The E-bike Coverage Question: Far from Resolved

July 10, 2023 / 5 min read

When walking through my neighborhood in Brooklyn, one of the most common sites to behold is someone zooming past—whether in the bike lane, on the sidewalk, in the park or in the roadway—on an electric or motorized bicycle, commonly known as an e-bike. Based on the figures available on e-bike sales in this country, it is likely safe to assume that my neighborhood is not the only one where this is an everyday occurrence. For example, the National Bicycle Dealers Association reported that the U.S. e-bike market is expected to reach $1.6 billion in 2023.¹

e-bike

Insurers seeking coverage solutions may have much to consider as e-bike sales continue to increase.

In fact, in 2020, during the height of the COVID-19 pandemic, Americans bought more than twice as many e-bikes as electric cars. The increased demand during that same year resulted in Citi Bike, the bicycle-program offering access to bike-share rides for New Yorkers, increasing its circulation of e-bikes from 200 in February of 2020 to 3,000 by the end of that year.²

While statewide and federal-level regulation of e-bikes has been well underway over the past two decades, how e-bikes may generally be handled from an insurance coverage perspective continues to evolve. With a relative paucity of available state appellate case law—and, according to certain prominent e-bike safety advocates, an inadequate or outdated regulatory framework—insurers seeking coverage solutions may have much to consider as e-bike sales continue to increase.³

Considerations for insurers offering e-bike coverage

Some of these considerations may be impacted by whether: a state’s statutory definition of “motor vehicle” includes e-bikes and if such state has corresponding statutorily required insurance coverage; if a state has specific statutory requirements regarding coverage for e-bikes; if there are contractual requirements under an e-bike rental agreement and/or whether insurance policy language may expressly address or otherwise extend to claims related to e-bikes. Enhanced claim severity is also likely to accompany the increase in claim frequency as more studies are showing that e-bikes generally carry a higher risk of severe injuries than traditional bicycles.⁴

Federal regulation of e-bikes is essentially limited to issues concerning consumer product safety. Notably, federal regulation treats e-bikes as consumer products akin to bicycles rather than as motor vehicles. Federal law also does not preempt any state traffic laws or vehicle codes, leaving the actual operation of e-bikes to be generally governed by state law. Despite general statewide consistency in the regulation of certain e-bike features, there is not a uniform approach under state law regarding the licensing, registration and/or compulsory insurance requirements attached to e-bikes.⁵

Thus, in the common situation where an e-bike owner is not required to insure liabilities arising from the operation of their e-bike or insure their e-bike on a first party coverage basis– and that individual is not among the relatively select few who have purchased a standalone e-bike policy⁶—that person will want to consider whether their auto, motorcycle, condo, renters, homeowners, or condo policy expressly provides coverage in the event of a collision.

Establishing a Legal Precedent

To illustrate how some of these e-bike coverage considerations may be interpreted legally, it may be instructive to look at one of the few decisions that address some of these issues – including one case from 2019.⁷According to the opinion, the Defendant/e-bike rider (“e-bike rider”) was riding his e-bike on a Seattle recreational trail when he collided with another individual riding a traditional bicycle causing the traditional bike rider to suffer injuries requiring surgery. Crucially, the e-bike rider was operating the e-bike by pedal at the time of the accident rather than powering it with the motor.

On the day of the collision, the e-bike rider owned homeowners, landlord’s dwelling and automobile insurance policies. The e-bike rider’s homeowners and landlord’s dwelling policies both excluded coverage for bodily injuries arising out of the ownership, operation or use of a “motorized land vehicle”, but neither policy defined that term. The e-bike rider’s auto policy coverage addressed damages to others due to loss resulting from owning, maintaining or using a covered auto or non-owned auto. In relation to the auto policy, without even delving into the question of whether the e-bike would be considered as an auto, the court found that the claim was not covered because of the simple fact that the e-bike in question was not included in the policy’s declarations. Regarding the homeowners and landlord’s dwelling policies, the crux of the dispute between the insurer and the insureds centered on whether the e-bike fell within those policies’ “motorized land vehicle” exclusions.

The court deemed “motorized land vehicle” to be an ambiguous term because it could be construed to mean either a vehicle that is equipped with a motor, or a vehicle powered by a motor. The insured argued that the definition of “motorized” should be understood to mean powered by a motor whereas the insurer claimed it should be interpreted as “equipped with a motor” Following well-established precedent, the court construed this purportedly ambiguous exclusionary language in favor of the insured, thus leading the court to conclude that “motorized” meant “powered by a motor,” which rendered the exclusions inapplicable because the e-bike rider’s e-bike was not powered by its motor at the time of the accident.

How Verisk can help

A number of our line of business units have been actively reviewing issues and monitoring developments regarding e-bikes, including the Commercial and Personal Auto lines of business. With respect to homeowners insurance coverage, ISO’s Homeowners program has specifically addressed e-bike coverage related issues in its 2022 Homeowners Multistate Forms Revision filing.

Some relevant highlights of that filing included: making changes to include e-bikes as part of the “motor vehicle” definition in Homeowners base policy forms, revising a recreational motor vehicle liability coverage endorsement to provide liability coverage with respect to owned motorized bicycles used off an insured location, increasing the speed limitation in that same endorsement in order to accommodate use of Class 3 e-bikes, and giving insurers the option to exclude liability coverage with respect to non-owned e-bikes. We will continue to research and track case law regarding insurance coverage of e-bikes.

Wang, Fia. “E-Bike Market Report 2022 – 2023.” Revi Bikes, 19 Feb. 2023, https://www.revibikes.com/blogs/news/e-bike-market-report-2022-2023.
Marx, Patricia. “Hell on Two Wheels, Until the E-Bike’s Battery Runs Out.” New Yorker, 2 & 9 Jan. 2023, https://www.newyorker.com/magazine/2023/01/02/hell-on-two-wheels-until-the-e-bikes-battery-runs-out
See https://peopleforbikes.cdn.prismic.io/peopleforbikes/9f82d6e1-b64a-4483-a9ae-9100e8a71970_IndustryLetterofSupport_May2022.pdf.
Chander, Vishwadha. “E-bikes show distinct pattern of severe injuries.” Reuters, 25 Dec. 2019, https://www.reuters.com/article/us-health-ebike-injuries/e-bikes-show-distinct-pattern-of-severe-injuries-idUSKBN1YT0MV.
See generally, https://peopleforbikes.cdn.prismic.io/peopleforbikes/cbd1d6f5-d26a-4865-95ce-92c6bcdd26a4_E_Bike_Law_Handout_2023_January.pdf.
Rivelli, Elizabeth. “The Best Ebike (Electric Bike) Insurance of 2023.” Investopedia, 8 Jan. 2023, https://www.investopedia.com/best-ebike-insurance-5121122.
Metro. Prop. & Cas. Ins. Co. v. Herrera, 2019 WL 6035416 (W.D. Wash. Nov. 14, 2019)