Wednesday, July 24, 2024

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New York for-hire vehicles and commuter vans to get captive programme

New York looks prepped to establish a captive insurance programme for commuter vans, black cars, ambulettes and paratransit vehicles, and small school buses, in order to negate proliferating insurance costs, which is putting many drivers out of business.

Legislation S8432 has passed both the State’s Senate and House and is now sat on the Governor’s desk awaiting his signature.

Due to New York insurance costs exceeding $40,000-55,000 a year per driver under certain polices, many drivers currently use New Jersey, Connecticut or other out of state plates to operate in New York.

“The culmination of issues that have affected the for-hire transit market in NY have made commuter vans and other transit options expensive to operate by reducing the financial pool from which insurers could pull from for claims, thereby putting greater costs onto vehicle operator,” a Bill memo noted.

“Many commuter vans and other transit options are being booted and repossessed because they can’t afford to operate.”

There are currently 37 active captives in New York, including several owned by public authorities.

These include First Mutual Transportation Assurance Company, owned by the Metropolitan Transportation Authority (MTA), and WTC Captive Insurance Company, Inc, which was formed in 2004 to cover New York City and its hired contractors in relation to claims arising from work at ground zero after the September 11, 2001 terrorist attacks.

In 2023, NYPA Insurance Company was established for the New York Power Authority to provide coverage for risks that are not currently insured or “prohibitively expensive” in the commercial market.