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With so many state legislatures now turning their eyes to putting tighter regulation on the insurance industry as a whole - usually as a result of consumer groups' concerns about the affordability of policies overall - a large number of bills are now being considered. However, the insurance industry itself says that not all of them will have a positive impact on the rates policyholders pay, and one such bill just passed the Arizona state Senate. As a result, insurance agents operating in that state may have to keep a close eye on the proceedings to determine whether their clients might end up facing larger costs as a result.

Arizona House Bill 2262 is a law that would make it necessary for the insurance policies provided by ride-sharing companies to only kick in for drivers once a passenger enters their car, rather than prior to that point but when they are still technically seeking a fare, according to a report from the Property Casualty Insurers Association of America. As such, that means that they might be able to drive around without insurance at all, and could in turn end up shifting a larger amount of costs onto all drivers who do have such coverage.

""HB 2262 needs more work to fix the insurance problems,"" said Kelly Campbell, vice president for state government relations for the PCI. ""All Arizona auto insurance customers should not be at risk of paying higher insurance costs because ride sharing companies don't want their insurance policy to be the primary policy. Arizona senators should adopt amendments to HB 2262 that will appropriately protect consumers. Ride-sharing programs should not shift their costs onto all other drivers. Personal auto insurance should not be primary for commercial activity. Senators should fix HB 2262 before it could drive up auto insurance costs.""

What's the problem?
The issue insurers have with the law as it's currently written is that personal auto insurance coverage often doesn't apply to commercial activities such as this, and often these policies specifically exclude the use of a vehicle for ""livery"" purposes, the report said. However, similar legislation has been introduced in a number of states around the country, as well as on the local level in a number of major cities.

If this bill becomes law in Arizona, insurance agents might face the task of having to explain why rates are on the rise for many drivers. Explaining the why and how of this might help prevent clients from trying to shop around.

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