By: Smithee (Senate Sponsor - Watson) H.B. No. 1733
(In the Senate - Received from the House May 14, 2015;
May 14, 2015, read first time and referred to Committee on Business
and Commerce; May 22, 2015, reported favorably by the following
vote: Yeas 7, Nays 0; May 22, 2015, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to automobile liability insurance for transportation
network company drivers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 10, Insurance Code, is amended
by adding Chapter 1954 to read as follows:
CHAPTER 1954. INSURANCE FOR TRANSPORTATION NETWORK COMPANY DRIVERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1954.001. DEFINITIONS. In this chapter:
(1) "Digital network" means any online-enabled
application, software, website, or system offered or used by a
transportation network company that enables a prearranged ride with
a transportation network company driver.
(2) "Personal vehicle" means a vehicle that is used by
a transportation network company driver and is:
(A) owned, leased, or otherwise authorized for
use by the driver; and
(B) not a taxicab, limousine, or similar for-hire
vehicle.
(3) "Prearranged ride" means transportation provided
by a transportation network company driver to a transportation
network company rider, beginning at the time a driver accepts a ride
requested by a rider through a digital network controlled by a
transportation network company and ending at the time the last
requesting rider departs from the driver's personal vehicle. The
term does not include:
(A) a shared expense carpool or vanpool
arrangement or service; or
(B) transportation provided using a taxicab,
limousine, or similar for-hire vehicle.
(4) "Transportation network company" means a
corporation, partnership, sole proprietorship, or other entity
operating in this state that uses a digital network to connect a
transportation network company rider to a transportation network
company driver for a prearranged ride. The term does not include an
entity arranging nonemergency medical transportation under a
contract with the state or a managed care organization for
individuals qualifying for Medicaid or Medicare.
(5) "Transportation network company driver" means an
individual who:
(A) receives connections to potential
transportation network company riders and related services from a
transportation network company in exchange for payment of a fee to
the company; and
(B) uses a personal vehicle to offer or provide a
prearranged ride to a transportation network company rider on
connection with the rider through a digital network controlled by
the company in exchange for compensation or payment of a fee.
(6) "Transportation network company rider" means an
individual who uses a transportation network company's digital
network to connect with a transportation network company driver who
provides a prearranged ride to the individual in the driver's
personal vehicle between points chosen by the individual.
Sec. 1954.002. APPLICABILITY OF CHAPTER. This chapter
applies to automobile insurance policies in this state, including
policies issued by a Lloyd's plan, a reciprocal or interinsurance
exchange, and a county mutual insurance company.
SUBCHAPTER B. INSURANCE REQUIREMENTS
Sec. 1954.051. GENERAL INSURANCE REQUIREMENT. (a) A
transportation network company driver or transportation network
company on the driver's behalf shall maintain primary automobile
insurance as required by this subchapter.
(b) Insurance maintained under this subchapter must allow a
transportation network company driver to use a personal vehicle to
transport transportation network company riders for compensation
and cover the driver while:
(1) the driver is logged on to the transportation
network company's digital network as provided by Section 1954.052;
or
(2) the driver is engaged in a prearranged ride as
provided by Section 1954.053.
(c) Insurance maintained under this subchapter must comply
with the law applicable to personal automobile insurance in this
state, including this subtitle and Chapter 601, Transportation
Code.
(d) The coverage requirements of this subchapter may be
satisfied by:
(1) automobile insurance maintained by the
transportation network company driver;
(2) automobile insurance maintained by the
transportation network company; or
(3) a combination of Subdivisions (1) and (2).
(e) Insurance required under this subchapter may be placed
with an automobile insurer authorized to engage in business in this
state or with an eligible surplus lines insurer.
Sec. 1954.052. INSURANCE REQUIREMENTS: BETWEEN PREARRANGED
RIDES. At the time a transportation network company driver is
logged on to the transportation network company's digital network
and is available to receive transportation network requests but is
not engaged in a prearranged ride, the automobile insurance policy
must provide:
(1) the following minimum amounts of liability
insurance coverage:
(A) $50,000 for bodily injury to or death for
each person in an incident;
(B) $100,000 for bodily injury to or death of a
person per incident; and
(C) $25,000 for damage to or destruction of
property of others in an incident;
(2) uninsured or underinsured motorist coverage where
required by Section 1952.101; and
(3) personal injury protection coverage where
required by Section 1952.152.
Sec. 1954.053. INSURANCE REQUIREMENTS: DURING PREARRANGED
RIDES. At the time a transportation network company driver is
engaged in a prearranged ride, the automobile insurance policy must
provide, at a minimum:
(1) coverage with a total aggregate limit of liability
of $1 million for death, bodily injury, and property damage for each
incident;
(2) uninsured or underinsured motorist coverage where
required by Section 1952.101; and
(3) personal injury protection coverage where
required by Section 1952.152.
Sec. 1954.054. LAPSE OF OR INSUFFICIENT COVERAGE. If an
insurance policy maintained by a transportation network company
driver under this subchapter has lapsed or does not provide the
coverage required by this subchapter, the transportation network
company shall provide the coverage required by this subchapter
beginning with the first dollar of a claim against the driver.
Sec. 1954.055. RELATION TO PERSONAL AUTOMOBILE INSURANCE.
