With the passage of legislation in 2017 relating to “transportation network companies” (TNCs), there will no doubt be numerous personal auto insurers entering the market to add coverage to the personal auto policy (PAP) to protect those who are driving for these services. Companies like Uber and Lyft are the most well-known entities involved with this relatively new enterprise, but there are many other services similar in nature. To best understand TNCs and the insurance aspect, it is necessary to look at the statutory wording, the PAP, and coverage provided by the TNC. This discussion focuses on the standard Insurance Services Offices (ISO) PAP; it’s essential to review specific policies as many differ.

While there is no firm data, records released by Uber (just one of the TNCs) showed over 160,000 drivers for the firm in 2015. That number has certainly increased over the past few years. It’s likely accurate to say that few drivers who work for a TNC consider the implications of how they are using their vehicle.

The legislation passed in Florida in 2017 addresses liability, PIP, and uninsured motorist coverages. Nothing in the statutes (Florida Statute 627.748) addresses auto medical payments or physical damage coverage. Uninsured motorist coverage, however, states that coverage is “…as required by s. 627.727.” Since uninsured motorist coverage is not required in Florida, the TNC companies are permitted to reject the coverage on their commercial auto policy. Two of the major TNCs websites allow for the downloading of a certificate of insurance; both TNCs have rejected uninsured motorist coverage. When a TNC driver is logged into the TNC digital network but has not accepted a ride request yet, liability limits of 50/100/25 are required. That can come from the driver’s endorsed PAP, the TNC, or a combination of both. PIP must also be in force. Once the TNC driver has accepted a ride request, is enroute to the passenger, and has a passenger in the vehicle, $1 million of liability and PIP must be provided. Again, this can be provided by the driver’s endorsed PAP, the TNC, or a combination of both.

The PAP coverage is relatively simple: once the TNC driver has logged into the TNC digital network, all coverage under the PAP, except for PIP, is excluded. (Again, this contemplates ISO forms so read the policy in question.)

Coverage under the TNC policy will vary based on the specific TNC. Agents are cautioned that they should not discuss overage under the TNC policy since they did not sell that policy and likely have not read it. Refer the customer to the TNC for a discussion of coverage. One of the major TNCs has information on their website about insurance. Assuming their information is correct, when a driver is logged into the TNC network and has not accepted a rider request, the TNC provides only liability coverage at 50/100/25 limits. Remember, during this time period the PAP coverage (except for PIP) does not respond. This leaves the TNC driver with a serious gap in coverage. Once a TNC driver has accepted a ride request, the TNC policy provides $1 million of liability, $1 million of uninsured motorist, and “contingent physical damage” with a $1,000 deductible, meaning that if the driver's PAP has physical damage coverage the TNC will respond. If the driver’s PAP does not have physical damage coverage, then the TNC policy provides no coverage.

ISO has several endorsements relating to TNC coverage.

PP 23 16 10 13 – Personal Vehicle Sharing Program Exclusion Endorsement
This excludes all coverage (except for PIP) for a vehicle while being used in a personal vehicle sharing program.

PP 23 40 10 15 – Public or Livery Conveyance Exclusion Endorsement
This endorsement adds the use of a vehicle in a personal vehicle sharing program to the standard “public and livery” exclusion. It reinforces that there is no coverage under the PAP when a vehicle is being used in a personal vehicle sharing program. This would include any time a driver is logged into a TNC platform, whether or not a passenger is occupying the vehicle.

PP 23 41 10 15 – Transportation Network Driver Coverage (No Passenger)
Each vehicle to be covered by this endorsement must be listed. Once listed, coverage is provided for liability, medical payments, and uninsured motorist coverage but only when a driver is logged into a transportation network platform, and a passenger is not yet occupying the vehicle. The full limits of the PAP apply. Remember, during this period the statutes require liability limits of only 50/100/25.

PP 23 45 10 15 - PP 23 41 10 15 – Limited Transportation Network Driver Coverage (No Passenger)
This replaces the PP 23 40. Each vehicle to be covered by this endorsement must be listed. Once listed, coverage is provided for liability, medical payments, and uninsured motorist coverage but only when a driver is logged into a transportation network platform and the TNC driver has not accepted a request by a rider. The full limits of the PAP apply. This endorsement is more restrictive than the PP 23 41. Remember, during this period the statutes require liability limits of $1 million.

It’s important to note that with the ISO policy and endorsements there is still no coverage for the TNC driver once there is a passenger in the vehicle, thus the driver must rely on the policy of the TNC.

There are other issues here, also. For example, it’s is not unheard of that a TNC driver will drop off a passenger after a ride has been completed, but remain in the area telling the rider, “I’ll wait right here for you and when you come back out I’ll take you back to where I picked you up.” This ride may be “off the clock;” in other words the TNC driver did not accept the ride via the TNC digital network, enabling the driver to keep the full amount paid by the rider. This would be excluded under the PAP and there would likely be no coverage provided by the TNC policy. In other common situations, some drivers will pick up food at a local restaurant and deliver that to a home. Uber Eats is one such firm engaging in this practice. The PAP, even endorsed, would provide no coverage in situations such as this (except for PIP) and the driver would be relying on the firm they are driving for to obtain coverage.

Summary

The PAP has serious gaps in coverage for TNC drivers. It’s critical that agency staff stay in touch with customers and make recommendations to obtain proper coverage. Remember, too, refer the driver to the TNC for a discussion of how coverage is provided under that policy.

Make sure to contact your local Armstrong Insurance agent for a quote on auto, home or commercial insurance policies anywhere in Florida.