Insurance Woes Could Ground Hundreds Of Phila. Taxis

Oct. 23--More than 25 percent of Philadelphia taxis may be forced off the streets by Friday evening for lack of adequate insurance coverage, the Philadelphia Parking Authority said Thursday.

The financial collapse of an insurance company that specialized in insuring taxis means that 466 of Philadelphia's 1600 taxis will have to find a new insurer by 5 p.m. Friday or stop operating, PPA general counsel Dennis Weldon said.

PPA officials will ground any cabs that try to operate without proper insurance after the deadline, Weldon said. The PPA can disable a cab's meter remotely, and PPA enforcement officers will attach orange stickers to cabs that are not permitted to operate.

"We consider this a serious public safety concern," Weldon said. "Someone in the public can't tell by looking" if a cab is properly insured.

An attorney for taxi owners said he will seek an emergency hearing from a PPA hearing officer Friday, seeking more time for the cab owners to find replacement insurance.

The attorney, Michael Henry, said he also will ask Commonwealth Court Friday for a temporary injunction to prevent the PPA from shutting down cabs by the Friday deadline.

"The weekend is probably the period of heaviest demand for taxi service," Henry said. "Our concern is that people would need taxi service but wouldn't be able to get service."

First Keystone Risk Retention Group, Inc., a commercial auto insurance company organized and licensed in South Carolina with its headquarters on Aramingo Avenue, was ordered liquidated Tuesday by a South Carolina judge at the request of the state insurance director, who said the company was insolvent.

The judge also ordered existing insurance policies cancelled in 30 days.

The PPA was notified of First Keystone's financial problems by South Carolina's insurance department Wednesday, Weldon said.

First Keystone could not immediately be reached for comment Thursday.

Based on the South Carolina ruling, the cab owners still have coverage for 30 days, until the policies are cancelled, Henry contended. If First Keystone is unable to pay claims, an injured party "would have recourse against the taxi cab itself," he said.

Taxi medallions in Philadelphia, which taxis must have to operate, currently are worth about $500,000. Claimants could seek some or all of that value, if insurance is inadequate, Henry said.

[email protected]

215-854-4587

@nussbaumpaul

___

(c)2014 The Philadelphia Inquirer

Visit The Philadelphia Inquirer at www.philly.com

Distributed by MCT Information Services