An agency notices more clients renting electric scooters and bikes by the hour and is particularly concerned about Bird and Lime products, due to their value.
Q: How can insureds secure coverage for physical damage to the rented e-scooter or e-bike, and, more importantly, their personal liability?
Response 1: Personal liability from a homeowners or renters policy is unlikely to cover the use of an e-bike because of the exclusion for motor vehicles. A motorcycle policy that covers an owned motorcycle or scooter might extend liability to a non-owned e-scooter, but even then, the insurer may argue that shared vehicles might be available for the insured's regular use.
Some personal umbrellas don’t require underlying coverage—generally when a vehicle isn't included in the definition of "recreational vehicle"—and could drop down to provide third-party liability. Damage to an e-bike may cost less than $1,000, which should be manageable without insurance.
Response 2: Depending on the speed of the vehicle and the exact wording of the exclusions, most HO policies are unlikely to cover this exposure.. Where I live, these vendors must be licensed. The licensing authority should require the vendor to insure the exposure.
Response 3: This is not limited to Bird and Lime products. People rent larger scooters all the time. Any coverage would depend on the policy form. The ISO personal auto policy would exclude liability coverage because the e-bike or e-scooter is a vehicle with fewer than four wheels.
There's probably no physical damage coverage, either, unless you can convince the carrier it's a private passenger auto within the definition of “non-owned auto," which would be a real stretch.
An e-bike or e-scooter definitely meets the definition of “motor vehicle" on the ISO HO policy: “a self-propelled land or amphibious vehicle.” So that policy may provide liability coverage, as long as the e-scooter isn’t subject to registration for use on public roads or property. It wouldn’t provide physical damage coverage, however.
The best and possibly only solution might be to purchase coverage from the rental agency.
Response 4: Advice to customers: These products can be fun, but they are dangerous, and most people have no insurance for the liability that arises from using one. Some might have medical insurance for injuries they sustain while using a Bird, but there is no universal approach to coverage for related exposures. Use them at your own risk.
Bird itself tells customers, "Your automotive insurance policies may not provide coverage for accidents involving or damage to this vehicle. To determine if coverage is provided, you should contact your automotive insurance company or agent."
Some broad HO policies might provide liability coverage, but most forms probably won’t. You would need to review each carrier’s form to determine coverage status under the HO policy and PUP, or as well as available endorsements to the PAP.
Response 5: In my opinion, e-scooters and similar devices are within the definition of "motor vehicles" for both Section I and Section II, and thus excluded.
Response 6: The property risk, although important, is small change compared to the liability exposure. Unless you find a carrier with a special endorsement for these devices, I don't think the HO policy will be the answer to either exposure. A PUP might be the answer.
These exposures illustrate one of the most difficult challenges an agent faces: the great unknown. It's similar to renting a jet ski and a host of other stuff that may or may not be covered by everyday HO policies. Agents need to constantly educate clients on emerging risks and the problems they pose for insurance policies.
Will they pay attention if your e-newsletter points out this exposure? Probably not, but you might score a point or two when the errors & omissions claim comes.
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