The rapidly expanding use of smartphone-app-enabled ride sharing, or transportation network company (TNC), services such as Uber and Lyft raised public policy issues affecting insurers offering private passenger auto insurance products, ride-sharing drivers, passengers, and the public.
Significant issues include a potential gap in coverage between the commercial auto coverage provided by TNCs and the personal auto coverage purchased by a driver, a lack of knowledge on the part of drivers regarding their insurance coverage, and duties to share information following an accident. The insurance industry position has been that the driver is engaged in commercial activity as soon as he/she has logged on to the app or has made himself/herself available to be matched up with a passenger. TNCs initially held that commercial activity does not begin until the passenger enters the vehicle or has been matched with a rider.
In NAMIC’s view, any ride-sharing public policy measures should recognize the distinction between commercial and personal insurance exposure risk. As such, public policy measures should recognize that a driver is engaged in commercial activity as soon as he/she has logged in to the TNC system or is available to be matched with a passenger.
Measures should also recognize that insurers innovate and compete by developing new products for the market and should therefore not prevent insurers from developing products specifically aimed at developing technologies and related activities. On the other hand, any new coverages that may be developed should not be mandated but rather should be provided only on a voluntary basis with underwriting and rating freedom.
NAMIC believes that measures to promote awareness of coverage gaps among potential drivers and passengers are appropriate, and supports of the NCOIL TNC Model Act, a compromise agreement between the TNC industry and the insurance industry.