Insurance and liability risks in the emerging e-bike market

E-bike riders are more than three times more likely to have a collision with a pedestrian than traditional scooters or bicycles. Injuries resulting from collisions with an e-bike may be more serious due to the weight and speed of the e-bike at the time of impact; unlike the impact of a conventional bicycle. (Credit: Michael Marciano/ALM)

The summer of 2022 saw record highs, and not just in weather reports. Commuters in the United States have seen gasoline prices soar to unprecedented levels, although there has been some relief lately. High gas prices and global inflation have forced commuters to look for other means of transportation. For some, cycling to work, using public transport and driving electric vehicles have become the new norm.

Along with this trend, e-bike manufacturers have seen an increase in sales. Electric bikes, or “e-bikes”, are an increasingly popular way to get from point A to point B, as long as they’re not too far away. According to the Light Electric Vehicle Association, the United States imported nearly 450,000 e-bikes in 2020. In 2021, imports were close to 790,000 and this year could set a new sales record.

E-bikes appeal to cyclists because they cost much less than electric cars, making them more accessible to the general population, especially workers who live within 35 miles of work and don’t need a car. ‘reach over 28 mph, the top speed. . Additionally, e-bike users are not required to refuel at the pump or take out mandatory insurance policies.

Choosing to ride an e-bike, whether as your primary mode of transportation or for visiting the local taqueria, has health and financial benefits, especially if the motor works in tandem with the pedals. They also have their drawbacks, like everything else. They are not intended for highway driving, have little to no storage space, and would not do well in the Minnesota winter. They pose certain safety risks: no airbags, greater exposure to injuries from reckless drivers and, as the “bi” prefix suggests, they only have two wheels, which makes them more vulnerable at the falls.

Saving a few dollars at the pump can potentially expose e-bikers to greater financial liability if they are found to be uninsured or underinsured in e-bike collisions. A report found that e-bike riders are more than three times more likely to have a collision with a pedestrian than traditional scooters or bicycles. Some of the most serious injuries suffered from e-bikes and pedestrian accidents include broken bones, broken bones, and head injuries. Injuries resulting from collisions with an e-bike may be more serious due to the weight and speed of the e-bike at the time of impact; unlike the impact of a conventional bicycle.

E-bike users may want to purchase specialized insurance policies, although maintaining e-bike insurance is not mandatory. When there are injuries, someone has to pay. Injured parties will seek redress from parties alleged to be responsible. Where better to start than with the owner or the driver?

Neither fish nor poultry

E-bikes dwell in a murky part of the insurance pond, neither fish nor fowl, but sharing some risk management characteristics with their pedal-only relatives and motor-powered neighbors. They ride on public roads like Schwinns and Harleys, but don’t need a driver’s license, special training or proof of insurance.

Several insurers offer coverage packages specifically for e-bike owners. This market will grow as e-bikes continue to grow in popularity. But with more e-bikes on predominantly urban roads, property damage and injury claims will become more common and serious.

Extended property insurance policies, such as homeowners, renters, and automobile coverage, are generally silent on e-bikes, but are often excluded because they are considered motor vehicles: “A motor vehicle or self-propelled amphibious”. Owners should ask their insurers or agents if e-bikes are covered, or better yet, purchase stand-alone e-bike coverage, especially if they use their e-bikes regularly or in a business. Buying an electric bike is often a bigger investment than a pedal bike. An entry-level bike can cost upwards of $1,000. A top-of-the-line model can cost up to $12,000, with the average costing around $3,000. Full replacement coverage and loaner coverage will be needed to get the driver back on the road sooner after a theft or accident than starting from scratch.

Liability cover for e-bikes can be essential but is not yet mandatory. As with automobiles, it’s hard to know how much your liability insurance limits are. The standard “15-30” auto policy can be woefully inadequate in the event of a serious injury accident. The same goes for e-bikes.

According to a Consumer Product Safety Commission survey conducted from 2000 to 2017, e-bike riders were found to be more prone to internal injuries and requiring hospitalization than pedal cyclists.

We have litigated traditional bicycle accident cases in which no permanent personal injury was sustained. This is an unscientific estimate, but settlements of $50,000 to $100,000 are not uncommon. Indeed, bodily harm can be aggravated by loss of wages, continued physical therapy, and pain control. In serious accidents, such as those resulting in death or loss of limb, the damage may be the same as if the same injuries were sustained in a car accident.

The Centers for Disease Control and Prevention reports: “The costs of bicycle injuries and fatalities from crashes typically exceed $23 billion in the United States each year” and “Nearly 1,000 cyclists die and more than 130,000 are injured. injured in accidents that occur on the roads of the United States every year. These figures include traditional bicycles as well as electric bicycles.

What liability insurance should you have on your e-bike? Try dividing $23 billion by 130,000. That’s a scary number, but keep in mind that truly catastrophic cases skew the average upwards.

What’s over there?

There is no standard policy for e-bike insurance, but several insurers offer stand-alone coverage for e-bikes with varying features. While writing this article, we compared three insurance products, offered by Markel, Spoke and Velosurance. There may be others on the market or about to be launched. In mentioning the three providers, we are not endorsing them, only noting that they offer e-bike insurance.

In general, stand-alone e-bike insurance policies provide coverage for physical damage or theft of property, subject to policy limits. There may also be deductibles that shift certain repair or replacement costs, and sub-limits for medical payments on behalf of the owner/rider may be included. Some policies automatically include liability insurance, others add such coverage for a higher premium.

There are other types of insurance that can defer losses or provide services such as:

  • Electric bike rental reimbursement
  • Damage during transport of the e-bike when not in use
  • Roadside assistance
  • Replacement of spare parts
  • Cycling clothing

Some insurers have annual premiums starting at $100.

No policy that we know of provides full coverage for all possible accidents on and off the road. Owners should discuss with their insurers or insurance brokers when excess coverage – limits above the primary policy – ​​is available, or if the owner’s umbrella insurance policy may include e-bike perils among the protections provided by these fonts.

Safe cyclists know that bicycle helmets reduce the risk of serious head injuries and that safety clothing protects limbs better against road abrasions than t-shirts and cuts. Owners should consider e-bike insurance as similar protection for their gear and wallet.

Louie Castoria is a partner at Kaufman, Dolowich & Voluck, LLP, a national law firm, president emeritus of the Insurance Educational Association, and adjunct professor of law at Golden Gate University.

Berlinie St-Fort is a partner in the same firm. Both are based in the company’s offices in the San Francisco Bay Area.

This article does not necessarily reflect the views of the law firm or law school.