Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2293

Introduced by Assembly Member Bonilla

February 21, 2014

begin delete An act to amend Section 11580.24 of the Insurance Code, relating to motor vehicle insurance coverage. end delete begin insert An act to add Chapter 8.5 (commencing with Section 5430) to Division 2 of the Public Utilities Code, relating to transportation. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2293, as amended, Bonilla. begin delete Private passenger motor vehicle insurance coverage: personal vehicle sharing. end delete begin insert Transportation network companies: insurance coverage: disclosure. end insert

begin insert

Under existing law, the Passenger Charter-party Carriers’ Act, the Public Utilities Commission has adopted rules and regulations relating to public safety risks in the operation of transportation services utilizing transportation network companies. Those regulations define a transportation network company as an organization operating in California that provides prearranged transportation services for compensation using an online-enabled platform to connect passengers with drivers using their personal vehicles. Existing regulations of the commission require, among other things, a transportation network company to acquire a commercial liability policy for incidents involving transportation network company vehicles and drivers in transit to or during a transportation network company trip.

end insert begin insert

This bill would more broadly define “transportation network company” by excluding the requirement that a transportation network company trip be prearranged and would require a transportation network company to disclose in writing to participating drivers, as part of its agreement with those drivers, the insurance coverage and limits of liability provided by the transportation network company and to advise a participating driver in writing that the driver’s personal automobile insurance policy may not provide coverage while the driver makes himself or herself available for transportation network company services.

end insert begin delete

Existing law prohibits a private passenger motor vehicle, as defined, from being classified for insurance purposes as a commercial, for-hire, permissive use vehicle, or livery solely on the basis of it being used for personal vehicle sharing, as defined, if the annual revenue received by the vehicle’s owner that is generated by personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle and the personal vehicle sharing is conducted pursuant to a personal vehicle sharing program.

end delete begin delete

This bill would make technical, nonsubstantive changes to those provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION end insert begin insert 1 end insert begin insert . end insert   

end insert

begin insert Chapter 8.5 (commencing with Section 5430) is
added to Division 2 of the end insert begin insert Public Utilities Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 8.5. end insert Transportation Network Companies

 

begin insert 5430. end insert   

As used in this chapter, a “transportation network
company” is an organization, including, but not limited to, a
corporation, partnership, or sole proprietor, operating in
California that provides transportation services for compensation
using an online-enabled application or platform to connect
passengers with drivers using their personal vehicles.

begin insert 5431. end insert   

A transportation network company shall disclose in
writing to participating drivers, as part of its agreement with those
drivers, the insurance coverage and limits of liability that the
transportation network company provides while a driver makes
himself or herself available for transportation network company
services, and shall advise a participating driver in writing that the
driver’s personal automobile insurance policy may not provide
coverage while the driver makes himself or herself available for
transportation network company services.

end insert

begin delete

SECTION 1.  

Section 11580.24 of the Insurance Code is
amended to read:

11580.24.  

(a) A private passenger motor vehicle insured by
its owner pursuant to a policy of insurance subject to Section
11580.1 or 11580.2 shall not be classified as a commercial vehicle,
for-hire vehicle, permissive use vehicle, or livery solely because
its owner allows it to be used for personal vehicle sharing if all of
the following circumstances apply:

(1) The personal vehicle sharing is conducted pursuant to a
personal vehicle sharing program.

(2) The annual revenue received by the vehicle’s owner that
was generated by the personal vehicle sharing of the vehicle does
not exceed the annual expenses of owning and operating the
vehicle, including depreciation, interest, lease payments, auto loan
payments, insurance, maintenance, parking, fuel, cleaning,
automobile repair, and costs associated with personal vehicle
sharing, including, but not limited to, the installation, operation,
and maintenance of computer hardware and software, signage
identifying the vehicle as a personal sharing vehicle, and any fees
charged by a personal vehicle sharing program.

(3) The owner of the private passenger motor vehicle does not
knowingly place the vehicle into commercial use, as defined by
Section 675.5, by a personal vehicle sharing user while engaged
in personal vehicle sharing.

(b) For purposes of this section the following definitions apply:

(1) “Personal vehicle sharing” means the use of private
passenger motor vehicles by persons other than the vehicle’s owner,
in connection with a personal vehicle sharing program.

(2) “Personal vehicle sharing program” means a legal entity
qualified to do business in the State of California engaged in the
business of facilitating the sharing of private passenger vehicles
for noncommercial use by individuals within the state.

(3) “Private passenger motor vehicle” means a vehicle that is
insured, or is subject to being insured, under a personal automobile
liability insurance policy insuring a single individual or individuals
residing in the same household, as the named insured, or meets
the requirements of Section 16058 of the Vehicle Code, but does
not include a vehicle with fewer than four wheels.

