If you’ve been to a major U.S. city recently, there’s a good chance you’ve encountered an electric scooter (e-scooter). In part one of this series, we explored how e-scooter rentals have, seemingly overnight, become an additional mode of transportation and, in some cases, potentially increased risk in urban environments.
While the physical risks of e-scooter rides are being scrutinized by researchers, we’d like to focus here on the insurance implications of this increasingly popular mode of urban transport.
Although there may be insurance guidelines in place for some e-scooter rental companies, e-scooter riders may be currently operating in something of a gray area when it comes to insurance, according to Verisk research. Riders may only be dimly aware that when they click “accept” on a voluminous terms-of-service document in a rental app, they’re often assuming liability for any injuries or damage they inflict or sustain during their ride.1 They’re not covered by typical auto insurance policies, because those tend to insure operators of four-wheeled, motorized vehicles. They’re also unlikely to be covered by a homeowners or renters policy, either. Into this gap, some companies are looking to sell “on-demand” or episodic insurance to e-scooter riders to protect them for the duration of the ride—similar to policies offered to commercial drone operators who can insure their aircraft for the length of a given flight.2
Meanwhile, an e-scooter rental company operating outside the United States offers personal rider insurance to its renters to differentiate itself from companies that currently do not provide liability coverage for e-scooter riders under traditional auto or homeowners’ policies.3 That said, the prevailing model in the U.S. is for e-scooter renters to assume liability, according to Verisk research of existing e-scooter rental company agreements.
E-scooter riders may benefit from coverage, but there are several questions.
- Should e-scooter coverage reside in a homeowners or rental policy?
- Should it be an optional endorsement to an auto policy?
- Should it be made available in all of the above?
- If e-scooter endorsements are added to an auto policy, should the coverage include med pay for first-party bodily injuries?
For homeowners policies, there are several considerations for e-scooter coverage:
- whether the vehicle is owned vs. non-owned
- whether the risk should be classified by speed or propulsion (self versus motorized)
- whether the e-scooter is used in an insured location versus usage anywhere worldwide
An era of micromobility devices dawns
Research suggests that by 2023, there could be 2.6 million e-scooters weaving in and out of our streets. 4
While e-scooters represent a new challenge for insurers and the cities they operate in, they could also help reduce car congestion, car accidents, and attendant car pollution.5 They could also provide a lower-cost form of transportation to underserved communities.6 Some cities have found that e-scooters were often used to replace short car rides (and they can also replace short walks).7,8 As bike lanes continue to proliferate, e-scooters will likely have a safer path to travel on crowded city streets.9
At Verisk, we’re committed to continuing the conversation around micromobility, e-scooters, and new insurance models to enable these trends to thrive. We’re working on solutions to address the potential gaps in the market for e-scooter riders. Please feel free to share your thoughts with me at Sandee.Perfeto@verisk.com.
- “When Electric Scooters Crash, Who Pays the Bills?” Auto Blog, June 30, 2019, https://www.autoblog.com/2019/06/30/when-electric-scooters-crash-who-pays-the-bills/, accessed on January 6, 2020.
- Paul Sawers, “Voom Targets EScooter Boom with On-Demand Insurance for Per-Trip Coverage,” Venture Beat, May 22, 2019, https://venturebeat.com/2019/05/22/voom-targets-escooter-boom-with-on-demand-insurance-for-per-trip-coverage/, accessed on January 6, 2020.
- Roxanne Libatique, “Beam Emphasises Insurance Policy in E-Scooter Trial Report,” Insurance Business, September 4, 2019, https://www.insurancebusinessmag.com/nz/news/breaking-news/beam-emphasises-insurance-policy-in-escooter-trial-report-176924.aspx, accessed on January 6, 2020.
- The Bike and Scooter-sharing Telematics Market, Berg Insight, December, 2018, http://www.berginsight.com/ReportPDF/ProductSheet/bi-micromobilitytelematics-ps.pdf, accessed on January 7, 2020.
- Shared Bikes and Scooters Could Replace Nearly 50 Percent of Downtown Vehicle Trips, INRIX Research, September 9, 2019, http://inrix.com/press-releases/micromobility-study-us-2019/, accessed on January 7, 2020.
- Regina, Clewlow, “The Micro-Mobility Revolution,” Populus, July 24, 2018, https://medium.com/populus-ai/the-micro-mobility-revolution-95e396db3754, accessed on January 7, 2020.
- 2018 E-Scooter Findings Report, Portland Bureau of Transportation, 2018, https://www.portlandoregon.gov/transportation/article/709719, accessed on January 6, 2020.
- Joseph Hollingsworth, et al., “Are E-Scooters Polluters? The Environmental Impacts of Shared Dockless Electric Scooters,” Environmental Research Letters, August 2, 2019, https://iopscience.iop.org/article/10.1088/1748-9326/ab2da8, accessed on January 7, 2020.
- Angie Schmitt, “The Rise of the North American Protected Bike Lane,” Momentum Mag, July 31, 2013, https://momentummag.com/the-rise-of-the-north-american-protected-bike-lane/, accessed on January 7, 2020.