New York taxi crash sends rider on ‘Nightmare’ to get insurance money

Carlos Quiles says he was seriously injured in May 2022 when the Uber he was riding in crashed into two parked cars in Queens — after the driver lost control of the Toyota while trying to clear a fly or other obstruction from the windshield .

Quiles, who required surgery on his left shoulder, said he is still awaiting payment from American Transit Insurance Co., which underwrote the driver’s policy. His lawyer negotiated with the New York insurer for nearly two years, while Quiles posted about his situation on the company’s Yelp and Google Review pages — complaining about their Kafkaesque handling of the claim.

“Right from the start, it was a nightmare,” said Quiles, who works as a nurse at Brookdale Hospital in Brooklyn. “Every time you call, it takes at least 30 minutes. And they either lock you up or transfer you to someone else.”

He’s far from the only one frustrated with American Transit, the city’s largest insurer of commercial taxis and rideshare vehicles, with more than 60 percent market share. The insurer, also known as ATIC, is being sued in federal court by Uber Technologies Inc. for a “consistent pattern of not providing coverage for New York carpool drivers who have accidents.”

NYC’s main taxi insurer is insolvent, risking transit chaos

Uber claims those delays have led to 23 lawsuits against it and its drivers for accidents involving personal injury between May and August 2023.

ATIC’s lawyers have denied the allegations and the lawsuit is ongoing, but the company is facing financial challenges. The insurer posted losses of more than $700 million in the second quarter, breaching thresholds requiring intervention by state regulators.

New York’s Department of Financial Services told Bloomberg it “worked with the company and other stakeholders to address these long-standing financial issues and protect drivers, passengers and the stability of New York’s quality insurance market.”

Christopher Ryan, ATIC’s chief financial officer, and other company representatives did not respond to email and phone requests for comment. Baker, McEvoy and Moskovits, who work for ATIC and are representing the taxi driver in the Quiles case, did not return calls.

Uber Sues Drivers’ Insurer, Alleging Its Claims Practices Fueled Tort Litigation

If the company can’t find an infusion of capital, it risks not being able to pay claims or insure drivers. This would threaten the city’s transportation ecosystem, which relies on more than 117,000 taxis to transport people around the city. Even if another firm steps in, drivers’ premiums would likely increase.

ATIC-insured drivers typically pay $4,000 to $6,000 in annual premiums, depending on their experience, accident damage and various actuarial calculations — rates that competitors say are disproportionate to the risk.

Dawood Mian, who owns a fleet of cars and author of AutoMarketplace Substack, said that if ATIC were to adjust premiums, owners and drivers could be forced to pay 30% more a year, burdening an industry reeling from years under pressure. of rising expenses, including gas, maintenance and competition.

Update: NYC’s largest taxi insurer ordered to explore sale after losses

The industry is still reeling after many drivers went into crushing debt to buy Medallions, a city-issued license to operate taxis, before values ​​collapsed.

Last Wednesday, drivers gathered outside City Hall to protest Uber and Lyft after they began locking out some of its ride-hailing drivers mid-shift in an attempt to fight the minimum wage rule, which leads to decrease in earnings.

Today, thousands of Uber and Lyft drivers will march on City Hall, then march on Uber’s New York headquarters to demand a real solution to the gridlock crisis.

And if Uber, Lyft and the mayor don’t listen, we’re going on strike next month. https://t.co/G0HU42nnOW

— NY Taxi Workers (@NYTWA) September 4, 2024

“One of the big problems is that there’s essentially a cap on what drivers can afford,” Mian said. “If you charged an average driver, say $8,000, a lot of drivers just can’t make it work.”

ATIC was co-founded by Edward McGettigan, Sr. in 1972. His son and other relatives worked there or served on the board. It is now led by Ralph Bisceglia, who joined ATIC in the 1980s, and remains largely a family owned and operated business. Adrian Bisceglia is currently listed as the company’s director of product development, and various Bisceglia relatives were also on the board.

When Bisceglia joined the company in the 1980s, it was relatively small, but even as early as 1986, state regulators described the company as $6 million insolvent, according to a state examination report obtained by Bloomberg.

The gap between its liabilities and assets grew – but was continually a source of contention between ATIC and accountants. As of at least 2021, a third-party actuary hired to review the company’s regular financial statements filed with the National Association of Insurance Commissioners insisted that the firm’s reserves were insufficient, an opinion with which company executives disagreed.

Tim Zawacki, a senior analyst at S&P Global Market Intelligence, who has covered the industry for 25 years, said the company’s reserves have been considered deficient for decades, but have grown as ATIC has had to contend with larger large claims caused by larger settlements because as well as jury and arbitration awards.

If ATIC can’t continue to insure drivers, “the taxi industry in New York could be in huge trouble,” Zawacki said. “If they can continue to operate, they will probably have to raise premiums. Insurance will be available, but it may be available at a price that many drivers and businesses are unwilling or unable to pay,” he said.

Meanwhile, Quiles says he’s still waiting for resolution. He was unemployed for six months because of his injuries and received two disability payments from ATIC of less than $4,000 each during that period. But they are still waiting for the insurance payments.

He says he still feels the impact of the injuries to this day and is interviewing for less physically demanding roles.

“My lawyer filed a lawsuit and all they’re doing is pushing everything back,” he said, noting he’s been waiting about two years. “They have a lawyer, they just go to court and they keep delaying, delaying, delaying, delaying.”

Top photo: Pedestrians cross a street past traffic in the Midtown neighborhood of New York, U.S., Saturday, June 17, 2023. New York City’s congestion pricing plan for the central business district is expected to get final approval this month. Photographer: Michael Nagle/Bloomberg.

Copyright 2024 Bloomberg.

TOPICS
new york