Arizona Uber Insurance, Lyft, Livery, Taxi, TNC Insurance Requirements

Arizona Uber Insurance, Lyft, Livery, Taxi, TNC Insurance Requirements

Listed below is HB 2135 which establishes new insurance requirements for Uber, Lyft, Total Transit, Livery, Taxi, and other TNC Insurance Requirements:

Overview

HB 2135 establishes the transportation network companies (TNC) article governing TNCs and TNC drivers, and outlines financial responsibility requirements for TNCs and livery vehicles, taxis, and limousines.

History

The Arizona Department of Weights and Measures (DWM) is the primary authority for licensing and regulating taxi, livery vehicles and limousines in the state. Statute requires owners of livery vehicles, taxis and limousines to allow DWM to inspect criminal background checks and drug testing of vehicle operators and allow the inspection of vehicle maintenance records (Arizona Revised Statutes (A.R.S.) § 41-2097). Additionally, statute specifies the licensing requirements for taxi, livery vehicles and limousines (A.R.S. § 41-2091).

A.R.S. § 41-2051 defines livery vehicle and taxi. A livery vehicle is a motor vehicle that provides passenger services for a fare determined by a flat rate or flat hourly rate between geographic zones or within a geographic area. A taxi is defined as a motor vehicle that is registered as a taxi in this state or any other state and offers local transportation for a fare determined primarily on the basis of the distance traveled.

Provisions

Transportation Network Company

1. Requires a company to obtain a permit issued by DWM in order to operate a TNC in this state.

2. Directs DWM to charge and collect an application fee as determined by DWM.

3. Requires DWM to issue a permit to an applicant that meets the specified requirements.

4. Direct the TNC to maintain an agent for service of process in this state.

5. Requires the TNC to display trade dress to identify the TNC vehicle with a particular TNC while the vehicle is used to provide services. The TNC must file an illustration of the trade dress with DWM.

6. Permits a TNC to charge a fare for transportation network services provided to passengers, and disclose the calculation method of the fare on its website or within the digital network or software application.

7. Requires the TNC to provide the applicable rates being charged and the option to receive an estimated fare before the passenger enters the TNC vehicle.

8. Requires the TNC digital network or software application to display a picture of the TNC driver and the license plate number of the motor vehicle used for providing the service.

9. Directs the TNC to transmit to the passenger an electronic receipt, within a reasonable period of time following the completion of the trip, indicating the following:

a. Origin and destination of trip.

b. Total time and distance of trip.

c. An itemization of the total fare paid, if any.

Transportation Network Company Zero-Tolerance Policy

10. Directs a TNC to implement a zero-tolerance policy on the use of drugs and alcohol while a TNC driver is providing services or is logged in to the TNC digital network or software application but not providing services, and that the policy be provided on the TNC website.

a. This policy must include procedures to file a complaint about a driver with whom a passenger was matched and who the passenger reasonably suspects was under the influence of drugs or alcohol during the course of the trip.

11. Mandates the TNC to immediately suspend (until completion of an investigation) the driver’s access to the TNC digital network or software application and to conduct an investigation upon receipt of a passenger complaint alleging a violation of the zero-tolerance policy.

12. Stipulates that the TNC must permanently deactivate the driver’s access to the TNC’s digital network or software application if the investigation confirms that the driver violated the zero-tolerance policy, and requires the TNC to maintain enforcement records for at least two years after the date a passenger complaint is received by the TNC and make the records available to DWM on request.

Transportation Network Company Drivers

13. Requires the TNC to do the following prior to a person accepting trip requests through a digital network or software application:

a. Require the person to submit an application to the TNC that includes the person’s name, address, age, driver license number, driving history, motor vehicle registration, motor vehicle insurance information and any other information requested by the TNC.

b. Conduct, or have a third party conduct, a local and national criminal background check for each applicant that includes a search of a multijurisdiction criminal records locator or similar, validated commercial nationwide database, and a national sex offender registry database.

c. Obtain and review a driving history report for the applicant.

d. Require that all TNC vehicles used by TNC drivers meet state vehicle safety and emissions standards for private vehicles and have at a minimum an annual brake and tire inspection performed by a qualified third party.

14. Prohibits a TNC from allowing a person to act as a TNC driver who:

a. Has had more than three moving violations or one major violation (attempting to evade the police, reckless driving or driving on a suspended or revoked license) in the preceding three years.

b. Has been convicted within the preceding seven years of serious felony violations, DUI, extreme DUI, or DUI on a suspended, cancelled, revoked or refused license.

c. Is listed in a national sex offender registry database.

d. Does not possess a valid driver license.

e. Does not possess proof of registration for the motor vehicle that will be used as the TNC vehicle.

f. Does not possess proof of financial responsibility for the motor vehicle that will be used as a TNC vehicle.

g. Is not at least 19 years of age.

