Current Industry Trends and Changes in Homeowner and Auto Marketplace

Transcription

1 Current Industry Trends and Changes in Homeowner and Auto Marketplace Kym Martell, CRM, CIC, CRIS, AAI K.M. Associates Insurance Management & Training Consultants P.O. Box 358, Allenhurst, NJ P: , F: Web: learnkma.com 1

2 Emerging Exposures Ride Sharing Self Driving Cars Home Sharing Copyright K.M. Associates

3 Ride Sharing- What Is It? Instant Ridesharing Dynamic Ridesharing Ad-hoc ridesharing On-demand ridesharing Services that arranges one-time shared rides on very short notice. This type of carpooling generally makes use of three recent technological advances: GPS, Smart devices and Social Networks Copyright K.M. Associates

4 To Name a Few! Uber Lyft- On demand service that allows a person to request private drivers through applications on their smart devices (Includes UberX, UberXL,Uberblack,UberSUV) On demand service that allows a person to request private drivers through applications on their smart devices Ridester- Sidecar- On demand delivery service that connects riders through applications for ridesharing, delivery services for businesses and carpooling Zimride (Enterprise)- Private Network for companies and Universities Share the Ride- Commuters Carpool, vanpool, transit, bike or walk options Copyright K.M. Associates

5 Ride Sharing Exposures Personal Auto versus Commercial Auto Ridesharing Coverage Exposures BI/PD First Party Third Party Physical Damage Business Income Medical Employment Practices Cyber Copyright K.M. Associates

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7 Personal Auto Coverage Issues & Considerations Personal Auto Policy generally contain a livery exclusion. If a person uses his vehicle as a livery, no liability, medical payments, uninsured/underinsured or physical damage coverage applies. The Transportation Network Companies (TNC) typically are excess to the Personal Auto Policy. Copyright K.M. Associates

8 Coverage Period I- (App On, waiting for Passenger) No personal auto coverage Contingent Liability Coverage - Uber and Lyft o No coverage if driver is at fault o Driver must submit claim to personal auto and have it denied in order to submit to Uber/Lyft for consideration o If Uber/Lyft accept claim- Liability Coverage Only 50/100/25 o No Comprehensive o No Collison o No Towing or Rental o No Medical/PIP Copyright K.M. Associates

9 Coverage Period 2& 3 (En Route to Passenger or On a Trip) Uber/Lyft Coverage o o o o o o $1M of liability 3 rd Party Primary to Personal Auto Excess to Commercial Auto Contingent Physical Damage Deductibles- Uber $1000, Lyft $2500- Driver must submit claim through Personal Auto Policy and have denied before Uber or Lyft will consider claim No Towing or Rental No Business Income $1M - Uninsured/Underinsured Motorist Coverage No Fault Coverage Provided in certain states Copyright K.M. Associates

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12 Coverage for UberBLACK, Uber SUV or UberTAXI Commercially Licensed Vehicles Commercial Auto Policy subject to state and local requirements Copyright K.M. Associates

13 Ride Share Coverage Is Available States Arizona- Farmers, Mercury Arkansas- Farmers California- Farmers, State Farm, USAA, Mercury, AAA, Met Life, Metromile, Liberty Mutual Colorado- Farmers, USAA, MetLife Connecticut- GEICO District of Columbia- Erie, GEICO, Liberty Mutual Georgia- GEICO, Allstate, Ethio-American Illinois- Farmers, Erie, Travelers, USAA, Met Life, Metrorr Indiana- Erie Kansas- Farmers Kentucky- Erie Maine- GEICO Maryland- GEICO, Erie Massachusetts- USAA, Liberty Mutual Minnesota- Farmers States Nebraska- Farmers New Jersey- Farmers Nevada- Farmers, Mercury New Mexico- Farmers, Mercury Ohio- Farmers, GEICO, USAA, Erie Oklahoma- Farmers, Mercury Pennsylvania- Farmers, Progressive (Pilot) South Carolina- GEICO, Allstate Tennessee- Tennessee Farmers Mutual, Erie Texas- GEICO, USAA, Allstate, Farmers, Progressive, Met Life Utah-Farmers Virginia- GEICO, Allstate(Pending) Washington-USAA, Allstate, Met Life Wisconsin- Farmers, Erie Copyright K.M. Associates

14 Insurance Issues and Considerations Contact your carriers to confirm Personal Auto Policy will not cover Check with carriers to obtain updates on coverage for future Develop Communication Protocol to advise clients of Ridesharing exposures Copyright K.M. Associates

15 Endorsements PP Public Livery Conveyance Exclusion Endorsement o Mandatory Default Endorsement to Eliminate: o (Part A) Liability Coverage o (Part B) Medical Payments and o May or May Not Have Coverage (Part C) Uninsured/Underinsured coverage due to state Laws-There will be state-specific filings for exclusions applicable to this coverage, as well as exclusions applicable to (PIP) Personal Injury Protection in no-fault states. o (Part D)- Physical Damage- While the insured is logged into a transportation network platform, as a driver, whether or not a passenger is occupying the vehicle. This language encompasses all three phases of the TNC - Transportation Network Companies Copyright K.M. Associates

16 Endorsements PP Transportation Network Driver Coverage (No Passenger) o Makes an exception to the exclusion for TNC Phases 1 & 2 with respect to Parts A (Liability),B (Med Pay),C (UM/UIM) and D (Physical Damage) Coverages. Copyright K.M. Associates

17 Endorsements PP Limited Transportation Network Driver Coverage (No Passenger) o Makes an exception to the exclusion and only provides coverage for TNC Phase 1 with respect for Part A (Liability), Part B (Med Pay), Part C (UM/UIM) and Part D (Physical Damage) There is no option for Phase 3 because the TNC is expected to provide coverage while vehicle is occupied by a passenger. Copyright K.M. Associates

