HB266 By Representatives Faulkner, Johnson (K), McCampbell, Wingo, Hill (M), South, Daniels, Davis, Williams (JD), Martin and Collins RFD Transportation, Utilities and Infrastructure Rd 1 18-FEB-16

SYNOPSIS: Existing law does not provide insurance requirements for a transportation network company (TNC) that operates in the state. A TNC is a company that uses an online-enabled digital network to connect TNC riders with TNC drivers who use their personal vehicles to transport the TNC riders on a prearranged ride.

This bill would require certain TNC and TNC driver insurance requirements, including TNC and insurer disclosure requirements regarding insurance coverage and limits of liability.

A BILL TO BE ENTITLED AN ACT

Relating to transportation; to provide certain insurance requirements for a transportation network company that operates in the state; and to require certain disclosures regarding insurance coverage and limits of liability.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. For the purposes of this act, the following terms shall have the following meanings:

(1) DIGITAL NETWORK. Any online-enabled application, software, website, or system offered or utilized by a TNC that enables the prearrangement of a ride with a TNC driver.

(2) PERSONAL VEHICLE. A vehicle that meets all of the following criteria:

a. Is used by a TNC driver to provide a prearranged ride.

b. Is owned, leased, or otherwise authorized for use by a TNC driver.

c. Is not a taxicab, limousine, or other for-hire vehicle.

(3) PREARRANGED RIDE. The provision of transportation by a TNC driver to a TNC rider, beginning when a TNC driver accepts a ride requested by a TNC rider through a digital network controlled by a TNC, continuing while the TNC driver transports the requesting TNC rider, and ending when the last requesting TNC rider departs from the personal vehicle of the TNC driver. A prearranged ride does not include transportation provided by any of the following pursuant to the Alabama Motor Carrier Act, Chapter 3, Title 37, Code of Alabama 1975:

a. A shared expense carpool or vanpool arrangement.

b. The use of a taxicab, limousine, or other for-hire vehicle.

c. A regional transportation company or licensed motor carrier.

(4) TNC. A transportation network company that is a corporation, partnership, sole proprietorship, or other entity licensed and operating in this state that uses a digital network to connect a TNC rider to a TNC driver who provides a prearranged ride. A TNC may not control, direct, or manage the personal vehicle or the TNC driver who connects to its digital network, except where agreed to by written contract.

(5) TNC DRIVER. An individual who meets both of the following criteria:

a. Receives connections to potential riders and related services from a TNC in exchange for payment of a fee to the TNC.

b. Uses a personal vehicle to offer or provide a prearranged ride to a TNC rider upon connection through a digital network controlled by a TNC and in exchange for compensation or payment of a fee.

(6) TNC RIDER. An individual who uses the digital network of a TNC to connect with a TNC driver who provides a prearranged ride to the TNC rider in the personal vehicle of the TNC driver between points chosen by the TNC rider.

Section 2. (a) On or before 90 days after the effective date of this act, and thereafter, a TNC driver or a TNC on the behalf of the TNC driver shall maintain primary automobile insurance that recognizes that the driver is a TNC driver or otherwise uses a vehicle to transport riders for compensation and covers the driver under both of the following circumstances:

(1) While the TNC driver is logged onto the digital network of a TNC.

(2) While the TNC driver is engaged in a prearranged ride.

(b)(1) The following automobile insurance requirements shall apply while a participating TNC driver is logged on to the digital network of a TNC and is available to receive transportation requests but is not engaged in a prearranged ride:

a. Primary automobile liability insurance in the amount of at least fifty thousand dollars ($50,000) for death and bodily injury per person, one hundred thousand dollars ($100,000) for death and bodily injury per incident, and twenty-five thousand dollars ($25,000) for property damage.

b. All other state mandated coverage for motor vehicles, including the requirements under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(2) The coverage requirements of this subsection may be satisfied by any of the following:

a. Automobile insurance maintained by the TNC driver.

b. Automobile insurance maintained by the TNC.

c. Any combination of a. and b.

(c)(1) The following automobile insurance requirements shall apply while a TNC driver is engaged in a prearranged ride:

a. Primary automobile liability insurance that provides at least one million dollars ($1,000,000) for death, bodily injury, and property damage.

b. All other state mandated coverage for motor vehicles, including the requirements under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(2) The coverage requirements of this subsection may be satisfied by any of the following:

a. Automobile insurance maintained by the TNC driver.

b. Automobile insurance maintained by the TNC.

c. Any combination of a. and b.

