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Texas House Passes Insurance Requirements for Transportation Network Companies
Thursday, May 14, 2015 6:55 AM

HB 1733 by Rep. John Smithee (R-Amarillo) addresses the need for insurance coverage and regulations for the online transportation network companies (TNC) such as Uber or Lyft.  This bill mandates certain insurance coverage for people who use their personal vehicles for commercial transport. These requirements must be met either by the person driving the vehicle, the TNC, or a combination of both.

Insurance for TNC drivers must allow for the TNC driver to use a personal vehicle to transport riders for compensation. The policy for the driver must cover the period of time the driver is logged into the TNC network and when the driver is engaged in a prearranged ride, which is from the time the rider accepts the ride through the end of the ride. Any driving that occurs outside these conditions must be covered by the driver’s own personal insurance or other commercial insurance.

If a TNC driver’s insurance lapses, the TNC must provide coverage. The TNC is required to provide drivers with disclosures with the details of when the TNC’s blanket policy applies before that driver accepts a request for a ride. These disclosures must tell when a policy applies and when it does not.

The bill allows insurers to exclude coverage for TNC related activities from a personal automobile insurance policy, does not require that insurers include coverage for TNC activities in any personal automobile insurance policies, and removes any duty that the insurer would have to defend or indemnify a claim under a personal policy while the driver is engaged in TNC activities. 

In order to better make a determination of claims, TNCs must assist insurers in providing the precise time that TNC drivers are logged in and a clear description of the details of any blanket insurance policy on its drivers.

The Texas Credit Union Association has been working on the bill supporting amendments that includes beneficial requirements for lienholders on vehicles used in TNC activities. TNC policies must include coverage for incidents caused by uninsured or underinsured motorists and a requirement that any insurance claims made under an insurance policy that covers TNC activities is paid to the person that repairs the car, or jointly to the car owner and lienholder.

The bill passed by a vote of 136 to 7.

Contact Jeff Huffman, president, Texas Credit Union Association, at 469-385-6488 or jhuffman@txcua.coop for more information.