NY Taxi Insurer American Transit Lost $700 Million In Q2 And Is Delaying Payouts
Carlos Quiles was injured when his Uber driver crashed in May 2022. Now he's in the midst of a 'nightmare' trying to recoup the insurance money necessary to pay for his medical bills, according to a new report from Bloomberg.
He told Bloomberg: “From the very beginning, it was a nightmare. Each and every time you call, it’s at least 30 minutes hold time. And they either hang up on you or they transfer you to someone else.”
His driver lost control of his Toyota while swatting away an obstruction on the windshield. And Quiles, who needed surgery on his left shoulder due to the accident, is still awaiting payments from American Transit Insurance Co., the driver's insurer. His lawyer has been negotiating with the New York-based company for nearly two years.
The Bloomberg report notes that many others also share frustrations with American Transit (ATIC), the largest insurer of commercial taxis and rideshare vehicles in the city, holding over 60% market share.
Even Uber Technologies Inc. is suing ATIC in federal court, accusing it of repeatedly failing to honor coverage for New York City rideshare drivers involved in accidents.
Uber claims these delays led to 23 lawsuits against the company and its drivers over crashes involving bodily injuries between May and August 2023. ATIC attorneys deny the allegations, but the lawsuit continues as the insurer faces financial trouble, reporting over $700 million in losses in the second quarter, prompting state regulatory intervention.
ATIC’s Chief Financial Officer, Christopher Ryan, and other company representatives did not respond to requests for comment, nor did the lawyers representing the taxi driver in the Quiles case. The company posted $700 million in losses in Q2, "breaching thresholds that require state regulators to intervene", Bloomberg wrote.
The report said that since 2021, a third-party actuary reviewing ATIC's financial statements for the National Association of Insurance Commissioners has repeatedly stated that the company's reserves are inadequate, a view disputed by ATIC's executives.
Without new capital, ATIC risks being unable to pay claims or insure drivers, threatening the city’s transportation network, which relies on over 117,000 cabs. Even if another insurer steps in, drivers could face higher premiums.
Drivers insured by ATIC currently pay $4,000 to $6,000 annually, depending on factors like experience and claims history—rates competitors argue don't match the risk. Fleet owner Dawood Mian warns that if ATIC raises premiums, costs could increase by 30%, further straining an industry already burdened by rising expenses and heavy debt from falling medallion values.
Meanwhile, drivers protested outside City Hall against Uber and Lyft for reducing their access mid-shift to fight a minimum wage rule, cutting their earnings.
New York's Division of Financial Services is “working with the company and other stakeholders to address these longstanding financial issues, and protect drivers, passengers and the stability of the New York livery insurance market", according to the report.