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You may not know the term micro-mobility, but you’ll know the types of transportation that fall under the term: Small, lightweight vehicles that don’t go very fast, like bikes, e-bikes, skateboards and electric scooters. The real question is: Will micro-mobility eliminate your need for auto insurance?
It might, says Paul Strobel.
He used to commute to work like everyone else. On some days, he would drive to work in Sacramento, California. On other days, he would take light rail.
“I’ve completely transformed my ways of commuting in the city,” he says. “I own a handful of electric scooters and use them every day. The main benefits are that you don’t have to follow the public transport schedules. You can simply go as you wish. During rush hour, it’s a huge relief as well, as traffic flows more smoothly in the bike lanes. So I can practically get where I want without any delays.”
Strobel, an environmental engineer who publishes ERideHero, a news site about micro-mobility, says other commuters are catching up to him.
Combine micro-mobility with ridesharing and mass transit, and it could eliminate the need for personal cars among many people. But will it eliminate the need for insurance coverage?
That’s not a theoretical question. Boston Consulting Group estimates that the global market for e-scooters will reach somewhere between $40 billion to $50 billion by 2025. That’s a lot of scooters.
So what kind of insurance do you need if you’re pursuing a micro-mobile lifestyle?
If You Give Up Your Car, Do You Still Need Auto Insurance?
With all these ways of getting around, is auto insurance obsolete?
Not for everyone. Drivers who have had a bumpy road with their driving record may be required by their state to show “proof of responsibility,” often known as SR-22 insurance. Even if you’ve given up your car, you may have to keep auto insurance for an SR-22. Non-owner car insurance is a way to do this.
What Kind of Insurance Do You Need for Micro-Mobility?
Strobel, the environmental engineer, has pondered the question of insurance and micro-mobility. He hasn’t given up his car yet, so he still needs auto insurance.
For anyone using a micro-mobility device like a skateboard, e-bike or scooter, health insurance will generally cover your injuries if you crash. If someone else crashes into you, you can potentially sue them (and get a payout from their liability insurance) for injuries and damage to your micro-mobile.
Buying additional coverage for your small transportation probably isn’t worth it. “The product quality isn’t at a good enough level yet,” says Strobel. “Most of the e-scooters you see around in the city have a surprisingly low lifespan.”
The insurance question for micro-mobility devices is largely unresolved. A scooter rental company like Lime, for example, deals with the liability issue by requiring customers to sign an agreement that limits its liability.
“Micro-mobility presents operators, and their fellow sidewalk and road users, with new risks,” says Stan Caldwell, executive director of the Traffic21 Institute at Carnegie Mellon University. “And wherever there is risk, insurance will find a market.”
The Real Problem
The problem isn’t replacing a damaged scooter. It’s that riding a skateboard or e-bike to work has other risks. For example, the death rate on e-scooters is about one per 10.75 million trips, according to an estimate by the micro-mobility blog StreetsBlogUSA. For riders doing bike sharing, it’s just one per 61.5 million trips.
“The real problem that goes unrealized by many consumers is the risk associated with the scooter rentals,” says Jeff Zander, CEO of Zander Insurance. “The operation of these vehicles is often excluded by auto policies, since they do not meet the definition of an auto within the policy.” Your homeowners insurance will likely cover liability issues only on your own property. Once you scooter off, the liability coverage ends.
If you’re renting a scooter, the rental company may have coverage to protect the damage to their scooter and liability to protect them. But if you operate one of these and cause property damage or bodily injury to another person, you could be on the hook for all associated costs.
“In most cases, people are wiping out and hurting themselves,” says Zander. “But if they run into another person and cause injury or damage their property, then the liability falls on the operator.”
Coverage for this type of transportation can be hard to find, but Nationwide, for example, offers scooter insurance. Markel Specialty and Velosurance offer e-bike insurance.
Options Down the Road
There may be a future with more insurance options for scooter and e-bike riders, or perhaps even mandatory coverage. That’s the assessment of Michael Burtov, an MIT instructor and CEO of the mico-mobility company Geo Orbital.
“More and more cities are discussing mandating insurance for riders of such devices,” he says. “Mandating insurance is a source of revenue and protection for the local government and for private property and pedestrians. In all likelihood, as things like scooters become more popular, they will also require insurance coverage—which might be quite pricey.”