(c) A personal vehicle sharing program shall, for each vehicle
that it facilitates the use of, do all of the following:

(1) During all times that the vehicle is engaged in personal
vehicle sharing, provide insurance coverages for the vehicle and
operator of the vehicle that are equal to or greater than the
insurance coverages maintained by the vehicle owner and reported
to the personal vehicle sharing program. However, the personal
vehicle sharing program shall not provide liability coverage less
than three times the minimum insurance requirements for private
passenger vehicles. Compliance with the terms and conditions of
this paragraph shall be deemed to avoid the application of the
limitation on damage recoveries set forth in Section 3333.4 of the
Civil Code.

(2) Provide the registered owner of the vehicle with a
Department of Motor Vehicles Form REG 5085 or other suitable
proof of compliance with the insurance requirements of this section
and the requirements of the California Financial Responsibility
Law in Section 1656.2 of the Vehicle Code, a copy of which shall
be maintained in the vehicle by the vehicle’s registered owner
during any time when the vehicle is operated by any person other
than the vehicle’s owner pursuant to a personal vehicle sharing
program.

(3) Collect, maintain, and make available to the vehicle’s owner,
the vehicle owner’s primary automobile liability insurer on file
with the Department of Motor Vehicles, and to any other
government agency as required by law, at the cost of the personal
vehicle sharing program, verifiable electronic records that identify
the date, time, initial and final locations of the vehicle, and miles
driven when the vehicle is under the control of a person other than
the vehicle’s owner pursuant to a personal vehicle sharing program.

(4) Provide the vehicle’s owner and any person that operates
the vehicle pursuant to a personal vehicle sharing program with a
disclosure that contains information explaining the terms and
conditions contained in this section.

(5) Not knowingly permit the vehicle to be operated for
commercial use by a personal vehicle sharing user while engaged
in personal vehicle sharing.

(6) Use only private passenger vehicles.

(7) Facilitate the installation, operation, and maintenance of
computer hardware and software and signage, necessary for a
vehicle to be used in a personal vehicle sharing program, including
payment of the cost of damage or theft of that equipment and any
damage caused to the vehicle by the installation, operation, and
maintenance of that equipment.

(d) Notwithstanding any other law or any provision in a private
passenger motor vehicle owner’s automobile insurance policy, in
the event of a loss or injury that occurs during a time period when
the vehicle is under the operation and control of a person, other
than the vehicle owner, pursuant to a personal vehicle sharing
program, or otherwise under the control of a personal vehicle
sharing program, the personal vehicle sharing program shall assume
all liability of the owner and shall be considered the owner of the
vehicle for all purposes. Nothing in this section limits the liability
of the personal vehicle sharing program for its acts or omissions
that result in injury to any persons as a result of the use or operation
of a personal vehicle sharing program.

(e) A personal vehicle sharing program shall continue to be
liable pursuant to subdivision (d) until both of the following occur:

(1) The private passenger motor vehicle is returned to a location
designated by the personal vehicle sharing program.

(2) The earliest of one of the following occurs:

(A) The expiration of the time period established for the
particular use of the vehicle.

(B) The intent to terminate the personal vehicle sharing use is
verifiably communicated to the personal vehicle sharing program.

(C) The vehicle’s owner takes possession and control of the
vehicle.

(f) The personal vehicle sharing program shall assume liability
for a claim in which a dispute exists as to who was in control of
the vehicle when the loss occurred giving rise to the claim, and
the vehicle’s private passenger motor vehicle insurer shall
indemnify the personal vehicle sharing program to the extent of
its obligation under the applicable insurance policy, if it is
determined that the vehicle’s owner was in control of the vehicle
at the time of the loss.

(g) If the owner of the vehicle is named as a defendant in a civil
action, for a loss or injury that occurs during a time period when
the vehicle is under the operation and control of a person, other
than the vehicle’s owner, pursuant to a personal vehicle sharing
program, or otherwise under the control of a personal vehicle
sharing program, the personal vehicle sharing program shall have
the duty to defend and indemnify the vehicle’s owner, subject to
the provisions of subdivisions (d) and (f).

(h) Notwithstanding any other law or any provision in a vehicle
owner’s automobile liability insurance policy, while a private
passenger motor vehicle is used by a person other than its owner
pursuant to personal vehicle sharing facilitated through a personal
vehicle sharing program, all of the following shall apply:

(1) The insurer of that vehicle on file with the Department of
Motor Vehicles may exclude any and all coverage afforded
pursuant to its policy.

(2) The primary and excess insurer or insurers of the owners,
operators, and maintainers of the private passenger motor vehicle
used in a personal vehicle sharing program shall have the right to
notify an insured that it has no duty to defend or indemnify any
person or organization for liability for any loss that occurs during
use of the vehicle in a personal vehicle sharing program.

(i) No policy of insurance that is subject to Section 11580.1 or
11580.2 shall be canceled, voided, terminated, rescinded, or
nonrenewed solely on the basis that the private passenger motor
vehicle has been made available for personal vehicle sharing
pursuant to a personal vehicle sharing program that is in
compliance with the provisions of this section.

end delete