E-Bikes and E-Scooters: What you need to know
Electric bikes, electric scooters and low-speed vehicles (LSVs) are growing in popularity. Between 2018 and 2022, which is the latest available data, sales of e-bikes rose from approximately 250,000 per year to more than one million, while the rentals of both e-bikes and e-scooters also increased dramatically, according to the National Association of City Transportation Officials (NACTO).
As the use of these personal micromobility devices (PMDs)—defined as lightweight, micro-sized vehicles with limited power and speed, used over short distances—continues to grow and evolve, emergency rooms are seeing many more people injured while riding e-bikes and e-scooters.
While e-bikes and e-scooters offer a convenient and eco-friendly mode of transportation, there are downsides to their use, with more than 20,000 people injured each year while riding an e-bike and approximately 3,000 requiring hospitalization, according to the American College of Surgeons.
The growing popularity of these devices also presents carriers with liability challenges. “E-bikes and scooters are increasingly popular, and many models now reach speeds comparable to mopeds,” says Laurel Page, assistant vice president, recreational product management, American Modern, a Munich Re company. “These vehicles present unique risks, including severe accidents, theft and battery-related fires.”
Crucially, “most homeowners and renters policies exclude motorized vehicles, leaving significant coverage gaps,” she says. For agents, this presents an opportunity to work with carriers and clients to bridge the knowledge gap and ensure their clients have the necessary coverage or are aware of the exposure.
“Customers may not immediately think about e-bikes, dirt bikes or scooters when discussing their insurance needs, so, as a first step, agents should ask about ownership of any of these types of vehicles,” says Scott Hall, motorcycle product manager at Progressive Insurance. “That simple question can open the door to a meaningful conversation about why coverage matters, highlighting liability risks, potential financial impact from an accident and the protection insurance can provide if the vehicle is stolen or damaged.”
As usage increases, the concern is that many users are unaware of the risks and potential gaps in coverage. “In reality, homeowners policies often exclude motorized vehicles or provide limited coverage only while the vehicle is on the insured property, and the policy may indicate a sublimit for e-bikes,” Hall says. “Even when coverage does apply, homeowners should consider the potential impact to their premium if they file a claim related to an e-bike.”
“Consumer misunderstanding can lead to two problems: owners either go uninsured or mistakenly believe they’re protected, only to face unexpected gaps and financial consequences later,” Hall continues. “Agents can play an important role in educating consumers on available coverages under existing policies, any limitations and the benefits of a standalone policy.”
As trusted advisors, agents can explain why homeowners and auto policies don’t adequately protect e-bikes, scooters, golf carts and dirt bikes.
These include highlighting “the problems one might see on an endorsed homeowners policy, excluding guest passenger liability and uninsured or underinsured motorists’ coverage. These are auto coverages recreational vehicle owners might expect to have,” says Eric Uturo, product manager, Foremost – a Farmers Insurance Company. “A recreational vehicle insurance policy from an insurer specializing in this type of insurance can help customers avoid potential coverage gaps.”
Additionally, “these products have many small manufacturers and parts producers, which can cause complexity for non-specialized insurer claim departments,” Uturo says. They can also “promote standalone policies that offer dedicated protection for liability, damage and theft without impacting homeowner policy claims, as well as comparing multiple carriers to deliver the best combination of coverage and price, reinforcing their role as a trusted advisor,” Page says.
Additionally, by keeping up to date on technological changes within the market, as well as the changing rules and regulations around e-bikes, e-scooters and LSVs, agents can help alleviate carrier concerns when it comes to scenarios, such as “misclassification” by “treating motorized bikes or scooters as standard bicycles—leading to inconsistent underwriting and unrecognized risk,” Page says.
Identifying and highlighting risks, such as “high-speed models increasing injury severity, expensive components and lithium-ion batteries introducing fire hazards that require specialized coverage, as well as varying state regulations creating complexity and uncertainty in policy design,” Page says, can add to the valuable role agents play for both carriers and their clients.
Submitted by: Big I Independent Agents
