Raul Pizano, of Dominican Cab Inc., waits for his next fare at Kennedy Plaza. A bill approved by the R.I. Senate would require $300,000 of insurance coverage for each taxi.
Checker Cab Co. pays $6,200 in insurance premiums per taxi each year, manager Tony Leiter said – and that’s with no accidents and perfect driving records.
The state mandates $25,000 combined coverage for property damage and personal injury, but the Providence taxi company gets $75,000, Leiter said. A bill passed by the state Senate on May 11 and now awaiting a hearing before the House, however, would require a lot more.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
The measure, sponsored by Sen. William Walaska, D-Warwick, would require minimum coverage of $300,000 for taxis and jitneys, which are defined as a bus or van with a predetermined route, such as an airport shuttle.
“This hasn’t been looked at in quite some time,” said Walaska, adding the $25,000 auto insurance coverage is “just not enough.”
The last time state legislators altered auto insurance coverage for taxis was around 1981, said Terry Mercer, associate administrator at the R.I. Division of Public Utilities motor carriers section, which brought the issue to the attention of the General Assembly about a year ago.
“The insurance mandate for jitneys has been the same since 1922,” Mercer said.
The bill requires taxis and jitneys to choose between raising coverage to $300,000 as the combined single limit, or to $250,000 per person, $500,000 per accident, and a $100,000 property damage split.
Leiter said he favors increasing coverage because it protects the passenger and the taxi company from lawsuits in the case of an accident where coverage falls short of covering all expenses.
“I’m all for a rate increase,” Leiter said. “If they went up to $300,000 and kept the premiums the same then it wouldn’t affect us.”
Dennis Charland, executive director of Independent Insurance Agents of Rhode Island, said premiums wouldn’t stay the same, but they probably would increase just “a little bit.”
“It is up to the insurance company what the increase will be,” he said, adding that insurance companies have to justify the rates they charge with the R.I. Department of Business Regulations.
Leiter said if premiums increased by $500, it could be sustainable, but the costs of running a taxi company are too high to pay much more.
Auto insurance premiums have doubled since the Sept. 11, 2001, terror attacks, he said.
That, combined with the increase in gas prices, upgrades mandated by the state, maintenance costs, and rate increases caused by accidents and tarnished driving records, make it difficult for taxi companies to stay in business.
“We’ve gone up in price,” Leiter said of taxi fees. “But not enough to offset the increase in insurance alone.”
Charland said he believes the minimum coverage should be raised to more than $300,000. His organization, which acts as a voice for about 200 independent insurance providers in the state, supports the legislation because it extends more protection to the consumer, he said.
The average person cannot afford the lawyer fees involved in suing a taxi company for hospital bills that exceed the current $25,000 minimum, he said. They might not know where to begin.
Mercer said the division originally asked the General Assembly to consider coverage of $1.5 million, which is the same as is mandated for limo and sedan services. But the amount was reconsidered as evidence came forward showing insurance companies might be reluctant to extend that amount of service.
Because of taxis’ high exposure, Charland said, most insurance companies are reluctant to write policies for them at all. Taxis are on the streets nearly 24 hours a day, seven days a week, he noted, which makes them more susceptible to accidents and traffic violations.
Walaska said the expense for taxi and shuttle companies was considered in the decision to raise minimum coverage. So was the amount insurance companies would be willing to cover.
“I expect the premium is going to go up,” he said. “As I understand it, it won’t be high.”
Walaska said he has seen no opposition to the bill and is confident that it will be approved by the House.
“I don’t anticipate any problems,” he said. “It should pass.”
