Uber Auto Policy Meets State Requirements, Says Florida Regulator

January 26, 2015 by Michael Adams

Florida’s insurance regulators have determined that a ridesharing company’s automobile commercial liability policy meets state regulations, but legislative action is likely necessary to clarify whether that entitles the company to legally operate in the state.

Ridesharing firm Uber has been at odds with the Hillsborough County Public Transportation Commission since the it began operating in the Tampa Bay area in April 2014.

Uber, and its similarly operated competitor Lyft, allow smartphone users to digitally request rides from drivers who operate their own cars. Riders pay for the travel by credit car though the company’s app.

While Uber considers itself a ridesharing and technology company, it has run into conflict with established taxicab and limousine services in local communities.

The PTC, which oversees for-hire operators, has been in the frontline of that battle as it seeks to regulate Uber, which so far has resisted requirements such as having drivers undergo background checks and vehicles mechanically inspected.

PTC Executive Director Kyle Cockream said Uber should be regulated like any other for-hire ride service as a matter of public safety. And that it shouldn’t be able to shirk the rules others have to abide by saying they are a “ridesharing” company.

“Ridesharing is carpooling,” said Cockream. “They use a time distance algorithm to get passengers from point A to point B. That is transportation.”

Cockream said of the many issues raised by the emergence of the digital ride company’s is whether their commercial automobile insurance policy meets state standards and is adequate to meet the risk of providing its services to consumers.

To clarify that issue, the PTC requested that state insurance regulators look over Uber’s insurance policy and see if it meets state standards.

The Uber policy is written by James River Insurance, an excess and surplus lines insurer that is authorized to do business in Florida. According to the National Association of Insurance Commissioners, as of July 1, 2014, the insurer had a surplus of $166 million with direct written premiums of $118 million and an A.M Best Rating of A-.

The policy is provided on a “Business Auto” form that is standard for taxicabs and limousines, with policy limits of $1 million each for liability coverage, uninsured motorist coverage, and underinsured motorist coverage. By comparison, state law currently requires taxicabs and limousines to maintain a policy with coverage limits of $125,000 per person for bodily liability, $250,000 per incident and $50,000 for property damage.

Florida Office of Insurance Regulation (OIR) Deputy Chief of Staff Monte Stevens in a memo to the PTC, said the Uber policy is in excess of the state limits required by taxicabs and livery services and provides similar coverage.

“The policy appears to follow the typical business auto policies that are used by licensed and admitted carriers in Florida to provide coverage for commercial autos,” stated Stevens.

Stevens further noted that the coverage is primary over a personal automobile insurance coverage, making it first in line to cover any liabilities.

“The policy provides first-dollar coverage while the auto is being driven by the Uber driver and when the auto is providing livery services as recorded through the Uber application,” said Stevens.

Uber Spokesperson Taylor Bennett said the regulators ruling comes as no great surprise given the ridesharing company’s emphasis on drivers having proper insurance.

“The OIR has confirmed what we have said all along,” said Bennett. “It’s clear that we’ve demonstrated our insurance policy is best in its class and has set a new standard for quality and safety in the transportation industry.”

Even so, Stevens’ memo far from settles the issue.

Florida law contemplates that any such commercial automobile coverage would be issued by a licensed admitted insurer that is a member of the Florida Insurance Guaranty Association. The law, however, does not address a policy issued by a non-admitted excess surplus lines insurer such as James River, which is not a member of FIGA.

Stevens noted that issue could only be settled by the state Department of Highway and Safety Motor Vehicles.

“Whether or not the policy, which combined with a personal auto policy of the driver, would provide the coverage necessary under the Florida Financial Responsibility Law must be determined by the DHSMV,” noted Stevens.

The DHSMV, however, has let it be known that it would not weigh-in on that issue pending on any action by the state legislature, which is set to convene March 3.

Last year, lawmakers considered a bill that would have removed the ability of the state’s ten special transportation districts to discriminate or restrict the use of digital transportation services like Uber and Lyft.

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