15. Requires the TNC to maintain records of the criminal background check conducted of each driver and to make the records available to DWM on request.

Transportation Network Services

16. Specifies that a TNC driver shall accept rides booked exclusively through a TNC’s digital network or software application.

17. Authorizes DWM to impose a civil penalty of not more than $1,500 per violation or any TNC driver who is found to be soliciting or accepting street hails.

a. Does not apply to a TNC driver who is not required to accept rides booked exclusively through a TNC’s digital network or software application.

18. Directs the TNC to maintain individual trip records for at least one year after the date each trip was provided and the TNC driver records until the one-year anniversary of the date of the driver’s activation on the TNC’s digital network or software application has ended, to make records available to DWM on request.

TPT Exemption

19. Exempts a TNC with a permit and a TNC driver from paying the transaction privilege tax or any similar tax imposed by any taxing authority in this state on transactions in which a TNC driver is providing transportation network services.

Transportation Network Company Disclosures

20. Requires the TNC to disclose to its drivers in writing or electronic format, specified information before the driver may accept a request for services on the TNC’s digital network or software application.

21. Specifies the TNC insurer to issue a payment for a comprehensive or collision claim to the business repairing the vehicle or jointly to the owner of the vehicle and the primary lienholder on the covered vehicle.

Financial Responsibility Requirements

22. Requires a person that is subject to the financial responsibility requirements pursuant to statute for transporting passengers in vehicles with a seating capacity of not more than eight passengers including the driver to maintain a motor vehicle liability insurance policy containing one of the following:

a. Minimum coverage and uninsured motorist coverage in the amount of at least $250,000, or

b. Other minimum coverage amounts as prescribed by statute.

23. Outlines the financial responsibility requirements for TNCs, taxis, livery vehicles, and limousines as follows:

a. For a TNC that requires a driver to accept rides exclusively through a software application:

i. During the time the driver is logged into the software application but not providing transportation network services:

Ø Prior to March 1, 2016, coverage amounts of 25,000/50,000/20,000.

Ø After March 1, 2016, coverage amounts of 25,000/50,000/20,000. Further outlines how coverage is maintained.

ii. During the time the driver is providing transportation network services:

Ø Commercial coverage and uninsured motorist coverage in the amount of 250,000.

b. For a TNC that does not require a driver to accept rides exclusively through a software application:

i. During the time the driver is logged into the software application but has not accepted a ride request:

Ø Commercial coverage amounts of 25,000/50,000/20,000.

ii. During the time the driver has accepted a ride request and is providing passenger transportation:

Ø Commercial coverage and uninsured motorist coverage in the amount of 250,000.

c. For a taxi, livery vehicle, or limousine:

i. During the time the driver has not accepted a ride request and is not providing passenger transportation:

Ø Commercial coverage amounts of 25,000/50,000/20,000.

ii. During the time the driver has accepted a ride request and is providing passenger transportation:

Ø Commercial coverage and uninsured motorist coverage in the amount of 250,000.

Livery Vehicles, Taxis and Limousines

24. Removes the requirement for an owner to have drug testing records and vehicle maintenance records available for inspection at all times by DWM.

25. Removes the requirement for a preemployment drug test and random drug tests for a livery vehicle, taxi or limousine drivers.

26. Requires that owners ensure that all vehicles meet state vehicle safety and emissions standards for private vehicles as well as have at a minimum, an annual brake and tire inspection performed by a qualified party.

27. Requires owners to maintain vehicle safety and emissions inspection records for at least two years and make the records available to DWM on request.

28. Directs owners to implement a zero-tolerance policy on the use of drugs and alcohol while a driver is providing or is available to provide passenger transportation, and that this policy be provided on the company’s website or in the taxi, livery vehicle or limousine.

a. This policy must include procedures to file a complaint about a driver with whom a passenger was matched and who the passenger reasonably suspects was under the influence of drugs or alcohol during the course of the trip.

29. Mandates the owner to immediately suspend (until completion of an investigation) the driver’s access to the owner’s taxi, livery vehicle or limousine and conduct an investigation upon receipt of a passenger complaint alleging a violation of the zero-tolerance policy.

30. Stipulates that the owner must permanently prohibit the driver’s access to the owner’s taxi, livery vehicle or limousine if the investigation confirms that the driver violated the zero-tolerance policy, and that the owner must maintain enforcement records for at least two years after the date a passenger complaint is received by the owner and make the records available to DWM on request.

