Appellate Court Mandates PIP Coverage for Uninsured Pedestrians Struck by Ride-Hail Vehicles
Liability insurance policies covering ride-hailing vehicles in New Jersey will now have to include personal injury protection (PIP) benefits for pedestrians who lack their own auto insurance, under a ruling from the state’s Appellate Division. The decision settles a dispute in which Liberty Mutual refused to pay medical expenses for Lamar Boone, a pedestrian hit by a Lyft driver who was actively carrying a passenger at the time.
The court found that while the Transportation Network Company (TNC) Act does not explicitly mention pedestrian PIP, other state laws require every liability policy for commercial or non-private-passenger vehicles to provide such coverage. Additionally, a prior order from the New Jersey Department of Banking and Insurance reinforces that commercial auto policies must contain pedestrian PIP benefits.
As a result, Liberty Mutual is ordered to reform its liability policy for Lyft to add the coverage. The ruling sets a clear precedent that any insurer writing liability coverage for a TNC in New Jersey cannot exclude uninsured pedestrians from no-fault medical benefits.
What the Ruling Means for Liberty Mutual, Lyft and the TNC Insurance Market
Implications for Liberty Mutual and Lyft
Liberty Mutual faces an immediate requirement to amend its Lyft policy, potentially with retroactive effect given the pending claim. The insurer had argued that its TNC-specific policy was not required to offer PIP benefits, but the court rejected that interpretation firmly. This could increase the insurer’s exposure, as it must now pay claims it previously considered uncovered. Lyft, as the named policyholder, may see its insurance costs rise if Liberty Mutual adjusts premiums to reflect the broader mandated coverage—or if the company needs to switch to an insurer that already provides compliant wording.
What This Means for TNC Insurance in New Jersey
The ruling clarifies that any liability policy for a ride-hailing vehicle—whether written for Lyft, Uber or other TNCs—must treat pedestrian PIP the same way as any commercial vehicle policy. Insurers that have omitted or limited this coverage will need to rewrite their policies. This standardizes protection for pedestrians, regardless of insurance status, and eliminates a gap that had left individuals like Boone with no quick source for medical payments after an accident. It also harmonises the TNC Act with existing auto insurance regulations that already required pedestrian PIP for taxis, livery vehicles and other commercial operations.
Industry-wide, the decision may prompt a review of TNC insurance filings across the state. Because the court leaned on a specific department order requiring pedestrian PIP in all commercial auto policies, other insurers cannot claim ignorance. The ruling effectively removes a potential competitive advantage for those carriers that had been selling cheaper policies by excluding the pedestrian benefit.
Immediate Steps for TNC Insurers and Ride-Hailing Companies
- Review and update policy language: Insurers writing TNC liability coverage in New Jersey must immediately confirm that their policies explicitly include pedestrian PIP benefits. The ruling leaves no room for exclusionary wordings, and any gaps could invite similar litigation.
- Liberty Mutual must reform its Lyft policy: The court ordered the specific policy to be amended to provide PIP coverage for uninsured pedestrians. The insurer should also audit other TNC policies it underwrites to ensure compliance statewide.
- TNCs should verify insurer compliance: Lyft and other ride-hailing companies operating in New Jersey should request written confirmation from their insurance carriers that pedestrian PIP benefits are included in all active liability policies, avoiding future disputes like the Boone case.
- Prepare for premium adjustments: Broader coverage obligations are likely to be reflected in future pricing. TNCs and their insurance partners should model the potential cost impact and consider contract renegotiation timelines accordingly.
Risk & Opportunity Assessment
| Commercial Risk | Medium | Liberty Mutual must now cover claims it previously denied, potentially increasing its loss ratio on TNC business. The ruling could also raise premium costs for Lyft and similar policyholders. |
| Competitive Risk | Low | The decision applies uniformly to all insurers writing TNC liability coverage in New Jersey. No single carrier gains an advantage, but those that had excluded PIP benefits must catch up. |
| Regulatory Risk | High | The court enforced an interpretation of existing statutes and a Department of Banking and Insurance order that insurers might have overlooked. Failure to comply now invites regulatory scrutiny and further litigation. |
| Reputation Risk | Low | While Liberty Mutual’s initial denial cast it as denying medical payments to an uninsured pedestrian, the ruling is ultimately about legal interpretation. The broader reputational impact on the industry is limited. |
| Technology Disruption | Low | No technological shift underlies this ruling; it is purely a legal clarification of existing insurance requirements. |
| Commercial Opportunity | Low | There is no immediate opportunity to gain market share from the ruling, though insurers that already offered compliant policies may highlight their comprehensive coverage during renewals. |
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