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Transportation Network Companies: Insurance Requirements


   

CS/HB 221

Insurance Requirements 

p. 7–14, §627.748 

Requires, a TNC driver, or a TNC on behalf of the TNC driver to maintain primary automobile insurance that recognizes that the TNC driver is a TNC driver or otherwise uses a vehicle to transport riders for compensation; and covers the TNC driver while the TNC driver is logged on to the TNC’s digital network or while the TNC driver is engaged in a prearranged ride, beginning July 1, 2017.

Requires the TNC or TNC driver, when logged on to the digital network but not engaged in a prearranged ride, to have automobile insurance that provides:

  • Primary automobile liability coverage of at least $50,000 for death and bodily injury per person, $100,000 for death and bodily injury per incident, and $25,000 for property damage.
  • Personal injury protection benefits that meet the minimum coverage amounts required under the Florida Motor Vehicle No-Fault Law. The amount of insurance required is $10,000 for emergency medical disability, $2,500 non-emergency medical, and $5,000 for death. It is notable that no-fault coverage is for the named insured (TNC driver), relatives residing in the same household, persons operating the insured motor vehicle, riders in the motor vehicle, and other persons struck by the motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle.
  • Uninsured and underinsured vehicle coverage.

Requires that when a TNC driver is engaged in a prearranged ride, automobile insurance must provide:

  • Primary automobile liability coverage of at least $1 million for death, bodily injury, and property damage.
  • Personal injury protection benefits that meet the minimum coverage amounts required of a limousine under the Florida Motor Vehicle No-Fault Law. Pursuant to s. 627.733(1)(a), F.S., limousines are exempt from the Florida Motor Vehicle No-Fault Law. However, if the Legislature removes this exemption or makes certain parts of the Florida Motor Vehicle No-Fault Law applicable to limousines, the changes in that law would also apply to TNCs and their drivers.
  • Uninsured and underinsured vehicle coverage.

The coverage requirements may be satisfied by automobile insurance maintained by the TNC driver, an automobile insurance policy maintained by the TNC, or a combination of automobile insurance policies maintained by the TNC driver and the TNC.

For purposes of comparison, §324.032, F.S., requires for-hire passenger transportation vehicles to carry limits of $125,000/$250,000 for bodily injury and $50,000 for property damage. The bill requires less coverage than required for for-hire passenger transportation vehicles when a driver is logged onto the TNCs digital network, but is not engaged in TNC service. However, the bill requires more coverage than required for for-hire passenger transportation vehicles when a driver is engaged in providing TNC service. 

Provides that if the TNC driver's insurance policy has lapsed or does not provide the required coverage, the insurance maintained by the TNC must provide the required coverage, beginning with the first dollar of a claim, and have the duty to defend such claim. Coverage under an automobile insurance policy maintained by the TNC must not be dependent on a personal automobile insurer first denying a claim, and a personal automobile insurance policy is not required to first deny a claim. The required insurance must be provided by an insurer authorized to do business in this state which is a member of the Florida Insurance Guaranty Association or an eligible surplus lines insurer that has a superior, excellent, exceptional, or equivalent financial strength rating by a rating agency acceptable to the Office of Insurance Regulation (OIR).

Insurance satisfying the above requirements is deemed to satisfy the financial responsibility requirement for a motor vehicle under the Financial Responsibility Law of 1955 and the security required under §627.733, F.S., for any period when the TNC driver is logged onto the digital network or engaged in a prearranged ride. 

Requires a TNC driver to carry proof of insurance coverage with him or her at all times while using a TNC vehicle in connection with a digital network. In the event of an accident, a TNC driver must provide this insurance coverage information to any party directly involved in the accident or the party’s designated representative, automobile insurers, and investigating police officers. Proof of financial responsibility may be presented through an electronic device, such as a digital phone application. Upon request, a TNC driver must also disclose to any party directly involved in the accident or the party’s designated representative, automobile insurers, and investigating police officers whether the driver was logged on to a digital network or was engaged in a prearranged ride at the time of the accident.

