E-scooter rentals reshape urban micromobility (part two)

February 24, 2020 / 4 min read

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.

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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.

Outstanding questions

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.