Uber Adds 10K Drivers to Ohio, While Insurance Issues Abound

Oct. 22, 2015
Uber announced it will double its workforce in Ohio next year, while legislators consider statewide regulations on rideshare services, but a critical question remains. Is there sufficient insurance coverage when a rideshare driver causes an accident? The answer continues to be “maybe.” The complexity and evolution of ridesharing has not decreased since our last update in July.

The current situation
Engaging in ridesharing without proper insurance coverage can turn into a serious problem for rideshare participants if an accident occurs. And getting proper coverage is also a problem. The extent of insurance coverage and who is liable continue to hinge on several variables, including who the insurer is, which transportation networking company (TNC) the rideshare driver is registered with, and what the rideshare driver was doing at the time of the crash (waiting for a request for a ride, transporting a passenger or traveling to pick up a passenger whose ride request the driver has already accepted).

At the heart of the issue is the fact that a personal vehicle covered by personal auto insurance is being used for commercial or livery purposes (but is not subject to the regulations of a livery service), and that neither TNCs nor drivers are required to provide insurance coverage for passengers and the public at all phases of the rideshare experience.

Further complexities abound. For example, many insurance companies will not renew insurance or will deny a claim if they learn a driver was using their personal vehicle for ridesharing. The ISO personal auto policy contains an exclusion for liability coverage for any vehicle being used as a public or livery conveyance. Most Ohio carriers that work with independent agents do not currently offer coverage to consumers.

A late-August accident in Columbus where a woman was run over by an SUV registered with Uber is under investigation, but under current Ohio law, deciding who is liable could get complicated, illustrating the insurance risks of ridesharing.

Looking for answers
Consumer demand might force carriers to offer affordable, rideshare-specific coverage options.

Pending legislation will change the landscape if adopted, but the impact of such changes is all unknown. OIA has been advocating for Ohio legislators to pass legislation introduced earlier this year to establish a bright-line legal standard for proper insurance coverage to be provided by either a Transportation Networking Company (TNC) or by a TNC driver. The legislation was introduced by Reps. Bob Hackett (R-London) and Mike Duffey (R-Worthington). Modeled after a national compromise, if this legislation passes, it will establish minimum coverage limits during all phases of the ridesharing process.

• In phase one, the period when the rideshare app is on and the driver has not yet received a request for a ride, the transportation networking company (TNC), driver or a combination of the two would be required to obtain coverage with minimum liability limits of $50,000/$100,000/$25,000 and satisfy any other state compulsory coverage requirements.

• In phases two and three, when the driver has a rider in the car or has accepted a request for a ride via the app, the minimum liability limits would increase to $1,000,000, and other state-required coverages would also be required.

• In all three phases, the TNC coverage would be primary and would not require a personal auto insurer to deny a claim before coverage is available.

John Koetz (left) with Sen. Bill Seitz, a member of the Senate committee holding hearings on proposed rideshare legislation.
OIA member John Koetz, CIC, CPCU of W.E. Davis Insurance, has testified in support of this pending legislation in both the House and Senate. The legislation is making its way through the Senate after passing the House unanimously in June.

Read more about ridesharing/TNC legislative advocacy resources and issues.

Resources and advice for agents
How do you make sense of all of this and what do you say to clients right now? Our advice is to check with your carriers to see how they are responding to this changing marketplace issue.

Use our updated materials to inform consumers about the risks of ridesharing via blog, website, social media or print.

These materials replace all previous resources, and we suggest you have a plan in place of what kind of guidance your agency will provide for clients.

Print our updated consumer flyer.

Download a Microsoft Word article to copy and paste to your blog or website.

Copy and share one of these social media posts that link to our rideshare flyer:
- Want to be a rideshare passenger or driver? Know the risks. bit.ly/1jYC8uL
- What is ridesharing and is it safe to participate? bit.ly/1jYC8uL
- Uber, Lyft and other rideshare services – are there risks to know before you participate? bit.ly/1jYC8uL

Access other OIA client-marketing resources.



 

   
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