The House of Representatives is expected to consider and debate legislation recently released by the Financial Services Committee, which would regulate Transportation Network Companies (TNCs) like Uber and Lyft. TNCs and their drivers would be overseen by a new regulatory “Ride For Hire Division” under the Department of Public Utilities (DPU). The new division would be responsible for licensing the TNC companies and drivers, enforcing penalties, requiring background checks for drivers, and setting forth insurance requirements that the TNC companies must carry for their drivers, including a $1 million policy covering a driver from the time a fare is accepted until the passenger leaves the vehicle.
As part of the insurance requirement, ride-for-hire drivers (Uber and Lyft) would be required to notify their insurance carriers that their vehicles will be used for commercial passenger transportation.
According to a story in the State House News Service, Representative Aaron Michlewitz, the House chair of the Financial Services Committee, said, “We were told without notifying the carriers that for these cars being used as TNCs, even for a short period, it was creating gaps in insurance if an accident did occur.”
A brief overview of the insurance requirements outlined in the legislation is the following:
The insurance requirements set forth in this subsection shall constitute adequate insurance and satisfy the financial responsibility requirements for a transportation network company vehicle, taxicab, or livery vehicle.
1. The following automobile insurance requirements shall apply to a “ ride for hire policy” while a driver affiliated with the transportation network company is logged onto the transportation network company’s digital network and is available to receive transportation requests but is not engaged in a prearranged ride or while a taxicab or livery driver is operating and is available to receive passengers but is not engaged in a prearranged ride:
(A) Automobile liability insurance that provides per occurrence, per vehicle coverage amounting to at least $50,000 of coverage per individual for bodily injury, $100,000 of total coverage for bodily injury, $30,000 of coverage for property damage, uninsured motorist coverage to the extent required by section 113L of chapter 175, and personal injury protection to the extent required by section 34A of chapter 90;
(B) The ride-for-hire driver may hold the insurance, the ride-for-hire company, or some combination thereof.
(C) In every instance where insurance maintained by a ride-for-hire driver to fulfill the insurance requirements outlined in subsection (b) has lapsed, failed to provide the required coverage, denied a claim for the necessary coverage, or otherwise ceased to exist, insurance maintained by a ride for hire company shall provide the coverage required by subsection (b) beginning with the first dollar of a claim. It shall have the duty to investigate and defend such claim.
(D) Coverage under an automobile insurance policy maintained by the ride-for-hire company shall not depend on a personal automobile insurer first denying a claim, nor shall a personal automobile insurer be required first to deny a claim.
(E) Insurance required by this section must be placed with an insurer authorized to do business in the state or, if such coverage is not available at a reasonable rate from any admitted carrier, then with a surplus lines insurer eligible under section 168 of chapter 175.
A “Ride for Hire Policy,” as set out above, is not currently available for cabs and liveries. The bill requires that the Division of Insurance and the “Ride for Hire” Division under DPU establish regulations so these policies become available to taxis and liveries. To read a SUMMARY of the bill’s provisions, click here.
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