Vote Recommendation | Economic Freedom | Property Rights | Personal Responsibility | Limited Government | Individual Liberty |
---|---|---|---|---|---|
No | Negative | Neutral | Negative | Negative | Neutral |
Relating to automobile
liability insurance for transportation network company drivers.
No significant fiscal implication to the State is anticipated.
HB 1733 would require transportation network companies (TNC)
to provide automobile insurance coverage for its drivers. This legislation
would establish the minimum coverage limits for a TNC driver who is in the
process of transporting a customer or is driving to pick up a customer.
If the insurance coverage is provided by the TNC, the TNC would
be responsible for covering any claim against its driver.
Since a TNC driver uses his or her own personal vehicle to
transport customers, a personal insurer for that driver would be allowed to
exclude any coverage for damages that occur while the TNC driver is logged on
to the TNCs digital network or is engaged in driving a customer. In other words, a personal automobile insurer
would not be required to provide coverage for a TNC driver.
Lastly this legislation would include additional protections
for a personal automobile insurer that would not require that insurer to investigate
a claim that is specifically excluded under its policy.
While we understand HB 1733 is aimed at businesses such as
Uber and Lyft, we cannot find a justification for this legislation. Currently, the
Motor Vehicle Safety Responsibility Act in Chapter 601 of the Transportation Code
specifically requires all drivers operating a vehicle in this state to maintain
some sort of coverage in the event of an accident.
If the Motor Vehicle Safety Responsibility Act already
establishes this requirement, it does not make sense for special legislation to
address this “issue” for a particular segment of the transportation
industry.
If a TNC chooses not to cover their drivers then that driver
must be responsible for ensuring they have personal automobile insurance that
will cover them. If the personal automobile insurer does not want to cover a
person while they drive for a TNC then it is the prerogative of that insurer to
make an exclusion for that. Ultimately, companies such as Uber and Lyft have an
incentive to keep drivers working for them. If these TNC companies see that
many of their drivers have personal auto policies that will not provide coverage
while driving for them, then it is their incentive to issue adequate automobile
coverage for its drivers.
Additionally, the author’s office says that this legislation would try to fix the coverage gap of when a TNC driver is not covered (under a TNC insurance policy) while driving around searching for a customer. For the most part, if coverage is offered by the TNC it is only in effect when the driver is transporting a customer in the car. These TNCs expect the driver’s personal insurance policy to cover him or her while searching for a customer to pick up. Once again, it behooves the TNCs to insure their drivers through this coverage gap period. Because failing to do so means that fewer and fewer drivers will risk this uncovered gap period while driving for them, which means they will not work for the TNC due to the risk. Once again, the free market resolves this issue without governmental interference.
Furthermore, insurance companies are free to come up with innovative new policies that cover these specific types of drivers as they become a growing share of the transportation for hire industry.
The explanations above shows how the free market would resolve
this conundrum without the “aid” of government regulation. For this reason, we
oppose HB 1733 because it violates our limited government principle, personal
responsibility principle, and free market principle.