HB 4032 sets liability, No Fault & PPI requirements for app-based ride-sharing services like Uber
Uber is the leading app-based ride-sharing service. Recently, more focus has been directed at the questionable auto insurance coverage and liability insurance protection that Uber provides for drivers and passengers.
The issues become even more complicated in a No Fault state, like Michigan, and I’ve addressed these issues in previous blogs about Uber. One of my big concerns is whether “commercial use” exclusions in Uber drivers’ personal auto insurance policies will deny insurance coverage to drivers, passengers, other drivers and pedestrians in the event of any car accident caused by an Uber driver.
This concern may now be solved, thanks to Rep. Tim Kelly (R-94th Saginaw County). Kelly recently introduced House Bill 4032 (the “Uber bill”), which proposes auto insurance requirements for app-based ride-sharing services, including Uber.
Today, I’ll discuss the details of HB 4032’s auto insurance proposals. And tomorrow, I’ll discuss whether HB 4032’s proposals overcome potential concerns about the “commercial use” exclusion problems I see as an attorney in almost all of the auto insurance policies these days. And Thursday, I’ll review some potential insurance traps for Uber drivers and passengers under this bill.
To learn more about the auto insurance coverage Uber is currently providing, take a look at my previous blog posts:
- “How much insurance does Uber offer when transporting a rider?”
- “Will Uber’s ‘insurance gap’ coverage stop car accident victims from falling through the cracks?”
What is House Bill 4032 – the “Uber bill”
Under HB 4032, when a driver for an app-based ride-sharing service (called a “transportation network company” in the bill) is transporting a passenger or rider, the following auto insurance requirements apply:
- The service or “company” must “maintain” an “insurance policy covering each … driver …”
- The policy must be provided by the company.
- The policy must be “primary,” meaning that, in the event of a crash, the policy is the “primary” source of coverage, not the driver’s personal auto insurance policy.
- The policy must provide $1 million in liability coverage for bodily injury and property damage.
- The policy must provide for No Fault PIP and “property protection insurance” coverage.
However, when a driver for an app-based ride-sharing service is on-duty, but is not presently transporting passengers or riders, the following insurance coverage must be in place:
- “[A]t least” the minimum liability limits for bodily injury and property damage ($20,000/$40,000/$10,000).
- No Fault PIP and “property protection insurance” coverage.
This is the bare minimum bodily injury liability insurance required under Michigan’s No Fault Law (it’s what some people would call “PLPD” or “Personal Liability Property Damage” coverage).
You need a lawyer for the loopholes
Reading through the bill, I found that HB 4032 does not identify who’s responsible for providing the specified coverage when the Uber driver is on-duty, but not presently transporting passengers or riders: Is it the app-based ride-sharing company or is it the driver?
That’s a rather large loophole that you can drive a Uber car through.
Instead, the bill makes the following equivocal, indefinite statement:
“The requirement of this subdivision may be satisfied by a combination of insurance policies maintained by a transportation network company or a transportation network company driver.”
HB 4032 was introduced on January 15, 2015. On January 20, 2015, it was referred to the House Communications and Technology Committee.