ITHACA. N.Y.—A New York State regulation is posing a serious threat to Ithaca Carshare, which is now racing to rally support among Albany lawmakers before the current legislative session ends in June.
The regulation essentially rules that insurance for non-profit car shares, which are usually through a risk retention group, or RRG, must come from an insurance provider domiciled in New York State. While Ithaca Carshare had previously been insured, that relationship had grown tenuous over the last decade, during which carshare officials said they began to hear rumblings that their insurance provider would be ceasing its participation in the carshare market.
Those fears were finally realized last year, when the carshare’s insurance provider, Philadelphia Insurance, officially sent them a notice of non-renewal. That means once the carshare’s insurance runs out on May 22, which is their policy’s final day, the organization’s 15-year run built on providing an alternative to car ownership for local residents will have to either pause operations in hopes that a solution can still be found before the legislative session ends on June 8, or will have to shut down entirely.
Both Carshare Director Liz Field and Center for Community Transportation Executive Director Jennifer Dotson called the situation an “existential threat” to the carshare. Dotson said options for insurance were already sparse when the group first found Philadelphia Insurance, but the landscape has grown even more desolate since then.
“Our broker has been shopping for insurance for months and hasn’t found any other carrier willing to carry us,” Field said. “We’re so small that we’re not considered worth the risk. They don’t make enough money off of us.”
“We were hoping that the insurance industry would catch up,” Dotson said, noting that there have been few accidents involving Ithaca Carshare and that their claims have been minimal. “Insurance companies have to be careful because they deal in risk. So we hoped as time would pass, more insurance companies would be interested in providing this coverage because they’d see our history, they’d see where it happens in other states, and so we’d become more of a known quantity. But as it turns out, they’re slower and more conservative [not politically] than we thought.”
Dotson mentioned that the carshare currently has about 1,500 members, with about 500 different drivers using the service regularly. Since its inception 15 years ago, Dotson said insurance has always been one of the more difficult aspects of Ithaca Carshare’s operation. If nothing changes, in 48 days the carshare will be without insurance, and the drivers saving hundreds each month on insurance or gas will be forced to either significantly change their travel habits and routines (during a time when TCAT route options have contracted, no less), or have to purchase a car if their needs are dire enough.
“We have this great community solution,” Dotson said. “We’ve served 8,000 people over the years. It helps people reduce their climate impact, reduce their costs. So it’s pretty disappointing. […] I think [New York State] is going overboard in this case. They’re putting tighter restrictions on a risk retention group than they do with a private insurance carrier. It’s like putting tighter regulations on a credit union than a bank. Or, for food, is GreenStar just like Whole Foods or Trader Joe’s? No, there’s a reason one is a co-op.”
Larger operations like ZipCar can obtain insurance because their fleet size means they pay a much higher per-month premium than an operation like Ithaca Carshare; ZipCar, a for-profit company, has over 2,300 vehicles just in New York City, while the Ithaca Carshare’s fleet is 30 cars total.
“An insurance company can say ‘Sure, we’ll insure you at a $300,000 minimum,’ and that’s the premium [larger companies] have to pay,” Field said. “We can’t meet that need, we can’t pay that amount. We do pay a lot, we have 30 cars, we pay $100 per month per car, so we pay $36,000 per year in insurance. But it’s just not enough for an insurance company to consider us worth it.”
The problem is not unique to Ithaca Carshare. Other carshares in the state, started in the time since Ithaca Carshare was founded in the late 2000s, have had to close because they have been unable to secure insurance at all, or couldn’t afford the premiums they had to pay.
“Buffalo, Rochester and Albany all had non-profit carshares running, that were based on the Ithaca Carshare model, that were much shorter-lived pilots, basically,” Field said.
Ithaca Carshare also has a pending grant through NYSERDA which would deliver enough money to buy nine additional vehicles to add to the fleet, which would all be fully electric. But that money is being withheld until the insurance issue is resolved.
Similarly, Field said virtually all of her other work at the Carshare has been put on pause while the non-profit grapples with the insurance issue. Last week, Field, Dotson and Ithaca-Tompkins County Transportation Council Director Fernando de Aragón traveled to Albany to appeal directly to state lawmakers regarding a new bill introduced to relax the regulation regarding automobile insurance for New York non-profits.
The group was there to push for the approval of a new bill, penned and introduced by State Assemblymember Anna Kelles, whose district includes Tompkins County. State Senator Lea Webb, who also represents Tompkins County, introduced an identical bill on the senate side as well. In theory, the bill would make it much easier for all nonprofits to obtain auto insurance for whatever purpose, not just non-profit carshares.
“Non-profit carshares are community-focused, membership-based services that provide access to cars for local trips to people who can’t or choose not to buy their own vehicle. While there are a few carshares in NYS right now, the opportunity exists to significantly expand this service and its many benefits. This includes improved access to mobility for low- to moderate-income people and reducing transportation emissions as it has similar emissions reduction effects as public transit,” Kelles’ bill states. “However, due to a requirement that all insurers providing coverage in New York State be domiciled here, the state’s only nonprofit carshares will soon be unable to secure required automobile insurance and will be forced to close their operations.”
The bill would allow a risk retention group to provide insurance for non-profit carshares even while being domiciled out-of-state, as long as they register to provide insurance in New York. Field said at this point, there’s only one risk retention group that insures non-profit carshares, but they are based in Vermont. While they would offer policies to New York non-profits if they were able to, Field said, New York State law prevents them from doing so. Thus, if the bill passes, Field said she is certain Ithaca Carshare would be able to obtain the necessary automotive insurance coverage and continue its operations as normal.
“Due to this interpretation of law, Ithaca Carshare and similar operations in Rochester, Buffalo, and Albany will have to close down and residents will lose access to this community resource,” wrote Webb in a statement to The Ithaca Voice. “Member-based car-sharing nonprofits like Ithaca Carshare make transportation accessible and environmentally friendly for folks who either can’t afford a car or choose not to own one for environmental reasons.”
Field and Dotson both encouraged people, whether members of the carshare or not, to reach out to their state representatives if they support the bill introduced by Webb and Kelles and want to see it passed. If the bill is unsuccessful or gets delayed, Dotson and Field said the carshare is working on contingency plans to last as long as possible. But its long-term future would be undeniably bleak.