Summary: Transportation network companies are companies that provide a smart phone app allowing those willing to drive passengers to connect with those willing to pay for rides—this is called ride-sharing. Since its start, there have been many concerns from taxi companies and drivers about ride-sharing competing for business while not having to follow taxi regulations. Insurance departments have also been concerned about how drivers are being provided insurance when looking for or heading to pick up a rider. See Ride-sharing and Car-sharing.

ISO provides two forms that address the issue when the driver is logged into the application but has not yet picked up a passenger: Transportation Network Driver Coverage (No Passenger) – Arizona, PP 23 74 03 16, and Transportation Network Driver Coverage (No Passenger) – Kentucky, PP 23 92 02 16. Connecticut, Kansas, and Louisiana forms will be effective later in 2016, and they will be discussed then. With the popularity of ride-sharing, it is likely other states will adopt similar forms.

Topics covered: Introduction Transportation Network Driver Coverage (No Passenger) – Arizona Transportation Network Driver Coverage (No Passenger) – Kentucky

Introduction

Ride-sharing has three distinct periods: when the driver is logged into the application and looking for a passenger, when the driver is en route to pick up the passenger, and when the driver is taking the passenger to his desired destination. Many of the ride-sharing companies provide coverage during the second and third stages, when the driver is en route or is carrying a passenger. The problem has been when the driver is logged in and looking for a passenger. While transportation network companies (TNC) may provide coverage for the last two stages, coverage is often contingent during the first stage, and limits may be lower. The driver's insurance however excludes driving a vehicle for hire, so there is a gap in coverage. These endorsements are designed to cover such gaps. Many states are beginning to require TNCs or insurance companies to provide coverage during that difficult stage.

Transportation Network Driver Coverage (No Passenger) – Arizona PP 23 74

The form allows the insured to schedule a transportation network platform and vehicles the driver uses when driving for hire. As the TNCs have specific vehicle requirements as well as driver requirements, it makes sense to schedule the vehicles being used with the TNC application. Coverages available to be scheduled are liability, med pay, uninsured and underinsured motorists, and collision and other than collision.

I.Part A – Liability Coverage

Exclusion A.5. is replaced by the following:

We do not provide Liability Coverage for any “insured”:

5.For that “insured's” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This includes but is not limited to any period of time a vehicle is being used by any “insured” who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.

This exclusion (A.5.) does not apply to:

a.A share-the-expense car pool;

b.The ownership or operation of a vehicle while it is being used in the course of volunteer work for a tax-exempt organization as described in ARIZ. REV. STAT. ANN. Section 43-1201(4); or

c.The ownership or operation of a vehicle during any period of time such vehicle is being used by an “insured” who is logged into a “transportation network platform” described in the Schedule or in the Declarations as a driver and a passenger is not “occupying” the vehicle if:

(1)Such vehicle is described in the Schedule or in the Declarations; and

(2)A specific premium charge indicates that coverage under this Part is provided for such vehicle.

Analysis

The form replaces the transportation or livery exclusion with one that makes an exception for share-the-expense carpools, ownership or operation of a vehicle being used in the course of volunteer work for a tax exempt organization, or for the ownership or use of a vehicle being used while logged into a TNC as a driver, without a passenger. The vehicle must be listed in the schedule and have a premium charged. This is the period of time that raises the most issues, as the private passenger auto coverage normally excludes such actions.