👩⚖️☂️ Uber Sues NYC TLC Insurance Giant American Transit
👩⚖️☂️ Uber Sues NYC TLC Insurance Giant American Transit
Uber is suing NYC TLC liability insurance giant American Transit (ATIC) related to failure to provide drivers appropriate coverage and protect Uber from liability
Uber is suing NYC for-hire transportation (TLC) liability insurance giant American Transit Insurance Company (ATIC)
AutoMarketplace analysis estimates American Transit has an over 60% NYC TLC liability insurance market share
Lawsuit does not appear to be directly related to driver insurance premiums increasing, rather American Transit’s failure to protect Uber and NYC TLC drivers from insurance claims
Bloomberg reported that Uber is suing NYC TLC auto liability insurance giant American Transit (also known as ATIC). Based on AutoMarketplace analysis, American Transit insures over 60% of all NYC TLC-plated vehicles, many of which service Uber (& Lyft) dispatches.
Uber’s case relates to what the rideshare company says is a consistent pattern of failing to honor coverage for NYC TLC-licensed drivers who get into accidents.
“American Transit Insurance Co.’s “unreasonable practices” handling claims has resulted in 23 lawsuits brought against Uber and its drivers over crashes involving bodily injuries, leaving the ride-share giant to pay “substantial amounts” to defend itself, according to the complaint filed late Friday in federal court in New York.”
- Bloomberg (Uber Sues Insurer for Refusing to Cover NYC Drivers in Crashes, by Robert Burnson, February 17, 2024 at 10:41 AM EST)
The case is Uber Technologies Inc. v. American Transit Insurance Company, 24-cv-01207, US District Court, Southern District of New York (Manhattan).
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ATIC Solvent?
While the lawsuit is a new story, we also wanted to flag an article, from almost three years ago, published by S&P Global Market Intelligence, which highlighted a report that questioned the solvency of American Transit. In simple terms, an independent actuary report questioned whether American Transit was in a position to cover its claims.
“Ronald Kuehn of Huggins Actuarial Services in a statement of actuarial opinion said the $190 million provision for unpaid losses and loss-adjustment expenses made by American Transit Insurance Co. is $508.8 million less than the $698 million he considered the minimum necessary...Using his estimate, Kuehn said American Transit's statutory policyholders surplus would render it insolvent by $430.9 million.”
- S&P Global (Actuary says NY livery insurer's reserves 'inadequate' by more than $500M, by Tom Jacobs & Terry Leone, June 4, 2021)
To be fair, American Transit CFO Chris Ryan did comment to S&P at the time of their 2021 article that the “company does not accept the actuary's projection because of the "unique nature" of the New York City commercial auto industry, the impact of "underwriting and claims fraud investigation and defense initiatives".
Given American Transit’s NYC TLC insurance market share dominance, this 2021 S&P article is important to note. We are not implying, and neither are we in a position to judge, ATIC’s solvency. However, these types of reports must be noted, especially as it can provide further context related to Uber’s recent legal action against ATIC.
NYC TLC Insurance Overview
In case you missed it, we published Part 1 of our 2024 NYC TLC Insurance Industry Overview a few days ago (see below). Part 2 will be published in the coming days.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
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