NEW: Geico hustles to close gaps for Uber, Lyft drivers as bill signed

May 11--Gov. Rick Scott has signed a bill setting insurance standards for rideshare services like Uber and Lyft, but Florida's top car insurer does not necessarily cover their drivers at the moment -- even if they have Geico policies and think they are covered.

Geico officials say a new rideshare policy is in the works for Florida, and state regulators say they are set to complete a review of the filing by May 15.

But it highlights a big transition for tens of thousands of drivers and riders as state and industry officials try to keep pace with the surging gig business. And it points to higher costs for drivers, and potentially riders, if insurers ask them to buy commercial coverage or additional protection on a standard personal policy.

Judging by what is happening in other states, at least some competing companies are likely to offer a supplement to a standard personal policy that covers a rideshare driver in what is known as "period 1," before accepting a ride. That still represents an increase in costs to the driver, but it can be considerably cheaper than buying a commercial policy.

The new state law, HB 221, was signed by the governor Tuesday. It takes effect July 1. It sets various levels of insurance that either the rideshare company or driver's personal policy must provide as drivers turn apps off and on and transition from regular civilians to the ride job. HB 221 describes the drivers as independent contractors.

The tricky part is that many standard personal policies exclude "livery" service, meaning driving for hire.

Rideshare companies such as Uber stand ready to provide $1 million coverage if a passenger is actually in the vehicle, and lower amounts if the app is on and the driver has agreed to a pick-up, for example.

But at other stages, a driver's personal policy might apply -- or perhaps not apply. All sorts of scenarios have come up in the couple of years of debate preceding passage of this year's bill.

One question has been whether there's any protection at all for passengers injured with "rogue drivers." Video footage from Denver, aired at meetings in places including Palm Beach County, seemed to show Uber drivers violating a ban to pick up "street hails" instead of using the app. In 2015, an Uber spokesman said making the company cover that would be like making a casino cover gambling outside its doors.

Or what about a driver who does not tell his insurer he does rideshare work, because he doesn't know it's an issue or he fears he would be charged more? If he gets in an accident on the way to a festival where he might get prospective work, does he risk having coverage denied completely, for himself or a pedestrian he might hurt, if his driver status becomes known?

"It is common for personal policies to have livery exclusions," said Geico spokesman Othello Powell. "Many insurers elect to cancel the personal policy because it is not offering the right coverage for the policyholder. We believe we offer the right coverage in 36 states with our rideshare policy which also covers on demand package delivery that is not typically covered on personal policies."

Florida is not among the 36 states -- yet.

"We are excited to share that we have filed our rideshare product in Florida and are currently waiting on the state to approve it," Powell said. "With their approval, drivers will be able to quote and buy a GEICO Rideshare policy through our Commercial Lines department by calling 855-526-5295 or online at geicorideshare.com."

Powell continued, "Using a vehicle to transport people for profit is considered commercial usage and therefore requires appropriate coverage. Our new product provides unambiguous protection without subsidizing the costs of insurance through those with a standard personal auto policy. We are eagerly awaiting the state's approval of our product, so Floridians are not burdened by potential coverage gaps."

Uber spokesman Javi Correoso said, "Florida regulations require that ridesharing companies purchase primary insurance coverage and clarifies coverage responsibilities among insurers. We have seen the market for rideshare endorsements to personal auto policies expand in most of the states where similar legislation has been enacted."

The executive director of a group whose charter members include State Farm, Allstate and Progressive, the Personal Insurance Federation of Florida, said he was not familiar with coverage that individual companies might be planning.

Uber sent emails Tuesday to drivers in eight states outside of Florida saying it will increase its rates by 5 cents a mile in an effort to get drivers to opt in to an injury-protection insurance program, philly.com reported.

The pilot program includes Pennsylvania, Delaware, South Carolina, West Virginia, Illinois, Arizona, Oklahoma, and Massachusetts.

The fare increase is designed to pay for the 3.75 cents a mile cost of insurance for drivers who choose it. Drivers who don't take the coverage can just keep the money, but the news organization quoted an Uber spokesman as saying, "We believe drivers should have a low-cost option to protect themselves and their family against rare and unforeseen accidents that prevent them from working."

For his part, Gov. Scott said, "I'm proud to sign this legislation today to make it easier for ridesharing companies to thrive in Florida and help ensure the safety of our families. Florida is one of the most business-friendly states in the nation because of our efforts to reduce burdensome regulations and encourage innovation and job creation across all industries, including transportation. I look forward to seeing the continued growth of ridesharing companies in our state."

___

(c)2017 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by Tribune Content Agency, LLC.