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Pressure builds for Uber to provide bodily injury coverage

MI House passes 3 of 4 bills addressing issues ranging from ‘primary’ auto insurance for drivers, to coverage limits, to limits on passengers’ No Fault claims

Uber car

The pressure is building in Michigan for Uber and similar app-based, ride-sharing programs such as Lyft to provide auto insurance coverage for its drivers, passengers or others who could be injured in an automobile accident.

Yesterday, I wrote about a bill that would require Uber drivers and drivers of similar ride-sharing services like Lyft to insure themselves – rather than placing the burden with Uber and Uber-like companies, as well as why I thought the companies themselves would be the better solution to providing insurance that would protect the public.

Today, our auto attorneys would like to share a round-up summary of four more recently introduced bills in the Michigan House of Representatives – House Bills 4637, 4639, 4640 and 4032 – which address the issue of auto insurance coverage for Uber and Uber-type drivers, whom the bills refer to as “transportation network company driver[s].”

Significantly, three of the bills – HB 4637, 4639 and 4640 – were passed by the full House on June 17, 2015, and have been sent to the Senate for consideration.

Overall, the bills make it harder for Uber and similar ride-sharing businesses to shift the burden of providing auto insurance coverage to their drivers – and their drivers’ personal auto insurers.

Highlights of this recent round of “Uber” bills include:

  • Requiring “primary” auto insurance coverage for Uber and Uber-type drivers when they’re on duty and when transporting passengers.
  • Specifying the coverages required when a driver is on duty and when a driver is transporting passengers.
  • Allowing auto insurers to exclude coverage from personal auto insurance policies for accidents involving the insured’s use of his or her covered vehicle for Uber and Uber-type activities.
  • Limiting the circumstances under which a passenger can claim No Fault benefits through the “insurer” of an Uber or Uber-type motor vehicle.

House Bill 4637

House Bill 4637, which Rep. Tim Kelly (R-Saginaw Township) introduced on May 26, 2015, and which was passed by the full House of Representatives on June 17, 2015, provides:

  • A “primary automobile insurance” policy “shall” be “maintain[ed]” (by either the driver, the company or both) which “covers the [Uber or Uber-type] while he or she is logged on to the transportation network company’s digital network or while he or she is engaged in a prearranged ride.” (Pages 6-7 of the House’s version of HB 4637)
  • The coverage for when a driver is “logged on,” but not transporting passengers, includes: “Residual third party automobile liability insurance … in the amount of at least $50,000.00 per person for death or bodily injury, $100,000.00 per incident for death or bodily injury, and $25,000.00 for property damage”; No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI). (Page 6 of the House’s version of HB 4637)
  • The coverage for when a driver is transporting passengers, includes: “Residual third party automobile liability insurance with a minimum combined single limit of $1,000,000.00 for all bodily injury or property damage”; No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI). (Page 7 of the House’s version of HB 4637)

House Bill 4639

House Bill 4639, which Rep. Brandt Iden (R-Oshtemo) introduced on May 26, 2015, and which was passed by the full House of Representatives on June 17, 2015, provides:

  • An auto insurance company “that issues an insurance policy insuring a personal vehicle” that is used by an Uber or Uber-type driver “may exclude all coverage afforded under the policy for any loss or injury that occurs while” the driver (while driving the covered vehicle) “is logged on to a transportation network company’s digital network or while … [the] driver is providing a prearranged ride,” i.e., transporting passengers. (Pages 2-3 of the House’s version of HB 4639)
  • The auto insurance coverages that may be excluded include: residual liability; No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI); “uninsured and underinsured motorist coverage”; and, “comprehensive” and “collision” coverage. (Page 3 of the House’s version of HB 4639)

HB 4639 is “tie-barred” to HB 4637.

House Bill 4640

House Bill 4640, which Rep. Tom Barrett (R-Potterville) introduced on May 26, 2015, and which was passed by the full House of Representatives on June 17, 2015,  provides:

  • A “person” who suffers “accidental bodily injury while … [a] passenger” of an Uber or Uber-type “motor vehicle … shall” NOT “receive the [No Fault] personal protection insurance [PIP] benefits to which the person is entitled from the insurer of the [Uber or Uber-type] motor vehicle … unless the passenger is not entitled to personal protection insurance benefits under any other policy.” (Pages 2-3 of the House’s version of HB 4640)
  • This restriction on No Fault benefits for “a passenger” applies “while” the Uber or Uber-type driver (i.e., “transportation network company driver”) “is logged on to the transportation network company’s digital network or while the driver is engaged in a prearranged ride,” i.e., transporting passengers.

HB 4640 is “tie-barred” to HB 4032 (see below).

House Bill 4032

House Bill 4032, which Rep. Tim Kelly (R-Saginaw Township) introduced on January 15, 2015, provides:

  • Uber or an Uber-type company must “maintain[] a primary insurance policy covering each … driver for incidents involving the … driver at all times during a prearranged ride,” i.e., transporting passengers, and the coverage must include: “Residual third-party liability insurance … with a minimum combined single limit of $1,000,000.00 for all persons injured or property damage”; No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI). (Pages 3 and 4 of HB 4032)
  • Auto insurance coverage must meet Michigan’s minimum liability limits ($20,000/$40,000/$10,000) and provide No Fault/PIP and property protection insurance “during the time that [an Uber or Uber-type] driver is logged into the transportation network company’s digital network and available to receive requests for transportation but is not providing a prearranged ride,” i.e., transporting passengers. This coverage “may be satisfied by a combination of insurance policies maintained by a transportation network company or a transportation network company driver.” (Page 4 of HB 4032)

Unlike HB 4637, 4639 and 4640, no action has been taken on HB 4032.

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