Topics:

Introduction

Changes in Covered Autos Liability Coverage 

Changes in Physical Damage Coverage

Changes in Auto Medical Payments

Changes in Uninsured and/or Underinsured Motorists Coverage

Changes in Personal Injury Protection Coverage

Additional Definitions

Introduction

 According to the filing explanation, these endorsements are being implemented in order to address new exposures related to the transportation network and on-demand delivery services. They are designed to provide underwriting flexibility, and may help reduce an insurer's potential exposure associated with risk misclassification, particularly if the ridesharing or on-demand delivery participation was not reported at the time of application for the policy.

 These endorsements modify insurance provided under the Auto Dealers Coverage Form, the Business Auto Coverage Form, or the Motor Carrier Coverage Form, and excludes from coverage under any of these three forms many practices of typical insureds who are working for or as a transportation network company. By accepting the endorsement, the insured is excluding coverage in order to obtain a smaller premium. These forms have been created by the Insurance Services Office in order to provide the insureds with a lower premium cost when certain risks are not being taken.

 Forms CA 23 44 and CA 23 45 are virtually identical, with CA 23 45 adding a provision to each section that specifies that the exclusion also applies to an insured who is logged into a delivery network platform as a driver to provide delivery services whether or not the goods or products are located in the covered vehicle.

 For reference in the remainder of this article, a transportation network company is a company that uses an online enabled platform (a transportation network platform) to connect passengers with drivers using their personal, non-commercial vehicles. Transportation network companies include Lyft, Uber, Via, Ola Cabs, and Wingz. As explained in more detail below, a transportation network platform is defined in these forms as “an online-enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensation”. A delivery network platform is a similar application that is used to coordinate deliveries. In the policies mentioned above, an auto can be defined as ”a land motor vehicle, trailer, or semitrailer designed for travel on public roads”, and any reference to the term insured means the named insured for any covered auto, and anyone else while using with named insureds permission a covered “auto” the named insured owns, hires, or borrows, exclusions apply.

 Changes in Covered Autos Liability Coverage CA 23 44

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A. Changes In Covered Autos Liability Coverage

The following exclusion is added:

Public or Livery Passenger Conveyance

This insurance does not apply to any covered “auto” while being used as a public or livery conveyance for passengers. This includes, but is not limited to, any period of time a covered “auto” is being used by an “insured” who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the covered “auto”.

 Analysis

 This exclusion precludes coverage whenever the insured is using the covered auto in order to transport people for money. Particularly whenever an insured is logged into their transportation network platform, no matter if there are passengers in the vehicle at the time. The reason for the strict exclusion of coverage for the insured while they are logged into the transportation network platform applications is because, if the insured is logged into the app, it can be assumed that they are either on their way to pick up a passenger, or have just dropped a passenger off and if it weren't for the ridesourcing application the loss would not have occurred. An example would be an employee is given exclusive use of a company car, and uses that vehicle as a ridesourcing vehicle on weekend nights and accrues a profit at the expense and liability of the company.

 Changes in Covered Autos Liability Coverage CA 23 45