“Failure is not fatal, but failure to change might be”. – John Wooden
The IL legislature passed legislation that provides regulation for transportation networking companies (TNCs) – which should eliminate many insurance gaps, according to the Property Casualty Insurers Association of America. The measure will require background checks on drivers, vehicle inspections and chauffeur licenses for drivers who work more than 36 hours in any two-week period. It also requires clear disclosure to TNC drivers about insurance coverages.
The key component of the legislature is that the commercial liability insurance policy will be the primary policy from the time the driver’s app is on or he/she is available to accept a passenger. The bill has been sent to the governor for approval.
The goal of the legislation is two-fold:
1. Increase clarity on which policy is primary (personal auto vs. commercial).
2. Avoid increases in personal insurance rates
While increased legislation usually creates more problems than it solves, the goal of this legislation is noble. Ideally, an insurance company would step up and provide a unique and differentiated product customized for this exposure; however, it doesn’t appear as though there is any interest from any company. As the quote from John Wooden at the beginning of this post emphasizes, failure to change may be fatal. I’m hopeful that insurance companies become more flexible with their products and policies offered in this ever-changing world. It’d be a shame to let the barbaric coverage forms provided by insurance companies hinder the entrepreneurial spirit of this country.