Miscellaneous

31. Provides definitions for pertinent terms.

32. Excludes from the motor vehicle definition, in relation to canceling or non-renewing an insurance policy, a vehicle that otherwise qualifies as a motor vehicle only while the driver of the vehicle is logged in to a TNC’s digital network or software application or is providing transportation network services, unless expressly covered by the private passenger policy, beginning March 1, 2016.

33. Adds that a motor vehicle insurance policy that has been in effect for 60 days, or that has been renewed, effective immediately, may not be canceled or nonrenewed unless, beginning March 1, 2016, the named insured or any other person who operates the motor vehicle insured under the policy uses the vehicle rated or insured as a TNC vehicle to provide transportation network services unless, while the driver is logged in to the TNC’s digital network or software application or is providing transportation network services, either:

a. Has procured an endorsement to the private passenger policy that expressly provides such coverage, or

b. Is covered by a motor vehicle liability insurance policy issued by another insurer specifically providing such coverage.

34. Specifies that an insurer may provide a private passenger policy endorsement which expressly provides coverage for a transportation network service, however that endorsement may not be treated as basic coverage and any termination of the endorsement may not be treated as a modification of basic coverage.

35. Allows an insurer to terminate an endorsement and requires a notification of termination to be sent to the policyholder at least 45 days prior to the effective date of the termination.

36. States the notice must include an explanation that providing further transportation network services may subject the insured to cancellation or nonrenewal of the private passenger motor vehicle policy.

37. Clarifies that an insurer is not required to offer or issue a policy or endorsement that includes coverage for any liability incurred while the TNC driver is logged in to the TNC’s digital network or software application or is providing transportation network services.

38. Expands the state preemption regarding municipal regulation to TNC vehicles and TNCs.

39. Exempts TNCs, TNC drivers, or TNC vehicles from the reregistration on becoming liable for weight fee statute.

40. States that a motor vehicle liability policy is not required to insure liability, beginning March 1, 2016, for a private passenger motor vehicle used while a TNC driver is logged in to a TNC’s digital network or software application or is providing transportation network services unless expressly authorized by the terms of the insurance policy or an endorsement or amendment to the policy.

41. Stipulates that, beginning March 1, 2016, the TNC driver’s policy and the vehicle owner’s personal policy are not required to provide any coverage for the motor vehicle, the TNC driver, the vehicle owner, or any third party while a TNC driver is logged in to the TNC software application or is providing services, unless the policy or endorsement expressly provides coverage.

42. Allows an insurer to offer one of the following coverages while a TNC driver is logged in or providing services:

a. A motor vehicle liability insurance policy expressly providing such coverage, or

b. An amendment or endorsement to an existing motor vehicle liability insurance policy specifically providing such coverage.

43. Specifies that the TNC, taxi, livery vehicle, or limousine driver must carry proof of insurance in the vehicle at all times while logged in to the software application or providing services.

44. Requires the TNC, taxi, livery vehicle, or limousine driver, if involved in an accident, to provide proof of insurance to the parties involved at the time of the accident and to notify the TNC or taxi, livery vehicle, or limousine owner of the accident.

45. Requires the TNC, or taxi, livery vehicle, or limousine owner and any insurer providing coverage to fully cooperate in the exchange of information in a claims coverage investigation.

46. States, beginning March 1, 2016, the financial responsibility requirements do not create an obligation for an insurer to provide coverage for any liability arising while the TNC driver is logged in to the digital network or software application or is providing services.

47. Allows an insurance policy to be offered by an authorized insurer or a surplus lines insurer.

48. Authorizes the Department of Insurance, as part of its annual survey of insurance companies, to request information from insurers regarding the availability of policies and policy endorsements offered to a TNC driver and how many such policies or endorsements have been purchased or cancelled during the survey period.

49. Exempts from the transporting classification TNCs that are subject to the permit fee, or TNC drivers on transactions involving services, as prescribed by statute.

50. Makes technical and conforming changes.

51. Contains a legislative intent clause.

52. Provides a temporary exemption from rulemaking requirements for DWM or the Arizona Department of Transportation (ADOT) for the purposes of implementing this act.

53. Directs Legislative Council to transfer and renumber applicable provisions should the responsibility of regulation of livery vehicles, taxis, and limousines be transferred from DWM to ADOT.

source was the 52nd Legislature

Best regards,
Gary Hanson
Professional Insurance Strategies, LLC
6708 W. Bethany Home Rd
Glendale, AZ 85301

ghanson@proinsgroup.com
602-481-0161
623-551-6716 Fax

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