Last Tuesday June 30th, the Maine ridesharing legislation, LD 1379, cleared the House by a vote of 138-1. The Senate voted unanimously for the new regulations to become law.
The new rules in Maine set insurance and safety requirements for ridesharing services such as Uber and Lyft who host a network of independently contracted drivers that pick up fares through a smartphone application. Drivers who use these services will now be subject to the same insurance regulations as anyone who uses their vehicle for commercial use (i.e food delivery drivers, couriers etc.) and will need to purchase a commercial auto or “Livery” policy in order to be adequately covered in the event of an accident.
How could this affect your credit union?
The concern for Maine credit unions is regarding the influence of ridesharing services on members’ personal auto insurance policies and whether or not the credit union collateral is exposed to physical damage or skip risk.
In the event that a member has a credit union financed vehicle that has been physically damaged, and is using their vehicle as an independently contracted taxi through the Uber service or for any other “Livery” (i.e.: the transportation of people, products or services); their personal auto insurance policy would not protect them or the credit union.
There are two ways to provide protection of your collateral for physical damage:
- CPI (Collateral Protection Insurance, i.e. force-placed insurance) that typically protects for physical damage only, or a blanket policy.
- LSI (Lenders Single Interest or Vendors Single Interest) protects for physical damage, skip claims, instruments and non-filings (E&O) and a suite of endorsements.
Insurance Trust has researched this unique issue and has found a commercial endorsement solution. With this endorsement, your credit union can protect your collateral in the event that the primary auto insurance company denied coverage for ANY commercial use (including Uber), as long as the vehicle is under the endorsement weight limit.
We are happy to provide a side by side comparison of the product features and carriers.
If your credit union would like more information regarding this solution, please reach out to Tim Dalton firstname.lastname@example.org or complete the contact form below.