New Bill Aims to Reduce Insurance Costs for Struggling TLC Drivers
Reducing Excessive Insurance Coverage Requirements
Council Member Carmen de la Rosa (D-Manhattan, District 10) has introduced a major new bill to reduce the excessive, costly insurance coverage requirements for struggling Taxi and Limousine Commission (TLC) drivers in New York City. This much-needed reform will reduce the Personal Injury Protection (PIP) coverage requirement for TLC drivers, aligning it with the coverage standards set for Transportation Network Company (TNC) drivers and personal vehicle drivers across New York State.
The Current Situation
Currently, for-hire drivers in New York City are required to maintain $200,000 in PIP insurance coverage per person—four times the $50,000 requirement for similar drivers throughout the rest of the state. This disparity places an unnecessary financial burden on for-hire drivers in New York City, while also fostering an environment where insurance fraud is incentivized by the higher coverage limit.
The Need for Reform
The legislation comes at a critical time for the industry as the largest insurer of taxis and Ubers in the city, American Transit Insurance Company, faces collapse, threatening the jobs of 74,000 drivers (more than 60 percent of the city’s fleet). By lowering insurance requirements, this bill will also help avert the fallout from ATIC’s insolvency.
Key Benefits of the Bill
Key benefits of the bill include:
Lower Insurance Costs
Bringing the PIP coverage requirement down to $50,000 will significantly reduce insurance costs for all TLC drivers, who are already facing high commercial auto premiums. It will also pass along savings to consumers.
Fraud Reduction
The current high PIP limits have fostered an environment for fraudulent claims, as fraudsters target the higher insurance payouts available under NYC’s $200,000 coverage limit. According to a report released by the New York State Department of Financial Services, suspected no-fault fraud reports accounted for 75% of all fraud reports the department received in 2023. Lowering the limit will help curb these abuses, benefiting both insurers and drivers.
Increased Market Competition
Reducing the PIP threshold will make the NYC market more attractive to insurance carriers, increasing competition and providing more options for drivers.
Conclusion
The bill is expected to receive widespread support from driver advocates, industry stakeholders, and fellow Council Members. A copy of the bill is available here.
FAQs
Q: What is the current PIP coverage requirement for TLC drivers in New York City?
A: The current PIP coverage requirement is $200,000 per person.
Q: What is the proposed PIP coverage requirement for TLC drivers in New York City?
A: The proposed PIP coverage requirement is $50,000 per person, aligning with the coverage standards set for Transportation Network Company (TNC) drivers and personal vehicle drivers across New York State.
Q: Why is the current PIP coverage requirement excessive?
A: The current PIP coverage requirement is excessive because it places an unnecessary financial burden on for-hire drivers in New York City, while also fostering an environment where insurance fraud is incentivized by the higher coverage limit.
Q: What are the benefits of reducing the PIP coverage requirement?
A: Reducing the PIP coverage requirement will significantly reduce insurance costs for all TLC drivers, help curb fraudulent claims, and increase market competition.