Georgia Legislature Creates Need for New Personal Lines Coverage

The 2015 session of the Georgia General Assembly tackled several insurance related issues.  For a complete rundown on what the General Assembly did and did not do this year, click here for the Capitol Report from Gould Hagler, the lobbyist for IIAG.  The General Assembly’s handling of perhaps the most high-profile insurance issue resulted in creating a need for a specific type of new personal lines coverage.  Beginning January 1, 2016, anyone who carries passengers for what the General Assembly has chosen to call a “Transportation Network Company” (think Uber or Lyft) must either have specified insurance coverage through such a company or as part of their personal motor vehicle policy.

House Bill 190 requires that either the Transportation Network Company or each of its drivers must have minimum coverages of $100,000 for bodily injuries or death in one accident with a maximum of $50,000 per person and $50,000 for property loss or damage in one accident for the time period during which the driver is logged onto the company’s network and available to accept passengers until the driver is logged off, except for the period of time beginning when the driver accepts a ride request on the network and ending when the ride is complete, or “the driver completes the transaction”, whichever is later.  During this latter time period, there must be minimum insurance coverage of $1 million for death, personal injury, and property damage per accident and $1 million for uninsured and underinsured motorist coverage per accident.

The new law allows for the above minimum coverage requirements to be provided by both the driver and the Transportation Network Company, if the driver obtains a motor vehicle insurance policy or an endorsement to their existing motor vehicle policy that specifically covers the above services and periods of time and the Company obtains an excess coverage policy, which together satisfy those requirements.  The new law specifically states that an insurance company authorized to transact business in Georgia will not be required to provide either a policy or an endorsement to existing policies that satisfies those requirements and such a company can exclude coverage for the activities described above from any motor vehicle insurance policies it may issue.  Not surprisingly, if a company chooses to provide the statutorily required coverage in either a new insurance policy or an endorsement to an existing policy, the new law authorizes the company to charge an additional premium for such coverage.

It remains to be seen whether the Transportation Network Companies will choose to obtain the required insurance coverage themselves or require their drivers to obtain some or all of those coverages. Most likely, some will obtain such coverage and some won’t.  However, given the rapid growth of the type of services offered by companies like Uber and Lyft and the controversy that has been created by them, there will most probably be personal lines insurance companies that begin to offer the type of coverage required by HB 190.  In fact, the Insurance Services Office is set to file a new motor vehicle policy form that covers these type of services.  For more on this new filing, be on the look out for the May 1, 2015 issue of the newsletter from IIABA’s Virtual University, which will contain an article on it. (Click here to sign up for the newsletter if you aren’t already on the list. You don’t have to be a IIABA member to subscribe to this newsletter.)

Agents should not wait to begin contacting their personal lines customers about HB 190.  Most commentators agree that existing personal motor vehicle policies do not provide coverage for ride sharing services like Uber and Lyft, so the liability exposure already exists.  Informing your customers of this exposure is another way to provide value added services to them and in the process offer a way to mitigate that exposure, now that you know how much coverage they will need.