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American Insurance Association Applauds Committee Passage of California Ride-Sharing Legislation

WASHINGTON, D.C., June 18, 2014 - Steven Suchil, Western region assistant vice president for the American Insurance Association (AIA), issued the following statement today after the passage of legislation that will fix gaps in insurance coverage of Transportation Network Companies (TNCs) by the California Senate Energy, Utilities and Communications Committee.  The bill, AB 2293, is authored by Assemblywoman Susan Bonilla and passed the Assembly by a vote of 71-0 last month.   

Mr. Suchil`s statement follows:

"AIA believes that consumer safety and the protection against unforeseen loss are the primary insurance concerns in addressing the use of TNCs.  The use of a driver`s personal automobile insurance policy puts that driver, their riders and the public at risk because it does not cover commercial activities such as operating a personal automobile for compensation.   AB 2293 seeks to fix gaps in TNC insurance coverage while establishing that TNC insurance is, of course, the primary coverage for its business activities.

"We applaud the Committee for its passage of AB 2293 and Assemblywoman Bonilla for her leadership on this issue.  AB 2293 is essential to fixing TNC`s insurance gaps and ensures that the proper coverage is in place in the event of an accident.  We urge the Senate to pass this legislation."

AB 2293 will do four things:

1) Require TNCs to disclose to drivers upfront that their personal insurance may not apply when engaging in commercial TNC activities. 

2)  Define in statute that TNC activities begins once the "app" is turned on and the TNC services end when the "app" is turned off. 

3) AB 2293 clarifies that TNC insurance is primary coverage.

4) Require TNC`s liability insurance to defend and indemnify their drivers when they have a claim or accident while in TNC service.
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Source: American Insurance Association via GlobeNewswire