Defense Digest, Vol. 26, No. 1, Spring 2020

Rideshare Vehicles Lyft Auto Exposure in Pennsylvania

By
Nicholas D. Bowers

Key Points:

  • Rideshare statutes require larger minimum policy limits for first party medical, bodily injury, UM and UIM coverages.
  • Pennsylvania rideshare vehicles face greater exposure to high-value losses.
  • Rideshares cannot defend rideshare passenger claims on limited tort grounds.

Rideshare vehicles, operated through companies such as Uber and Lyft, have become omnipresent throughout the United States, and Pennsylvania is no exception to this trend. Indeed, rideshare transportation is more popular than ever in Pennsylvania, in particular in the major cities of Philadelphia and Pittsburgh and the surrounding municipalities. The Pennsylvania legislature has responded by passing two statutes pertaining to “Transportation Network Companies” and “Transportation Network Service[es],” codified at 53 Pa.C.S. § 57A07 and 66 Pa.C.S. § 2603.1 respectively. Both statutes regulate the insurance that must be maintained by rideshare companies operating in Pennsylvania. This article will explore pertinent provisions of both statutes and other issues relevant to the efficient handling of rideshare claims and litigation.

Statutory Scheme

Both rideshare statutes mandate varying insurance coverages, with one coverage minimum applying when a driver is on the applicable rideshare app but has not yet engaged a prearranged ride, and the other higher coverage limit applying when a driver has engaged in a prearranged ride (i.e., when the driver either has accepted a request for a prearranged ride and is on the way to pick up his/her passenger or actually has a rideshare passenger in the vehicle and is on a prearranged ride). Under both circumstances, the insurance coverage maintained by the rideshare company is applicable to the rideshare driver and primary to any auto insurance coverage maintained by the individual driver. See 53 Pa.C.S. § 57A07(f) and 66 Pa.C.S. § 2603.1(a)(5). When a driver is not engaged with a prearranged ride, the applicable rideshare insuierarance minimums are as follows:

(1) Primary automobile liability insurance in the amount of at least $50,000 for death and bodily injury per person, $100,000 for death and bodily injury per incident and $25,000 for property damage.

(2) First-party medical benefits as required under 75 Pa.C.S. § 1711 (relating to required benefits), including $25,000 for pedestrians and $5,000 for a driver.

53 Pa.C.S. § 57A07(b); see also 66 Pa.C.S. § 2603.1(a)(2).

When a driver is engaged with a prearranged ride, the significantly higher statutory rideshare insurance minimums are as follows:

(1) Primary automobile liability insurance that provides at least $500,000 for death, bodily injury and property damage.

(2) First-party medical benefits as required under 75 Pa.C.S. § 1711 (relating to required benefits) on a per-incident basis for incidents involving a transportation network company driver’s operation of a personal vehicle while engaged in a prearranged ride, including $25,000 for passengers and pedestrians and $5,000 for a driver.

53 Pa.C.S. § 57A07(c); see also 66 Pa.C.S. § 2603.1(a)(3).

Impact on No Fault First Party Medical/IDESHARE Claims

Under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL, 75 Pa.C.S. § 1701, et. seq.), Pennsylvania auto policies must include a minimum of $5,000 in First Party Medical (IDESHARE) benefits. See 75 Pa.C.S. § 1711. Under the rideshare statutes, however, the minimum coverage (when a driver is engaged in a prearranged ride) is $25,000 for rideshare passengers and pedestrians. While accidents involving pedestrians may be relatively rare, carriers do face increased IDESHARE exposure in auto accidents involving injuries to rideshare passengers who were not otherwise insured ($25,000 versus the typical $5,000). This is a substantial pool of claims, in particular in the context of major cities where many rideshare users do not have vehicles of their own.

Proactive defense and claims management strategies are recommended in the context of increased first party medical limits. These would include pre-litigation Examinations Under Oath, where warranted, in addition to disciplined scrutiny of requests for treatment and durable medical equipment and related billing.

Impact on Bodily Injury and UM/UIM Claims

When a rideshare partner driver is engaged with a prearranged ride, Uber and Lyft mandate bodily injury, uninsured motorist (UM) and underinsured motorist coverage (UIM) in the amount of $1 million per occurrence, which is in excess of the rideshare statutory minimum of $500,000. Thus, rideshare vehicles are a richer—better insured—target as compared to most personal autos in Pennsylvania. The statutory mandatory minimums for personal automobiles in Pennsylvania is $15,000 per person and $30,000 per occurrence for bodily injury, UM and UIM.

In addition to carrying higher insurance premiums than most Pennsylvania personal automobiles, the carrier protections associated with Pennsylvania’s Election of Tort Options, under 75 Pa.C.S. § 1705, are limited in the context of rideshare vehicles. By way of background, under 75 Pa.C.S. § 1705(d), a claimant who elects to purchase a limited tort policy, as opposed to full tort, will be unable to collect damages for noneconomic damages—pain and suffering—where that claimant did not incur a “serious injury” (defined by 75 Pa.C.S. § 1702 as an injury “resulting in death, serious impairment of a body function or permanent serious disfigurement”). An exception to this rule, however, provides that an individual who would otherwise be bound by the limited tort option shall be considered a full tort plaintiff/claimant where that person was “injured while an occupant of a motor vehicle other than a private passenger motor vehicle.” See 75 Pa C.S. § 1705(d). A rideshare vehicle, moreover, is unlikely to be considered a “private passenger vehicle” because vehicles used as a “livery conveyance,” such as a taxi, are expressly excluded from the definition. See 75 PaC.S. § 1702.

In short, Pennsylvania rideshare vehicles face greater exposure to high-value losses in light of the high bodily injury and UM/UIM limits as compared to Pennsylvania automobiles insured by way of personal auto insurance, which typically involve lower policy limits. Further, rideshares lack the ability to defend claims initiated by rideshare passengers on limited tort grounds, which potentially increases the value of low-impact accidents where the plaintiff may not have sustained a “serious injury.”

The plaintiff’s bar is aware of the vulnerabilities associated with rideshare vehicles. A well-informed and aggressive defense is required to counter the threat.

*Nick is a shareholder in our Philadelphia, Pennsylvania office. He can be reached at (215) 575-2742 or ndbowers@mdwcg.com.

 

Defense Digest, Vol. 26, No. 1, Spring 2020 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2020 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.