparked an intense debate regarding consumer protections and auto insurance coverage. This debate centers on when auto insurance coverage provided through TNCs kicks in. Currently, there is a gray area regarding coverage that could leave drivers and passengers at financial risk if there were an accident. Personal auto insurance policies are not intended for commercial use and will not cover damages if it’s determined the driver was using their vehicle for hire. Transportation network company drivers need to know that they might not have the proper coverage when they are driving for one of these services.
The Property Casualt y Insurers Association of America and the insurance industry support new business models and competition in the marketplace and is working closely with TNCs on how to best address the existing insurance gaps and protect drivers, passengers and the public. The TNC Insurance Model Compromise Bill provides a framework for legislation that will help bring clarit y and consistency to TNC insurance laws, enhance consumer choice, increase entrepreneurial activit y and bring greater stability and confidence to the transportation network industry.
During the 2015 Florida legislative session, bills were introduced in both the Senate and House to address these critical issues in order to protect the public. Both SB 1298 and HB 817 were beginning to closely reflect the compromise language that had been agreed upon by the insurance industry and TNCs. Unfortunately, the sudden end to the legislative session prevented these vital bills from coming to a full vote on the floor.
Both bills would have helped to clear up the gray around insurance coverage for TNCs and provided the necessary protections for drivers, passengers and the public from the time the app is turned on until the app is turned off. Other states have adopted insurance coverage parameters, including California, Colorado and Georgia. These new laws will help the insurance market tailor solutions and products to this industry.
Florida was making significant progress on this issue during the 2015 leg- islative session. We hope as legislators return to Tallahassee for a special session they can continue their work and see it through with a solid bill that protects all consumers. However, if they wait until 2016 to address TNC insurance gaps, there will be several more months where drivers may not be adequately protected by insurance. That could mean thousands of dollars in damages that they would have to pay out-ofpocket if there were an accident.