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Uber, Lyft laws are passed in Michigan, creating needed protection for passengers

We now have more clarity on insurance and safety protections for Uber, Lyft passengers and injured car accident victims

uber-driver-checking-phone

Recently, I wrote about the Michigan Legislature’s approval of bills to overhaul the requirements of our No Fault car insurance law as they pertain to app-based, ride-sharing services like Uber and Lyft.

On December 21, 2016, Gov. Rick Snyder signed those bills into law. We now have more clarity about an otherwise murky area of our auto laws regarding protections to the passengers of “transportation network company” vehicles and to the car accident victims injured when accidents inevitably do occur involving those vehicles.

Here are the highlights of what these new laws – House Bills 4637, 4639 and 4640 (Public Acts 345-347 of 2016) will address:

  • No Fault and liability insurance coverage that a “transportation network company driver” must have in effect while on-duty: The driver must have a minimum of $1 million in “[r]esidual third party automobile liability insurance” for bodily injury and property damage for when he is transporting passengers. When the driver is just on-duty, i.e., “logged on” to the “transportation network company’s digital network,” then the required minimum is $50,000/$100,000 for personal injury liability and $25,000 for property damage liability. In both scenarios, the driver must also be covered for No Fault PIP and proportion protection insurance (PPI).
  • Coverage exclusions in personal car insurance policies for Uber-type use of vehicle: Insurance companies can write their personal auto policies in such a way that if their insured uses his or her personal vehicle to drive for Uber, Lyft or another “transportation network company” and is injured in a car accident while doing so, then all coverage that would have otherwise been provided under the policy is excluded, i.e., unavailable.
  • Insurer of the personal vehicle being used by a “transportation network company driver” providing No Fault benefits to a passenger injured in an automobile accident: The passenger of a “transportation network company driver” who is injured in a motor vehicle while a passenger in the driver’s car collects No Fault benefits (such as medical-expense reimbursement and wage loss benefits) from the driver’s auto insurer only if the passenger has no other source of No Fault benefits, e.g., she doesn’t have her own policy, nor does her spouse or a resident relative.
  • Safety precautions that “transportation network companies” will be required to do to protect passengers: Going forward, companies like Uber and Lyft will be required to investigate their drivers’ driving history and their drivers’ criminal history. Companies will also be forbidden from hiring drivers with multiple moving violations, a major driving violation, a felony conviction for certain offenses and if drivers are listed on the “national sex offender registry database.” Additionally, before a ride begins, riders will be provided with a photo of who their driver will be and what his or her license plate number is.

What’s in enrolled House Bill 4637

Here’s what enrolled House Bill 4637, which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 345 of 2016, says about the car insurance requirements for an Uber or Uber-type driver – i.e., a driver for a “transportation network company”:

  • A “primary automobile insurance” policy “shall” be “maintain[ed]” (by either the driver, the company or both) that recognizes that the transportation network company driver uses the vehicle as a transportation network company driver or otherwise uses a vehicle to transport passengers for compensation and covers the [Uber or Uber-type] driver 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.” (Page 7 (Sec. 23(1) and (4)) of the House-enrolled version of HB 4637.
  • The coverage for when a driver is “logged on to the transportation network company’s digital network,” 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 7 (Sec. 23(2)) of the House-enrolled version of HB 4637)
  • The coverage for when a driver is transporting passengers, i.e., when “a transportation network company driver is engaged in a transportation network company prearranged ride,” 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 (Sec. 23(3)) of the House-enrolled version of HB 4637)

What’s in enrolled House Bill 4639?

Here’s what enrolled House Bill 4639, which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 346 of 2016, says about the types of exclusions that car insurance companies can insert in their personal auto policies for when the insured wants to use the covered vehicle in his capacity as a “transportation network company driver”:

  • 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 a transportation network company driver [while driving the covered vehicle] is logged on to a transportation network company’s digital network or while [he or she] is providing a prearranged ride,” i.e., transporting passengers. (Page 2 (Sec. 3017(1)) of the House-enrolled 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 2 (Sec. 3017(1)(a-e)) of the House-enrolled version of HB 4639)

What’s in enrolled House Bill 4640?

Here’s what enrolled House Bill 4640, which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 347 of 2016, says about the source of No Fault benefits for Uber or Uber-type passengers, i.e., passengers of transportation network company drivers:

  • A “person” who suffers “accidental bodily injury while … [a] passenger” of an Uber or Uber-type “motor vehicle” (i.e., “a transportation network company vehicle”) “shall” NOT “receive the [No Fault] personal protection insurance [PIP] benefits to which the person is entitled from the insurer of the motor vehicle … unless the passenger is not entitled to personal protection insurance benefits under any other policy …” (Page 2 of the House-concurred version of HB 4640) (Page 2 (Sec. 3114(2)(g)) of the House-enrolled version of HB 4640)

What’s being done to protect the passengers’ safety?

It’s imperative that passengers are safe when they hail a ride sharing service like Uber or Lyft, especially given the recent alleged passenger being stabbed by an Uber driver in Bloomfield Township and the tragic shooting rampage by an Uber driver in Kalamazoo Michigan.

Here’s what enrolled House Bill 4637 (which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 345 of 2016) provides in the way of ensuring the safety of passengers in Uber, Uber-type or so-called “transportation network company” vehicles:

  • Drivers must disclose their “driving history” to the transportation network company for which they seek to drive. (Page 4 (Sec. 7(1)) of the House-enrolled version of HB 4637)
  • Uber and Uber-type companies, i.e., transportation network companies, must “annually conduct, a local and national criminal background check” of drivers, which includes a search of “criminal records” and the “national sex offender registry database,” and “[a]nnually obtain and review a driving history research report” for each driver. (Page 4 (Sec. 7(1)) of the House-enrolled version of HB 4637)
  • Persons are forbidden from being drivers for Uber or Uber-type services if any of the following apply: (1) “The individual has had more than 4 moving violations or 1 major violation [“includes, but is not limited to, attempting to evade the police, reckless driving, or driving on a suspended or revoked license”] in the 3-year period before the date of the application”; (2) “The individual has a felony conviction within 5 years before the date of the application of any of the following: (i) Driving under the influence of drugs or alcohol. (ii) Fraud. (iii) A sexual offense. (iv) Use of a motor vehicle to commit a felony. (v) A crime involving property damage. (vi) Theft. (vii) An act of violence. (viii) An act of terror”; (3) “The individual is listed on the national sex offender registry database.” (Pages 4-5 (Sec. 7(2)) of the House-enrolled version of HB 4637)
  • Drivers must display on their vehicles “a consistent and distinctive signage or emblem” identifying the “transportation network company with which the vehicle is affiliated.” (Pages 5-6 (Sec. 11) of the House-enrolled version of HB 4637)
  • “A transportation network company digital network shall display a picture of the transportation network company driver and the registration plate number of the personal vehicle to be used for the transportation network company prearranged ride before the transportation network company rider enters the personal vehicle.” (Pages 9 (Sec. 33) of the House-enrolled version of HB 4637)
This entry was tagged Tags: Lyft, Uber, Uber liability
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