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🚗 '''Transportation network company (TNC)''' is a business — such as Uber or Lyft — that uses a digital platform to connect passengers with drivers who use their personal vehicles to provide rides for compensation. In the insurance industry, TNCs have created one of the most complex [[Definition:Commercial auto insurance | commercial auto]] and [[Definition:Personal auto insurance | personal auto]] coverage challenges of the past decade, because drivers toggle between personal use and commercial activity throughout a single trip cycle. Regulators, [[Definition:Insurance carrier | carriers]], and [[Definition:Insurtech | insurtech]] companies have had to develop entirely new policy structures and legislative frameworks to address the resulting [[Definition:Coverage gap | coverage gaps]].

⚙️ The insurance challenge revolves around the TNC's operating phases. During Period 1, the driver's app is on but no ride request has been accepted; during Period 2, the driver has accepted a request and is en route to the passenger; and during Period 3, the passenger is in the vehicle until drop-off. Most [[Definition:Personal auto insurance | personal auto policies]] exclude commercial activity, and traditional [[Definition:Commercial auto insurance | commercial auto]] coverage is impractical for gig drivers. TNCs typically maintain a [[Definition:Commercial liability insurance | commercial liability policy]] that covers Periods 2 and 3 at relatively high [[Definition:Policy limit | limits]], while Period 1 coverage — historically a gap — is now addressed in many jurisdictions through state-mandated minimums that the TNC or driver must carry. Some [[Definition:Insurance carrier | insurers]] offer specialized [[Definition:Rideshare insurance | rideshare endorsements]] that bridge the personal-to-commercial transition, and several [[Definition:Insurtech | insurtech]] startups have built [[Definition:Usage-based insurance (UBI) | usage-based]] products that adjust [[Definition:Premium | premiums]] in real time based on the driver's active phase.

💡 TNCs have become a defining case study for how the [[Definition:Sharing economy | sharing economy]] disrupts traditional [[Definition:Risk classification | risk classification]] and [[Definition:Underwriting | underwriting]] models. The blurred line between personal and commercial use forced state [[Definition:Insurance regulation | regulators]] across the United States to pass TNC-specific insurance statutes, many of which prescribe minimum [[Definition:Liability limit | liability limits]] for each operating period. For carriers, the TNC segment offers significant [[Definition:Premium | premium]] opportunity but demands sophisticated [[Definition:Telematics | telematics]] data, dynamic pricing models, and close collaboration with platform operators to manage [[Definition:Loss ratio (L/R) | loss experience]]. As autonomous vehicle technology and new mobility platforms continue to evolve, the regulatory and [[Definition:Product development | product development]] lessons learned from TNC insurance will likely serve as a template for future transportation-related coverage innovations.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Rideshare insurance]]
* [[Definition:Commercial auto insurance]]
* [[Definition:Usage-based insurance (UBI)]]
* [[Definition:Sharing economy]]
* [[Definition:Telematics]]
* [[Definition:Coverage gap]]
{{Div col end}}

Definition:Transportation network company (TNC) - Revision history

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