Insurance and Electric Scooters

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PIA CONNECTION NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS

Insurance and Electric Scooters page 10-11

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PIA LEGAL ANALYSIS

By Lauren G. Pachman, Esq.

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INSURANCE AND ELECTRIC SCOOTERS

NEW METHODS OF TRANSportation are popping up all over to solve problems most of us didn’t realize we had. Need to travel a few blocks, but there’s no applicable bus route? Want to get some fresh air, but the route is a little too long to comfortably walk? You may be the perfect potential customer for a company that rents dockless electric scooters by the minute to people in cities around the country.

With electric scooters, we are at the very beginning of a phenomenon that is taking off fast—and for which questions of regulation, liability and insurance are unclear.

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WHAT IS AN ELECTRIC SCOOTER? Electric scooters are boards that come equipped with two wheels, a floorboard, handlebars, and an electric motor. Scooter companies have begun to drop their products—sometimes unannounced—into cities all over the country, and the scooters are rapidly gaining in popularity. Part of the appeal of these scooters is, no doubt, the “dockless” feature. Because they don’t need to be docked, a rider doesn’t need to return the scooter to a specific place. Users just download an app to their smartphones, and the app will use the customer’s location to identify the nearest available scooter.

Users unlock the nearest scooter using the app. They ride the scooter to their destination and then leave it there.

WHAT ARE THE RULES OF THE ROAD? Many cities don’t regulate these “vehicles” because they don’t qualify as motor vehicles (typically identified as having four wheels) or bicycles, leaving the companies in a regulatory purgatory, and leaving users fending for themselves when it comes to following the rules—or even knowing what rules, if any, need to be followed.1 1 https://www.pewtrusts.org/en/researchand-analysis/blogs/stateline/2018/11/13/ electric-scooters-have-been-burned-buried-and-

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Existing traffic safety regulations, it seems, are inadequate to the task of reining in scooter users.2 Scooter users are supposed to be 18 years of age, have a drivers’ license, ride alone, and wear a helmet, but those requirements are subject only to the honor system. Even though the street corners and sidewalks in many cities are littered with abandoned scooters, the sight of a scooter rider wearing a helmet is indeed rare.

Another source of danger is the enormous impact of hundreds of scooters abandoned all over a city.

Because electric scooters are dockless, they don’t have a place where they “belong” when not in use. Scooter companies require people to leave scooters in areas permitted by state and local law, but laws can vary greatly by location. As a result, scooter riders are likely to, upon finishing a ride, leave their scooter anywhere, and they do. Scooters are often found blocking sidewalks, impeding movement through ramp cutouts intended for people in wheelchairs or with strollers, or in other unsafe conditions. In fact, a class-action lawsuit has already been filed in California alleging that the scooters being left in ramp cutouts is a violation of the Americans With Disabilities Act because it results in an obstruction of public sidewalks.

HOW ARE RIDERS INSURED? The quick proliferation of scooters has left insurance companies scrambling to figure out which company, if any, is on the hook when scooters cause injuries or property damage. Scooter users who are themselves injured in a crash are likely

to have their own injuries covered by their health insurance company, if they have health insurance. Or their injuries could be covered by workers’ compensation, if they were riding the scooter in the course of their employment.

When someone riding a scooter injures a pedestrian, damages a bystander’s property, or causes a car accident, coverage may be harder to come by. The rider may be liable for those losses, even if they themselves are seriously injured as well. Those losses could include property damage to another vehicle, as well as damages for medical injuries, lost wages, and pain and suffering experienced by other people.

Preliminary evidence shows that scooters can be dangerous to riders; the Washington Post interviewed emergency room doctors in cities where dockless scooters were widely available, and all the physicians reported an increase in the number of injuries they saw after the scooters were introduced.3 Consumer Reports has reached similar conclusions, but no comprehensive studies have been completed on the issue to date.

Right now, most insurance companies won’t cover scooter crashes as a matter of course. Auto insurance won’t cover scooter accidents because the driver was not operating or riding in a vehicle. Homeowners’ or renters’ insurance won’t cover scooter accidents because those policies don’t usually cover motorized bike- or scooter-related losses.

DO SCOOTER COMPANIES OFFER INSURANCE? The biggest scooter companies in the United States right now are Bird and

butchered-theyre-about-to-be-regulated 2 https://www.iii.org/article/spotlight-on-escooters-and-insurance?utm_source=I.I.I.+Da ily+Newsletter&utm_campaign=4c15958e51EMAIL_CAMPAIGN_2019_06_26_01_22_ COPY_05&utm_medium=email&utm_ term=0_092139a76a-4c15958e51-122044149

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3 https://www.iii.org/article/spotlight-on-escooters-and-insurance?utm_source=I.I.I.+Da ily+Newsletter&utm_campaign=4c15958e51EMAIL_CAMPAIGN_2019_06_26_01_22_ COPY_05&utm_medium=email&utm_ term=0_092139a76a-4c15958e51-122044149

Lime, and, before their customers can use their products, they are required to sign an agreement that the user bears responsibility for liability arising from the user’s ride. The agreement shifts the liability burden off the companies before the ride even begins.

Bird insures riders for losses resulting from faulty Bird scooters. Lime is even less committal, offering $1 million in liability coverage for “covered claims,” but noting that every claim is different, and no claim can be deemed covered before a complete investigation is conducted.

Despite these reassurances, most experts agree that riders are most likely to bear responsibility for claims arising from scooter rides because of the terms and conditions to which riders agree when they download the app.

Similar court cases usually provide guidance in situations where insurance coverage is unclear, but shared-ride electric scooters are so new that there’s nary a court case on which to base a claim of coverage—or a denial of coverage.

Scooter devotees are advised to call an insurance agent to find out whether they have access to an umbrella policy that could be added to an existing policy and that could cover a wider array of potential loss situations and include higher policy limits than their homeowners’ or renters’ policy otherwise would.

According to the National Association of City Transportation Officials, over 38 million shared electric scooter rides were taken last year.4 That number seems likely to grow, and the insurance and regulatory questions around this issue are likely to increase as well.

Lauren G. Pachman, Esq. is counsel and director of regulatory affairs of PIA National.

4 https://apnews.com/914b9cac22b34ecd983863 425af84496

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