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Sun Sentinel: Legislature must address insurance gap during special session

Tuesday, May 26, 2015

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 last 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 most major cities. Passengers are now able to connect with drivers in their area and pay for their service through an app on their smartphone. Uber drivers have already made 6 million journeys to date in the Sunshine State.

As TNCs have exploded in popularity, 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. It’s essentially trying to figure out who is responsible for what and when.

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 for drivers using their vehicles for hire. Transportation network company drivers need to know that they might not have the proper insurance coverage when they are driving for one of these services.

The Property Casualty Insurers Association of America and the insurance industry supports 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 clarity and consistency to TNC insurance laws, enhance consumer choice, increase entrepreneurial activity 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 insurance issues 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 session prevented these bills from coming to a full vote on the floor.

Senate Bill 1298 and House Bill 817 would have helped to clear up insurance coverage for TNCs and provided the necessary protections for ride-share drivers, passengers and the public from the time the ride-share app is turned on until the app is turned off.

Florida was making significant progress on this issue during the 2015 legislative session. We hope as lawmakers return for a special session they can 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 ride-share drivers may not be adequately protected by insurance. That could mean thousands of dollars in damages that they would have to pay out-of-pocket if there were an accident. We encourage ride-share drivers to contact their insurance companies and ask if they have the protection they need.

Logan McFaddin is regional manager of state government relations for the Property Casualty Insurers Association of America.

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