The GigReporter

American Transit Insurance Co. (ATIC) is the largest insurance provider for taxis, black cars, app-based rideshare drivers, and other livery services, covering 60% of that market in the New York City area. The Insurance Journal reports[1] that ATIC is insolvent, putting tens of thousands of livery drivers at risk.

ATIC has had reserve shortfalls for decades stemming from the low premiums it charges, a problem exacerbated by recent increases in settlements, judgments, and arbitral awards, plus unwise company officer bonuses. A letter from the New York Department of Financial Services (DFS) dated April 4, 2024[2], states ATIC’s reserves are deficient by than $650 million, and ordered the company to consider selling to a buyer that has the necessary capital.

DFS may be forced to liquidate ATIC or put it into receivership if it can’t cure the insolvency. If ATIC stops providing insurance there could be devastating consequences, as competing providers may not be able to collectively absorb all the ATIC customers leaving livery drivers unable to work. Even if all those insureds were able to switch to new providers, they would almost certainly have to pay substantially higher premiums.

Logistics brokers worried if the fallout will affect their own insurance markets should know that SCI is now sponsoring a hired and non-owned insurance plan through Transport Benefit Group, a responsibly managed company. This exclusive HNO+ program includes $1 million coverage for Hired & Non-Owned vehicles, Contingent Auto Liability, and General Liability/3rd party liability, alongside $100,000 for Errors and Omissions and Primary Cargo/Contingent Cargo Liability. HNO+  features a pay-as-you-go payment system so customers don’t pay for more than what they need while appropriate premiums are collected for the risk born by the company.

[1] “New York City’s Biggest Taxi Insurer Is Insolvent, Risking Transit Meltdown”, https://www.insurancejournal.com/news/east/2024/09/04/791291.htm , September 4, 2024; “New York Regulator Orders Taxi Insurer to Weigh Sale After Losses”, https://www.insurancejournal.com/news/east/2024/09/05/791628.htm , September 5, 2024.

[2]  See https://www.dfs.ny.gov/system/files/documents/2024/09/ATIC_Report-on-Exam-Financial_2018.pdf.