Provides that if a TNC's insurer makes a payment for a claim covered under comprehensive coverage or collision coverage, the TNC must cause its insurer to issue the payment directly to the business repairing the vehicle or jointly to the owner of the vehicle and the primary lienholder on the covered vehicle.

Requires the TNC to disclose to the TNC driver, before a TNC driver can accept a request for a prearranged ride on the digital network, in writing:

  • The insurance coverage, including the types of coverage and the limits for each coverage, which the TNC provides while the TNC driver uses a TNC vehicle in connection with the TNC's digital network;
  • That the TNC driver's own automobile insurance policy might not provide any coverage while the TNC driver is logged on to the digital network or is engaged in a prearranged ride depending on the terms of the TNC driver's own automobile insurance policy; and
  • That the provision of rides for compensation that are not prearranged rides subjects the TNC driver to the coverage requirements imposed under §324.032(1), F.S., and that failure to meet such coverage requirements subjects the TNC driver to penalties provided in §324.221, F.S., up to and including a misdemeanor of the second degree.

Allows an insurer that provides an automobile liability insurance policy under part XI of Chapter 627, F.S., may exclude any and all coverage afforded under the policy issued to an owner or operator of a TNC vehicle while driving that vehicle for any loss or injury that occurs while a TNC driver is logged on to a digital network or while a TNC driver provides a prearranged ride. This right to exclude all coverage may apply to any coverage included in an automobile insurance policy, including, but not limited to:

  • Liability coverage for bodily injury and property damage;
  • Uninsured and underinsured motorist coverage;
  • Medical payments coverage;
  • Comprehensive physical damage coverage;
  • Collision physical damage coverage; and
  • Personal injury protection.

The exclusions apply notwithstanding any requirement under the Financial Responsibility Law of 1955.

Does not require a personal automobile insurance policy to provide coverage while the TNC driver is logged on to a digital network, while the TNC driver is engaged in a prearranged ride, or while the TNC driver otherwise uses a vehicle to transport riders for compensation.

The bill’s insurance provisions must not be construed to require an insurer to use any particular policy language or reference the above statutes in order to exclude any and all coverage for any loss or injury that occurs while a TNC driver is logged on to a digital network or while a TNC driver provides a prearranged ride. The bill does not preclude an insurer from providing primary or excess coverage for the TNC driver's vehicle by contract or endorsement. 

Provides that an automobile insurer that excludes the coverage described above does not have a duty to defend or indemnify any claim expressly excluded thereunder. The bill does not invalidate or limit an exclusion contained in a policy for vehicles used to carry persons or property for a charge or available for hire by the public, including a policy in use or approved for use in this state before July 1, 2017. An automobile insurer that defends or indemnifies a claim against a TNC driver, which is excluded under the terms of the policy, has a right of contribution against other insurers that provide automobile insurance to the same TNC driver in satisfaction of the coverage requirements of §316.68(7), F.S., at the time of loss.

Provides that in a claims coverage investigation and upon request by a directly involved party or any insurer of the TNC driver, a TNC must immediately provide the precise times that the TNC driver logged on and off the digital network in the 12-hour period immediately preceding and in the 12-hour period immediately following the accident. Upon request by any other insurer involved in the particular claim, an insurer providing coverage pursuant to §316.68, F.S., must disclose, the applicable coverages, exclusions, and limits provided under any automobile insurance maintained in order to satisfy the bill’s insurance requirements.

HB 221 provides the necessary regulatory framework for transportation network companies to operate throughout Florida without regard for local/municipal ordinances. The bill also clearly defines when “commercial use” begins, which will allow insurers to appropriately price TNC endorsements to the personal auto policy. 

Effective date: July 1, 2017
Chapter No. 2017-12, LOF
 

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