Coverage under an automobile insurance policy maintained by the
transportation network company is not contingent on a
transportation network company driver's personal automobile
insurer initially denying a claim.
Sec. 1954.056. FINANCIAL RESPONSIBILITY. (a) Insurance
satisfying the requirements of this subchapter satisfies the
financial responsibility requirement for an automobile under
Chapter 601, Transportation Code.
(b) A transportation network company driver shall carry
proof of insurance that satisfies Sections 1954.052 and 1954.053
with the driver when the driver uses a vehicle in connection with a
transportation network company's digital network. In the event of
an accident, a driver shall provide the proof of insurance to a
directly interested person, automobile insurer, and investigating
peace officer on request under Section 601.053, Transportation
Code. On request, a driver shall also disclose to a directly
interested person, automobile insurer, and investigating peace
officer whether, at the time of the accident, the driver was:
(1) logged on to the company's digital network; or
(2) engaged in a prearranged ride.
SUBCHAPTER C. RELATIONSHIP BETWEEN TRANSPORTATION NETWORK COMPANY
AND TRANSPORTATION NETWORK COMPANY DRIVER
Sec. 1954.101. REQUIRED DISCLOSURES. Before a
transportation network company driver may accept a request for a
prearranged ride on a transportation network company's digital
network, the company shall disclose in writing the following:
(1) the insurance policy, including the types of
coverage and the limits for the policy, that the company provides
while a driver uses a personal vehicle in connection with the
company's digital network; and
(2) that the driver's personal automobile insurance
policy may not provide coverage, depending on the policy's terms,
while the driver is logged on to the company's digital network and
is available to receive transportation requests or is engaged in a
prearranged ride.
Sec. 1954.102. CONTROL OF TRANSPORTATION NETWORK COMPANY
DRIVERS. A transportation network company does not control,
direct, or manage a personal vehicle or a transportation network
company driver who connects to the company's digital network except
as agreed by written contract.
SUBCHAPTER D. PERSONAL AUTOMOBILE INSURANCE
Sec. 1954.151. AUTHORIZED EXCLUSIONS FROM COVERAGE. (a)
An insurer may exclude from coverage under a personal automobile
insurance policy issued to an owner or operator of a personal
vehicle any loss or injury that occurs while a transportation
network company driver using the personal vehicle:
(1) is logged on to a transportation network company's
digital network; or
(2) is engaged in a prearranged ride.
(b) Subsection (a) applies to any coverage included in a
personal automobile insurance policy, including:
(1) liability coverage for bodily injury and property
damage;
(2) personal injury protection coverage under
Subchapter D, Chapter 1952;
(3) uninsured and underinsured motorist coverage;
(4) medical payment coverage;
(5) comprehensive physical damage coverage; and
(6) collision physical damage coverage.
(c) An exclusion authorized under this section applies
notwithstanding a financial responsibility requirement under
Chapter 601, Transportation Code.
(d) This subchapter may not be construed to invalidate or
limit an exclusion contained in a policy form, including a policy
form in use or approved for use in this state before January 1,
2016, that excludes coverage for automobiles used to carry persons
or property for compensation or available for hire by the public.
Sec. 1954.152. COVERAGE UNDER PERSONAL AUTOMOBILE
INSURANCE NOT REQUIRED. (a) This subchapter does not require a
personal automobile insurance policy to cover a transportation
network company driver while:
(1) the driver is logged on to a transportation
network company's digital network;
(2) the driver is engaged in a prearranged ride; or
(3) the driver otherwise uses a vehicle to transport
passengers for compensation.
(b) This section does not prevent an insurer from providing
coverage that may be excluded under this section if the insurer
elects to provide the coverage in the policy or by endorsement.
Sec. 1954.153. DEFENSE OR INDEMNIFICATION OF CLAIM. (a) An
automobile insurer that issues a personal automobile insurance
policy that includes an exclusion from coverage authorized by
Section 1954.151 does not have a duty to defend or indemnify a claim
arising from an event subject to the exclusion.
(b) An automobile insurer that defends or indemnifies a
claim against a transportation network company driver for which
coverage is excluded under the terms of the policy as authorized by
this subchapter has a right of contribution against another insurer
that provides automobile insurance to the driver in satisfaction of
the coverage requirements under Section 1954.052 or 1954.053, as
applicable.
Sec. 1954.154. ASSISTANCE IN CLAIM INVESTIGATION. In an
insurance claim investigation, a transportation network company
and any insurer providing coverage under Subchapter B shall assist
each insurer involved in the claim by providing information to
directly interested persons and an insurer of the transportation
network company driver. Information provided under this section
must include:
(1) the precise times that a driver logged on and off
of the transportation network company's digital network in the
12-hour period immediately preceding and the 12-hour period
immediately following the accident; and
(2) a clear description of the coverage, exclusions,
and limits provided under an automobile insurance policy maintained
under Subchapter B.
Sec. 1954.155. PAYMENT OF CERTAIN CLAIMS. If there is a
lien on a personal vehicle and the transportation network company's
insurer covers a claim arising out of an incident that occurred
during a prearranged ride, the insurer shall issue payment for the
claim:
(1) directly to the person who is repairing the
vehicle; or
(2) jointly to the owner of the personal vehicle and
the primary lienholder.
SECTION 2. This Act takes effect January 1, 2016.
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