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SOURCE National Association of Mutual Insurance Companies
INDIANAPOLIS, May 13, 2014 /PRNewswire-USNewswire/ -- The largest property/casualty insurance trade association in the country has told the D.C. Council that it is concerned about what kind of insurance covers the growing ridesharing industry, and under what circumstances. The National Association of Mutual Insurance Companies wants the council to make sure citizens "are not caught in a gap where coverage may not be provided."
Erin Collins, state affairs director for the Mid-Atlantic region at NAMIC, says a measure pending before the council should acknowledge that ridesharing is a commercial activity, not merely a technological innovation. As a result, according to Collins, "coverage for the commercial enterprise should be the primary coverage and should not be secondary to any personal auto policy that the driver possesses."
NAMIC also wants the council to draw a "bright line" that establishes the beginning and end of the commercial activity so that there are no disputes over when the commercial coverage is in effect. "Any dispute would undoubtedly provide less protection to consumers and potentially encourage fraud," Collins noted.
She said the ridesharing company or other provider of commercial coverage must accept the duty to both defend and indemnify drivers as part of the policy. Collins calls this aspect of coverage a "sacrosanct tenet of auto insurance" and said it is especially necessary for this commercial interaction with the public at large.
Collins' comments were contained in a letter to council member Mary Cheh - Ward 3, who held a hearing on the Transportation Network Services Innovation Act of 2014.
The 1,400 NAMIC member companies serve more than 135 million auto, home and business policyholders and write more than $196 billion in annual premiums, accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market.
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