California’;s Department of Insurance will hold a hearing Friday on smartphone-enabled ride companies, dubbed transportation ne2rk businesses, or TNCs. Solutions this kind of as Lyft, UberX and Sidecar offer you paid rides by drivers in their personal automobiles.
Right after a deadly accident involving an UberX driver, the Insurance Division issued a warning last month that the companies’; coverage may possibly be inadequate. Previously, the division had recommended the companies’; existing insurance coverage structure – $ one million in extra liability coverage – to the state Public Utilities Commission, which adopted the suggestion in its recommendations.
Insurance Commissioner Dave Jones spoke with The Chronicle in advance of the hearing. (The interview has been edited for length and clarity.)
Q: What are your considerations, and what authority do you have in this arena?
A: The troubles are acute, since you are talking about 2 tons of steel hurtling down the freeway. We don’;t have regulatory obligation more than the TNCs. Our position is buyer protection. The function of the hearing is to greater realize what the TNCs are performing, to assist us choose what, if anything at all, we must advise to the state PUC in addition to what they’;ve previously accomplished.
Q: Can insurance coverage be nimble in responding to a new sector?
A: When I was an assemblyman, I wrote legislation for a new organization model primarily based on technology to let individuals to physically share their autos within a social ne2rk. The dilemma was that personalized auto insurance coverage had an exclusion if you shared your car with other folks in a facilitated ne2rk (for) income. We came up with a bill to develop a wall amongst vehicle-sharing use and private use of a car. When the automobile was shared, a commercial liability policy was in effect at other instances personal automobile insurance coverage (was in area). I sat down with insurers, trade associations, entrepreneurs and customer groups to come up with a bill (AB1871), which the governor signed (in 2010). It really is instructive to appear at the bill it is surely 1 likely path.
Q: You place out a memo to TNC drivers warning about the “insurance coverage gap.” What is that?
A: The hovering time period from when the driver turns on the app till they (agree to) pick up a passenger is not covered (by the TNCs’; liability policies). Also, the million-dollar policies cover other men and women in an accident but not the TNC drivers. We see drivers as buyers who need safety also.
Q: Uber now provides coverage in the course of that hovering time period. Lyft has stated they will add coverage then. Are those ample responses?
A: Coverage is evolving. We want to get much more particulars on what they are carrying out than a press release might afford.
Q: The TNC companies’; $ 1 million liability is supposed to supplement the drivers’; individual policies, i.e., kick in after the personalized policies. Are there troubles with this approach?
A: Insurance organizations have advised us their policies don’;t cover circumstances the place someone is driving a person else close to employing one of these TNCs.
Q: So have insurance coverage organizations denied coverage for accidents by TNC drivers carrying paying out passengers? And have they canceled individual auto policies for any TNC drivers?
A: To what extent they are denying claims, or to what extent they know their policyholders who make a declare are carrying out this, is an intriguing question we’;ll check out in the hearing.
Carolyn Explained is a San Francisco Chronicle personnel writer. E-mail: email@example.com Twitter: @csaid