New York City Cab Crash Sends Rider on ‘Nightmare’ to Get Insurance Money

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

Quiles, who required surgery on his left shoulder, said he is still waiting for payments from American Transit Insurance Co., which underwrote the driver’s policy. His lawyer has been negotiating with the New York-based insurer for almost two years, while Quiles has posted about his predicament on the company’s Yelp and Google Review pages — complaining about the Kafkaesque way they dealt with his claim.

“From the very beginning, it was a nightmare,” said Quiles, who works as a trauma emergency room nurse at Brookdale Hospital in Brooklyn. “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.”

He’s far from alone in being frustrated by American Transit, the largest insurer of commercial taxis and rideshare vehicles in the city with a market share of more than 60%. The insurer, also known as ATIC, is being sued in federal court by Uber Technologies Inc. for a “consistent pattern of failing to honor coverage for ride-share drivers in New York City who get into accidents.”

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Uber alleges that those delays caused 23 lawsuits to be brought against it and its drivers over crashes involving bodily injuries between May and August 2023.

ATIC attorneys have denied the allegations, and the suit is ongoing, but the company faces financial challenges. The insurer posted more than $700 million in losses in the second quarter, breaching thresholds that require state regulators to intervene.

New York’s Department of Financial Services told Bloomberg it has been “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.”

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

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

Drivers insured by ATIC typically pay annual premiums of $4,000 to $6,000, depending on their experience, accident claims and different actuarial calculations — rates that competitors say are not commensurate with the risk.

Dawood Mian, who owns a fleet of cars and authors the AutoMarketplace Substack, said that if ATIC needed to adjust premiums, owners and drivers could be forced to pay 30% more a year, straining an industry that has been buckling for years under the pressure of rising expenses, including gas, maintenance and competition.

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

Last Wednesday, drivers gathered outside City Hall to protest against Uber and Lyft after they started locking out some of its rideshare drivers mid-shift in an attempt to fight a minimum wage rule, leading to decreased earnings.

Today, thousands of Uber & Lyft drivers will rally at City Hall, then march on Uber’s NYC headquarters to demand a real solution to the lockout crisis.

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

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

“One of the big issues is there’s fundamentally a cap to what drivers can afford,” said Mian. “If you charged a driver on average, let’s say $8,000, many drivers just simply cannot make that work.”

ATIC was co-founded by Edward McGettigan, Sr. in 1972. His son and other relatives have worked there or served on the board. It’s now run by Ralph Bisceglia, who joined ATIC in the 1980s, and remains very much a family-owned and run firm. Adrian Bisceglia is currently listed as the company’s chief product development officer, and various Bisceglia relatives also have been on the board.

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

The gap between its liabilities and assets has only grown — but has continually been a source of contention between ATIC and accountants. Since at least 2021, a third-party actuary hired to review the company’s regular financial statements filed with the National Association of Insurance Commissioners has insisted the firm’s reserves are insufficient, an opinion the company’s executives disagreed with.

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 it’s escalated as ATIC has had to grapple with bigger claim sizes driven by larger settlements as well as jury and arbitration awards.

If ATIC can’t keep insuring drivers, “the New York taxi industry could face huge issues,” said Zawacki. “If they manage to keep operating, they will likely have to raise premiums. Insurance will be available but it may be available at a price that many drivers and companies are unwilling or unable to pay,” he said.

Meanwhile, Quiles says he is still waiting for his settlement. He was out of work for six months because of the injuries and received two disability payments from ATIC of less than $4,000 each over the period. But he is still waiting for insurance payments.

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

“My attorney filed a lawsuit and all they keep doing is pushing everything back,” he said, noting that he has been waiting for about two years. “They have an attorney, they just go to court and they continue to delay, delay, delay, delay.”

Top photo: Pedestrians cross a street past traffic in the Midtown neighborhood of New York, US, on 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.