Insurance woes could ground hundreds of Phila. taxis

More than 25 percent of Philadelphia taxis may be forced off the streets by Friday evening for lack of adequate insurance coverage, the Philadelphia Parking Authority said Thursday.

The financial collapse of a company that specialized in insuring taxis means that 466 of Philadelphia's 1,600 taxis will have to find a new insurer by 5 p.m. Friday or stop operating, PPA general counsel Dennis Weldon said.

PPA officials will ground any cabs that try to operate without proper insurance after the deadline, Weldon said. The PPA can disable a cab's meter remotely, and PPA enforcement officers will attach orange stickers to cabs that are not permitted to operate.

"We consider this a serious public safety concern," Weldon said. "Someone in the public can't tell by looking" if a cab is properly insured.

A lawyer for taxi owners said he would seek an emergency hearing from a PPA hearing officer Friday, and request more time for the cab owners to find replacement insurance.

Michael Henry said he also would ask Commonwealth Court on Friday for a temporary injunction to prevent the PPA from shutting down cabs by the Friday deadline.

"The weekend is probably the period of heaviest demand for taxi service," Henry said. "Our concern is that people would need taxi service but wouldn't be able to get service."

First Keystone Risk Retention Group Inc., a commercial auto insurance company organized and licensed in South Carolina and with its headquarters on Aramingo Avenue, was ordered liquidated Tuesday by a South Carolina judge at the request of the state insurance director, who said the company was insolvent.

The judge also ordered existing insurance policies canceled in 30 days.

The PPA was notified Wednesday of First Keystone's financial problems by South Carolina's insurance department, Weldon said.

First Keystone could not immediately be reached for comment Thursday.

Based on the South Carolina ruling, the cab owners still have coverage for 30 days, until the policies are canceled, Henry contended. If First Keystone is unable to pay claims, an injured party "would have recourse against the taxicab itself," he said.

Taxi medallions in Philadelphia, which taxis must have to operate, currently are worth about $500,000. Claimants could seek some or all of that value if insurance is inadequate, Henry said.