MEMORANDUM IN OPPOSITION

A. 8195B (Cahill)
AN ACT to amend the insurance law, the executive law and the general municipal law, in
relation to transportation network companies
The New York Insurance Association (NYIA), the state trade association that has
represented the property and casualty insurance industry in New York for more than 130
years, is strongly OPPOSED to the above-captioned bill. This bill would needlessly
increase mandatory minimum limits of liability and fails to preserve the legal distinction
between using a vehicle for personal uses and for ride sharing services, which will result in
greatly increased costs for all New York auto insurance consumers. While NYIA does not
oppose the concept of transportation network companies (TNCs), this legislation does not
properly integrate TNCs within the framework of the New York auto insurance laws.
First, this legislation does not contain the provisions set forth in the original version of this
bill that expressly preserved the ability of private passenger automobile insurance companies
to exclude coverage for claims arising out of ride sharing. Since ride sharing is inherently a
form of commercial auto use (driving a person for money), it is not covered by private
passenger auto insurance policies. Absent clear statutory language preserving this
exclusion, New York courts would be able to extend coverage by the private auto policies to
ride sharing claims. Unfortunately, the end result would be higher personal auto insurance
premiums for all New York drivers, even those who do not use their personal vehicles for
TNC activity. The original language in the first version of this measure allowed personal
auto insurers to exclude TNC policy coverage and provided that the personal auto insurer
had no duty to defend or indemnify any TNC claim. Failing to include all of these
provisions regarding the exclusion from coverage for TNC activity will lead to ambiguity,
coverage disputes, litigation and inevitably higher auto insurance costs in New York. In
addition, this bill's language stating that any TNC group policy "shall be primary with
respect to any other insurance available to a" TNC driver will provide an opening for the
courts to turn to the driver's personal auto insurance policy for coverage.
Second, the TNC mandatory minimum liability limits are too high. The original version of
this legislation contained sensible coverage limits of $50,000/$100,000 for period one when
the TNC app is on but there are no passengers and limits of $1 million when a passenger is
in the car, i.e., periods two and three. This legislation raises those limits to
$100,000/$300,000 for period one and $1.5 million for periods two and three. One point
that is very important to keep in mind when considering the limits is the mandatory no-fault
coverage applicable to all auto insurance policies, including TNC policies. No-fault

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provides up to $50,000 in benefits, primarily for medical costs but also for lost wages and
incidental expenses. Since no-fault automatically kicks in for virtually all automobile
accidents regardless of a driver's responsibility, there is $50,000 in benefits available even
before the mandatory minimum liability limits apply. Mandating these excessively high
levels of liability limits could lead to additional costs for TNC services and may even make
it too expensive in portions of New York.
A third major problem with the bill is its prohibition on any auto insurance policy covering
TNC activity except for a TNC group policy. The original version of the bill allowed for
much greater flexibility by allowing TNC's to be covered by a TNC group policy, the
driver's policy, or a combination of both types of policies. This flexibility is needed because
the TNC insurance market is new and allowing for multiple methods of providing coverage
will foster innovation and competition, thereby resulting in more options available for TNC
drivers. The original version's provision allowing multiple means of providing TNC
coverage also protected the TNC driver and public because any coverage used has to
comply with the requirements for the TNC policy. Other states who have adopted TNC
laws have seen personal auto insurers begin to enter the TNC market with endorsements to
personal policies covering a portion of the TNC activity, such as period one. A blanket
prohibition against using any policy other than the TNC group policy will needlessly
hamper innovation in New York, to the detriment of TNC drivers.
For the reasons stated above, NYIA strongly urges the Legislature to not enact this
measure.