Don’t Scoot Yourself Out of Insurance Coverage

Fleets of dockless electric scooters made by companies such as Bird and Lime have sprouted up in a number of urban areas throughout the country. Bird advertises on their website that they now offer their service in over 100 cities and universities, while Lime offers similar services in over 70 cities. [1,2] For as little as 15 cents per minute, individuals can ride these modern-day electric ponies at speeds up to 15 miles an hour as they go to and from their office or simply sightsee.

As you can imagine, this has led to some unintended issues. For starters, one hospital emergency room has already reported a 161% increase in visits involving electric scooters. [3]

Another issue, which most people probably haven’t considered, is that there isn’t insurance coverage included for this exposure as part of a typical home and auto insurance program.

This might come as a shock to you, especially to those of you who have rented cars while on vacation and have been assured that your personal auto policy covers the rental. The difference? Almost every auto insurance policy in the marketplace has an exclusion in it for liability coverage for the ownership, maintenance, or use of any vehicle which has fewer than four wheels. Therefore if you rent a scooter and cause bodily injury and/or property damage as a result of the rental, your auto policy will not provide coverage.

Similarly, typical homeowner policies have motor vehicle exclusions in them. Specifically, the policy won’t treat the rented scooter as covered property in the event you wreck it. In addition, the personal liability section of the policy will exclude coverage for the use of motor vehicles, which is usually defined as a “self-propelled land or amphibious vehicle.”

Two months ago, my blog post focused on the sharing economy and some insurance-related challenges that have resulted from it. In that piece I warned against individuals renting out their homes and cars; this situation is the reverse but the same caution should be exercised. Just because homes, cars, or in this case electric scooters are available for rental, don’t make the assumption that your insurance program will adequately protect you!

Resources:

[1] Bird. Retrieved from https://www.bird.co/

[2]That’s a Fast Rise for the Los Angeles-based Company. “The Product Is Banned in Some Cities. The Company Is Valued at $2 Billion.” CNNMoney. Retrieved from https://money.cnn.com/2018/07/09/technology/bird-valuation/index.html

[3] “Hospital ER Reports 161 Percent Spike in Visits Involving Electric Scooters.” The Washington Post. September 24, 2018. Retrieved from https://www.washingtonpost.com/technology/2018/09/24/hospital-er-reports-percent-spike-visits-involving-e-scooters/

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