18 Important Features/Conditions of Coverage 1. Transportation Network Companies (TNC)/Platforms must be listed in a Schedule or shown on the Declarations page of insured s policy as a driver. 2. Endorsement does not revise the definition o insured so the family of the named insured and permissive operators of the scheduled vehicle are considered insureds. 3. Coverage is triggered by any insured who logs into their own platform as a driver. If the insured is unable to to meet a hailing obligation, a substitute driver can provide the ride as long as that driver is logged into their own platform. If they are not logged into their platform, NO Coverage will apply. 4. Using any of the endorsements, coverage only applies if a passenger is not occupying the vehicle. There is no distinction between a paying rider or a non-paying passenger. If a friend/family member is on the ride hailing ride, there may be no coverage. Copyright K.M. Associates

19 Pending Legislation- NJ! 2 Bills Pending May st - Addresses many aspects of ride sharing, background checks and inspection rules for drivers, payment of fees to the state and insurance Minimum Coverage Requirements Phase 1- Liability- $150,000 per incident UM/UIM- $25,000 per incident for PD and Medical Payments - $10,000 per incident Phase 2 &3- Liability- $1.5 Million per incident, Property Damage and UM/UIM Medical Payments- $10,000 per incident Coverage can be purchased through PAP or TNC Companies Copyright K.M. Associates

20 Legislation Pending - NJ 2 nd Bill May 2016 A-3695 & S02179 Based on the Model Ride Sharing Bill developed by the National Association of Insurance Legislators (NAIC) Phase 1- Liability- $ 50,000 for death and bodily injury per person $100,000 for death and bodily injury per incident $ 25,000 for property damage Phase 2-3- Once Driver Engaged in Ride $1,000,000 for death, bodily injury and property damage. Copyright K.M. Associates

21 Legislation Pending- NY Pending Legislation Would amend Insurance Law to add a new section to require TNC s to provide coverage and limits of liability while a driver is using a vehicle in connection with ridesharing/hailing. Phase 2 & 3- TNC and driver must provide: Liability- $1,000,000 for death, bodily injury and property damage and meet the financial responsibility requirements; motor vehicle physical damage coverage, if the participating driver carries such coverage on his policy unless the insurer provides TNC insurance to the driver. During the time the driver logs on to the TNC application and until he logs off, coverage will not be provided by a PAP to the insured or third party, unless the policy expressly provides for that coverage during that time. Copyright K.M. Associates

22 Moving to the Future Copyright K.M. Associates

23 The Future- Self Driving Vehicles What are They? Copyright K.M. Associates

24 Self Driving Car Project Google s Self Driving Car Project- currently being tested in California, Texas and Washington Additional Pilot Projects will include up to 30 US Cities by the end of 2016 and will include buses and pods Artificial-intelligence system operates vehicle Would provide independence and mobility to all people regardless of age, and/or to those with disabilities Would ultimately reduce traffic accidents because 94% of all accidents are due to human error Anticipate Vehicles will be used by consumers within the next 3-4 years! Copyright K.M. Associates

25 Self Driving Vehicles- Pilot Programs Automated Transportation Systems serving both public and private sectors Used for Public Transit Airports, Universities, etc. Campuses Private Passenger Vehicles Pods- pod like vehicles to transport wounded troops to medical facilities Copyright K.M. Associates

26 Auto Makers Currently Involved Tesla Nissan Volkswagen GM Approximate Cost $30,000 (GM) Copyright K.M. Associates

27 Insurance Issues & Challenges State Laws & Regulations Underwriting and Rates Liability Claims- Repair Costs Oh My!!!! Copyright K.M. Associates

28 Home Sharing-Hosting Home Sharing Services where people can list, find or rent lodging just about anywhere in the world o 34,000 Cities o 190 countries o Founded in 2008 o Headquarters in San Francisco, CA o Privately owned Copyright K.M. Associates

29 Home Sharing Services To Name a Few Airbnb VRBO (Homeaway)- FlipKey- Copyright K.M. Associates

30 Home Sharing Exposures Home Sharing Coverage Exposures BI/PD First Party Third Party Property Damage (1 st & Third Party) Business Income Medical Employment Practices Cyber Copyright K.M. Associates

31 Insurance Issues & Considerations Personal Homeowners (HO3, HO6, HO4) Dwelling Coverage Commercial Coverage Separate Coverage Copyright K.M. Associates

32 Homeowner Coverage Forms Cover owner occupants Coverage varies by carrier Check exclusions Does not cover business exposures Some Carriers may provide coverage for short term and limited rentals Copyright K.M. Associates

33 Coverage Options Dwelling Policies Separate Liability Policies or Endorsement on Homeowner Coverage Commercial Policies Home Sharing Insurance Copyright K.M. Associates

34 Home Sharing Insurance Options Home Protection Insurance Program o Apollo, Lloyd's of London o Written on Commercial Liability forms o Subject to Country and State Laws & Regulations o Primary Coverage o $1M per occurrence/$1m per location with aggregate of $10M o Includes Host who lists property and those providing host related services o Covers the rental period o Exclusions Intentional Acts Assault & Battery Sexual Abuse or Molestation Loss of Earnings Personal and Advertising Injury Fungi or Bacteria Chinese Drywall Communicable Diseases Acts of Terrorism Product Liability Pollution Asbestos, Lead or Silica Copyright K.M. Associates

35 Insurance Issues & Challenges Some Companies are excluding coverage for certain perils relating to rentals (i.e. property damage from tenant) Pricing of Homeowner versus Dwelling, Commercial Coverage Liability- Primary and Excess Copyright K.M. Associates

36 Final Thoughts! Copyright K.M. Associates