ISO Responds to Uber, Lyft and Other TNCs

ISO Responds to Uber, Lyft, and Other TNCs (Transporta- tion Network Companies)

ISO has responded to the Uber, Lyft and the TNC craze that’s disrupting the taxi industry by filing new endorsements. It’s a response that will leave ISO-based insurers out of the game.

The most important change is a mandatory endorsement that eliminates coverage while the insured is logged on to a TNC (PP 23 40 10 15 – Public Or Livery Conveyance Exclusion Endorsement). ISO intends that this endorsement makes clear there is no coverage while the insured’s vehicle is logged on to a transportation network platform. (“Transportation net- work platform” means an online-enabled application or digital network used to con- nect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensa- tion.”). ISO’s filing points out that this is a “reinforced (emphasis added) public or liv- ery conveyance exclusion.” 2 It adds the underlined words below to the public or livery conveyance exclusion:

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

…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 peri – od of time that “insured” is logged into a “transportation network  plat – form” (TNP) as a driver, whether or not a passenger is “occupying” the vehicle.

Remember that for personal auto lia- bility “insured” is broadly defined to include the named insured and any family member, anyone using the covered auto, and any person or organization responsible for their use of the covered auto.

The “public or livery conveyance” exclusions applying to Damage to Your Auto coverage and Medical Payments cov- erage are similarly changed. Once the insured logs on to a TNC there’s no colli- sion or other physical damage coverage until the driver logs off.  ISO will make changes to under and uninsured motorist coverage on a state-by-state basis.

ISO is also filing two optional endorse- ments to provide some coverage, but in nei- ther case does coverage apply while there is a fare-paying passenger in the vehicle.

PP 23 41 10 15 – Transportation Network Driver Coverage (No Passenger) is an optional endorsement to provide cov- erage for the period of time from when the driver logs in to a “transportation network platform” up until a passenger has entered the vehicle.

PP 23 45 10 15 – Limited Transporta- tion Network Driver Coverage (No Pas- senger) is another optional endorsement. It provides coverage from the time the in- sured logs on to the network until the driver accepts an assignment. PP 23 41 provides coverage until the passenger en- ters the vehicle.

The insured’s personal policy would respond when he or she is not logged on to a TNC. Otherwise the insured has to rely on the coverage provided by the TNC’s insurer. (Some more coverage can be pro- vided by the two optional endorsements, but they come nowhere near closing the gap. I predict that few insurers will offer the optional extensions and few insureds will want them.)

My preference is always for one policy that provides continuous coverage. Erie and GEICO are testing the waters with continuous coverage. I hope other insurers will join the fray.