ISO’s New Ride Sharing Endorsements

In a post about a month ago, I summarized the new law passed by the Georgia legislature earlier this year that, as of January 1, 2016, will require Uber, Lyft, and other Transportation Network Companies to maintain specified levels of insurance on their drivers from the time they are logged onto the company’s network and available to accept passengers until the driver is logged off that network.  The new law imposes the insurance requirement on the Transportation Network Companies, but permits those requirements to be satisfied by either the company through a commercial lines insurance policy or their drivers through an endorsement or rider to the drivers’ personal lines motor vehicle policy, or a combination of the two.

I mentioned in my earlier post that the Insurance Services Office would be issuing a new motor vehicle policy form that covers the services provided by drivers for Transportation Network Companies.  A series of forms were issued by ISO on May 1, 2015, to be effective on October 1, 2015, subject to their adoption by each state’s insurance regulatory body.  In a well written article in the May 1, 2015 issue of the newsletter from IIABA’s Virtual University, Bill Wilson explained in detail what the new forms do and more importantly, don’t do.

Four new endorsements were issued by ISO, three for its personal auto policy and one for its personal umbrella policy.  The one for the personal umbrella policy is merely a modification of the existing exclusion for the use of a personal motor vehicle for carrying paying passengers.  The new language refers specifically to any period of time that the insured is logged into a “transportation network platform”, as a driver, whether or not there is a passenger in the vehicle.  Thus, there is no coverage under the ISO personal umbrella policy for the use of a motor vehicle to carry paying passengers or even for the time when no passengers are in the vehicle, but the insured is available to carry such passengers.

One of the endorsements for the personal auto policy has the same exclusion language as for the personal umbrella policy.  It applies to Part B medical coverage and Part D damage to motor vehicle coverage, as well as Part A liability coverage.  The other two endorsements offer coverage for the insured while he or she is logged onto a “transportation network platform”, but does not have a passenger in their motor vehicle.  One endorsement provides coverage up to the time a passenger enters the vehicle, while the other stops coverage when the insured accepts a request to carry a passenger.

Given the narrowness of the ISO endorsements, my earlier prediction that “there will most probably be personal lines insurance companies that begin to offer the type of coverage required by” Georgia’s new law doesn’t appear to have been a good one.  Instead, it looks like those who want to carry passengers for a Transportation Network Company will have to rely on the company to provide the required insurance coverage or buy their own commercial lines coverage, if the company does not do so.