Transportation Network Driver Coverage (No Passenger)—Arizona and Kentucky
February 22, 2016
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
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.
II.Part B – Medical Payments Coverage Exclusion 2. is replaced by the following:
We do not provide Medical Payments Coverage for any “insured” for “bodily injury”:
2.Sustained while “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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 (2.) does not apply:
a.To 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.While “occupying” “your covered auto” 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.
III.Part C – Uninsured Motorists Coverage Exclusion A.2. is replaced by the following:
We do not provide Uninsured Motorists Coverage for “bodily injury” sustained by any “insured”:
2.While “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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.2.) does not apply:
a.To 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.While “occupying” “your covered auto” 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 medical payments and uninsured sections act the same way: coverage is excluded for vehicles used for livery use, but then the same exceptions as found in part I liability coverage. As long as the vehicle is scheduled and premium is paid for the coverage, coverage exists for a driver while logged into a TNC and looking for a passenger.
IV.Part D – Coverage For Damage To Your Auto
Exclusion 1. is replaced by the following:
We will not pay for:
1.Loss to “your covered auto” or any “nonowned auto” which occurs while it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” or any “nonowned auto” is being used by any person who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.
This exclusion (1.) does not apply:
a.To 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.While such vehicle is being used during any period of time a person 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.
V.Underinsured Motorists Coverage Endorsement
If the Underinsured Motorists Coverage endorsement is attached to the Policy, Exclusion A.1. is replaced by the following:
We do not provide Underinsured Motorists Coverage for “bodily injury” sustained by any “insured”:
1.While “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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.1.) does not apply:
a.To 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.While “occupying” “your covered auto” 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 Underinsured Motorists Coverage is provided for such vehicle.
VI.Termination Of Transportation Network Driver Coverage (No Passenger)
We may terminate coverage under this endorsement by mailing notice to the named insured shown in the Declarations at the address shown in this Policy. Notice will be mailed by United States mail at least 45 days before the effective date of the termination.
Analysis
The coverage for damage to your auto and underinsured sections follow the same format. The exclusions apply except for share-the-expense carpool, use for volunteer work for a tax exempt organization, or when the insured is in a vehicle scheduled on the policy and logged into the TNC application looking for a passenger. Premium must be paid for the coverage.
The termination notice is straightforward and self-explanatory. Coverage may be terminated with forty-five days notice from the carrier.
Transportation Network Driver Coverage (No Passenger) – Kentucky PP 23 92
This form is similar to the Arizona form, and allows an insured to schedule a TNC and the vehicles used when actively using the vehicles for ride-sharing. Coverages available to be scheduled are liability, med pay, uninsured and underinsured motorists, PIP, and collision and other than collision.
I.Definitions
The following definition is added:
“Transportation network platform” means 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.
II.Part A – Liability Coverage
Exclusion A.4. is replaced by the following:
To the extent that the limits of liability for this coverage exceed the minimum limits of liability required by the Kentucky Motor Vehicle Reparations Act, we do not provide Liability Coverage for any “insured”:
4.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.4.) does not apply to:
a.A share-the-expense car pool; or
b.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 first defines exactly what a “transportation network platform” is: an online application used to connect passengers with drivers willing to take them to a given location for a fee. It is similar to a taxi service except the drivers are not professional drivers; they are often doing this part time as a way to make money on the side.
The liability coverage is very similar to the Arizona form, except that it applies to liability that exceeds the minimum limits of coverage. The exclusion for public or livery conveyance applies except for what is scheduled in this form and share-the-expense carpools.
III.Part B – Medical Payments Coverage Exclusion 2. is replaced by the following:
We do not provide Medical Payments Coverage for any “insured” for “bodily injury”:
2.Sustained while “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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 (2.) does not apply:
a.To a share-the-expense car pool; or
b.While “occupying” “your covered auto” 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.
IV.Part C – Uninsured Motorists Coverage Exclusion A.2. is replaced by the following:
We do not provide Uninsured Motorists Coverage for “bodily injury” sustained by any “insured”:
2.While “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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.2.) does not apply:
a.To a share-the-expense car pool; or
b.While “occupying” “your covered auto” 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
Medical payments and uninsured motorists coverage follows a similar format but says nothing about exceeding the minimum limits. Coverage is provided for medical payments and uninsured motorists coverage when the insured is using the vehicle while logged into a TNC but does not have a passenger as long as both the TNC and the vehicle in use are scheduled on this endorsement. Coverage is also provided for share-the-expense car pools.
V.Part D – Coverage For Damage To Your Auto Exclusion 1. is replaced by the following:
We will not pay for:
1.Loss to “your covered auto” or any “nonowned auto” which occurs while it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” or any “nonowned auto” is being used by any person who is logged into a “transportation network platform” as a driver, whether or not a passenger is “occupying” the vehicle.
This exclusion (1.) does not apply:
a.To a share-the-expense car pool; or
b.While such vehicle is being used during any period of time a person 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
As with the other coverages, while coverage generally does not apply when the vehicle is used for public or livery service, an exception is made for vehicles scheduled on this form when a TNC is scheduled as well. Remember, the insured must have no passenger; this is for that period of time when the insured is logged into the application but is looking for a passenger. Share-the-expense carpools are also covered for damage to the vehicle.
VI.Underinsured Motorists Coverage Endorsement
If the Underinsured Motorists Coverage Endorsement is attached to the Policy, exclusion A.1. is replaced by the following:
We do not provide Underinsured Motorists Coverage for “bodily injury” sustained by any “insured”:
1.While “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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.1.) does not apply:
a.To a share-the-expense car pool; or
b.While “occupying” “your covered auto” 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 Underinsured Motorists Coverage is provided for such vehicle.
VII. Personal Injury Protection Coverage Endorsement
Exclusion D.1. is replaced by the following:
We do not provide personal injury protection benefits for “bodily injury” sustained by any “insured”:
1.While “occupying” “your covered auto” when it is being used as a public or livery conveyance. This includes but is not limited to any period of time “your covered auto” 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 (D.1.) does not apply:
a.To a share-the-expense car pool; or
b.While “occupying” “your covered auto” 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 Personal Injury Protection Coverage is provided for such vehicle.
Analysis
The coverage for underinsured motorists is the same as the other coverages. The TNC and vehicles used should be scheduled on this form. Coverage also applies to PIP coverage if it is shown on the schedule with a premium. The standard applies: the driver must be logged in and looking for a passenger.