(d) If insurance maintained by a TNC driver under subsection (b) or (c) has lapsed or does not provide the required coverage, insurance maintained by a TNC shall provide the coverage required by this act beginning with the first dollar of a claim and shall have the duty to defend the claim.

(e) Coverage under an automobile insurance policy maintained by a TNC may not be made dependent on a personal automobile insurer first denying a claim and a personal automobile insurance policy may not be required to first deny a claim.

(f) Insurance required by this act may be placed with an insurer licensed under state law or with a surplus lines insurer eligible under state law that has a credit rating of no less than A- from A.M. Best or A from Demotech or a similar rating from another rating agency recognized by the Department of Insurance.

(g) Insurance satisfying the requirements of this act shall satisfy the financial responsibility requirement for a motor vehicle under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(h)(1) A TNC driver shall carry proof of coverage satisfying this act with him or her at all times during his or her use of a vehicle in connection with the use of a digital network of a TNC.

(2) In the event of an accident, a TNC driver shall provide this insurance coverage information to the directly interested parties, automobile insurers, and investigating police officers, upon request pursuant to the Online Insurance Verification System administered by the Department of Revenue.

(3) Upon request, a TNC driver shall also disclose to directly interested parties, automobile insurers, and investigating police officers, whether he or she was logged on to the digital network of a TNC or on a prearranged ride at the time of an accident.

Section 3. The TNC shall disclose in writing to a TNC driver before the TNC driver is allowed to accept a request for a prearranged ride on the digital network of the TNC both of the following:

(1) The insurance coverage, including the types of coverage and the limits for each coverage, that the TNC provides while the TNC driver uses a personal vehicle in connection with the use of the digital network of a TNC.

(2) That the automobile insurance policy of the TNC driver may not provide any coverage while the TNC driver is logged on to the digital network of a TNC and is available to receive transportation requests or is engaged in a prearranged ride, depending on its terms.

Section 4. (a) Insurers that write automobile insurance in this state may exclude any and all coverage afforded under the policy issued to an owner or operator of a personal vehicle for any loss or injury that occurs while a TNC driver is logged on to the digital network of a TNC or while a TNC driver provides a prearranged ride.

(b) The right to exclude all coverage may apply to any coverage included in an automobile insurance policy, including, but not limited to, any of the following:

(1) Liability coverage for bodily injury and property damage.

(2) Personal injury protection coverage as defined by state law.

(3) Uninsured and underinsured motorist coverage.

(4) Medical payments coverage.

(5) Comprehensive physical damage coverage.

(6) Collision physical damage coverage.

(c) The exclusions under this section shall apply notwithstanding any requirements under the Motor Vehicle Safety-Responsibility Act, Chapter 7, Title 32, Code of Alabama 1975.

(d) Nothing in this section implies or requires that a personal automobile insurance policy provide coverage while the TNC driver is logged on to the digital network of a TNC, while the TNC driver is engaged in a prearranged ride, or while the TNC driver otherwise uses a vehicle to transport passengers for compensation.

(e) Nothing in this act shall require an insurer to use any particular policy language or reference to this section in order to exclude any and all coverage for any loss or injury that occurs while a driver is logged on to the digital network of a TNC or while a TNC driver provides a prearranged ride.

(f) Nothing shall preclude an insurer from providing primary or excessive coverage for the personal vehicle of a TNC driver, if it so chooses to do so by contract or by endorsement.

(g)(1) Automobile insurers that exclude the coverage described in this act shall have no duty to defend or indemnify any claim expressly excluded.

(2) Nothing in this act shall invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in this state prior to the enactment of this act that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public.

(h) An automobile insurer that defends or indemnifies a claim against a TNC driver that is excluded under the terms of its policy shall have a right of contribution against other insurers that provide automobile insurance to the same TNC driver in satisfaction of the coverage requirements of this act at the time of loss.

(i) In a claims coverage investigation, a TNC, upon the request of a directly involved party or any insurer of the TNC driver, if applicable, shall provide the precise times that a TNC driver logged on and off of the digital network of a TNC in the 12-hour period immediately preceding and in the 12-hour period immediately following the accident.

(j) Insurers potentially providing coverage as set forth in this act shall disclose upon request by any other insurer involved in the particular claim the applicable coverages, exclusions, and limits provided under any automobile insurance maintained in order to satisfy the requirements of this act.

Section 5. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Transportation

Transportation Network Company

Motor Vehicles

Liability Insurance

Revenue Department

Online Insurance Verification System