The sharing economy is here to stay and is no doubt flourishing.
From Airbnb to ridesharing, it is an exciting time for consumers as new products and services continue to enter the marketplace. Transportation Network Companies (TNCs), such as Uber and Lyft, brought a new way of getting around town not just in Florida, but in nearly every major city in the world.
As TNCs exploded in popularity, so did the question of regulation and consumer protections, especially when it came to auto insurance coverage. In Florida, there is a gray area regarding coverage that can leave rideshare drivers and passengers at financial risk if they are involved in an auto accident.
Personal auto insurance policies are not intended for commercial use and will not cover damages if it’s determined the driver was using his or her vehicle for hire.
The Property Casualty Insurers Association of America (PCI) and the insurance industry worked closely with TNCs on how to best address the insurance gaps and protect drivers and passengers. In March 2015 PCI joined other national insurance trade associations, which combined represent hundreds of auto insurance companies, and TNCs in developing a model bill. It provides a framework for legislation that will help bring clarity and consistency to TNC insurance laws while allowing innovation to thrive.
In Florida, lawmakers are once again working toward a solution that protects consumers by requiring that TNC drivers have adequate insurance coverage from the time the rideshare app is turned on to the time the app is turned off. Bills have been introduced in both the Senate and the House, and although there are some differences to be worked out, the bills are a great start to addressing insurance coverage requirements for TNC drivers.
While these issues are being worked out, the insurance industry is doing our part to innovate along with the economy and the companies and consumers we serve. Many auto insurance companies have started writing policies geared to the needs of TNCs and their drivers. Our goal is to not only ensure the public is protected, but to also support innovative new companies and business models.
We want to make sure all TNC drivers and passengers are safe by offering the type of coverage they need to operate with confidence they are covered if an accident were to occur. However, we still need policymakers to take action to clarify the necessary insurance requirements for TNC drivers and provide clear direction on what insurance coverage kicks in and when. Until that time, drivers and passengers will continue to operate in a gray area.
As lawmakers in Tallahassee continue to debate on the best solution for Floridians, they should remember that although it is vitally important vehicles used in TNC services are properly insured, the insurance requirements need to be reasonable for TNCs and their drivers. The model legislation, which has been passed in some form by 29 other states, strikes the right balance between protecting consumers and supporting innovation.
PCI commends Sen. David Simmons and Rep. Matt Gaetz taking action to address these issues. PCI, along with our members, hope that lawmakers arrive at a much-needed solution that protects consumers and puts the necessary insurance coverage requirements in place.
Logan McFaddin is Regional Manager of State Government Relations for the Property Casualty Insurers Association of America. Column courtesy of Context Florida.