September 20th, 2013
About a quarter of Philadelphia’s 1,600 taxicabs are covered by an insurance company that’s in liquidation, putting at risk anyone who comes into contact with them in a traumatic way.
Vehicles insured by Washington-based Ocean Risk Retention Group, which went under earlier this month, are technically covered through Oct. 6, but any accident claims filed by then, plus the more than 600 already pending, will be paid as part of the liquidation.
That could take a year, longer if the process produces any lawsuits, according to the District of Columbia’s Department of Insurance, Securities and Banking, which initiated the liquidation.
And in the end, there may not be enough money to pay everyone what they are owed because Ocean’s assets appear to only narrowly outweigh its debts.
“It is tight. It’s going to be close,” said Dana Sheppard, associate commissioner of the D.C. regulatory agency.
Calls and e-mails sent to Ocean principals on Thursday were not answered.
The Philadelphia Parking Authority, which regulates taxicabs, did not respond yesterday to an InquirerRight to Know request for the names of taxi companies that purchase insurance from Ocean.
But Jim Ney, director of the PPA’s taxi and limousine division, said about 480 of the city’s 1,600 cabs have been affected. Ney said the parking authority has not tracked whether companies have purchased new insurance since being notified of the 30-day deadline, though he assumes some are actively looking, adding that cabs without valid insurance won’t be allowed to operate.
That’s not going to help Jesse Todd and Lauren Todd, who were hit by an Ocean-insured cab during an outing last year in South Philadelphia.
Their lawyer, Scott Bennett, said the married couple were stopped at the corner of 10th and Tasker Streets when a cab rear-ended their scooter, ejecting Lauren, who hit her head against the pavement.
Since the August 2012 crash, they both have experienced severe pain and undergone dozens of chiropractic appointments, Bennett said. They had hoped to recoup $50,000 each in medical and related expenses before Ocean’s risk adjuster recently halted the process.
“They’re basically stuck,” Bennett said. No insurance. And these taxicab companies, they’re not big businesses you can go after. A lot of them are independent contractors. They’re stuck.
” David Alperstein, executive director of the Greater Philadelphia Taxi Association, believes the PPA’s assurances doesn’t fix the problem: Claims would still stall in liquidation. He said the parking authority should have taken a more proactive approach by pulling affected cabs off the road until stable coverage is purchased.
“Basically, you know a ship is sinking and you’re letting more passengers on,” he said.
But Ney said Ocean’s insurance is still legal and his office took steps quickly to let the taxi companies know when it would no longer be. Any cabs that don’t have valid coverage on Oct. 7 will be immediately taken off the road, he said.
Ney added that he expects Ocean will have enough assets to pay its claims because the law requires insurers to keep those funds in a reserve.
Sheppard, though, said it will be a close call. In March filings Ocean claimed to have $5.6 million in debts and $6.6 million in assets. Those numbers could change – for the worse – once liquidators start tallying claims and collecting assets, he said.
Sheppard said all valid claims will be paid but possibly at a portion of total value. That rate would be uniform for all claimants, he said.