The ownership and use of E-bikes has become increasingly important of late. The National Transportation Safety Board (NTSB) reported more than 900,000 electric bicycles were sold in the US in 2021 alone, almost double the number of sales from 2020. This puts E-bikes on track to outstrip the number of electric car sales in the US. Who better to hear from on this subject than expert JS contributor, David Thompson, AAI, CPCU, CRIS. Enjoy!

By David Thompson, AAI, CPCU, CRIS

Fortune Magazine quoted a trauma surgeon as saying, “The vehicle is heavier. I consider it a vehicle. Generally, E-bikes weigh between 50 and 80 pounds. The patients are ejected at higher speed, but unlike most motorcycles, they’re not wearing protective equipment. There’s (often) no helmet law for them.”

My “non-scientific research” is that while I ride my bike (a “regular” Trek bike, not an E-bike) is that around 25 percent of the riders I see on my daily rides are occupying some type of E-bike. As I drive my morning route through town most mornings for breakfast at a local bagel shop, I see many school-age kids riding their E-bikes to school. I’m shocked by the speeds that they are riding at. On my Trek bike, I average about 11 miles-per-hour (mph), or maybe 12 mph on a good day. The more serious bikers that I often see riding with perhaps a dozen other riders tell me they average 15–18 mph. By contrast, I have rented a “pedal-assist bike” (more on that later) and my speed on that bike hit over 18 mph at times. Trek recently introduced an e-bike that will hit speeds of up to 28 mph.

While these E-bikes can be called by different names, I’ll group them into two basic categories:

Pedal-assist: With these bikes the simple explanation is, “If you don’t pedal, they don’t move.” As such, in my view, they are not “motor vehicles” as described in many insurance policies, meaning coverage is very broad. I have rented these pedal-assist bikes several times in the last couple of years. They are great because they allow you to cover a lot of ground without feeling wiped out. On one rental, I covered a bit over 35 miles that included some rolling hills without feeling like I would have had I been on my Trek bike. They assist you in making the ride an easier ride.
Full-throttle: These bikes have multiple ways to be used. They are heavier than a “regular” bike. For example, my neighbor owns one and it weighs 72 pounds; my Trek weighs in at 28 pounds as is sits in the bike shop. They can be pedaled like a regular bike, but that’s a lot of work, or they can be operated in a pedal-assist mode to make the ride easier. Then, in “full-throttle” mode they are totally self-propelled…just like a motorcycle as I previously mentioned.

Consider the question of, “How many people think of the insurance implications of owning or renting one of these e-bikes?” Other than Insurance Nerds, I suspect very few do. That leads us to the question of how insurance works. Remember, each policy is different, and the facts of each situation are different, so it’s critical to have the facts and read the specific policy in question. That said, what follows is a brief analysis of standard ISO (Insurance Services Offices) policies.

Homeowners Insurance Policy

Critical to determining coverage, if any, is whether the e-bike is a “motor vehicle” as defined in the policy. From the ISO 1984 program through the ISO 2011 program a “motor vehicle” was defined as a “self-propelled land or amphibious vehicle.” That would include vehicles such as automobiles, golf carts, go-carts, Segway’s, motorized scooters, riding lawnmowers, and more.

Since a pure pedal-assist bike is not self-propelled, it is not a “motor vehicle” as defined in the policy, and any exclusion relating to “motor vehicles” would not apply. Thus, the bike itself would be covered up to the Coverage C limit, and liability coverage would apply on a worldwide basis.

With a full-throttle bike, coverage would depend on how the bike was being propelled at the time of the accident. In both a pure pedal mode and a pedal-assist mode, coverage would apply as outlined above for a pedal-assist bike. If the bike, however, happened to be in full-throttle mode the coverage analysis is very different. In that mode of use, the bike would be a “motor vehicle” as defined in the policy. As such, the bike itself would not be covered and liability coverage would also be excluded. As is evident, an accident involving a full-throttle bike is ripe for controversy, depending on the mode of use when looking for coverage under a homeowners policy.

There is always a “however” in insurance issues, and a new however involves a revised definition of “motor vehicle” in the ISO 2022 homeowners program. That definition is, “A land or amphibious vehicle that is self-propelled or capable of being self-propelled.” In the case of my neighbor, his full-throttle bike is a “motor vehicle” under the current ISO homeowners program because it can be operated without having to be pedaled; that’s why I often ask him, “How far did you ride your motorcycle today?” Using his bike as an example, the bike itself isn’t covered; the Trek website lists several full-throttle bikes at prices of up to $6,000. Liability coverage is also excluded since his bike is capable of being self-propelled.

Personal Automobile Policy

Looking first at a pedal-assist bike, since this type of bike is not a “motor vehicle,” coverage under a personal auto policy would apply just as if the rider were on a “regular” bike or happened to be a pedestrian.

Personal injury protection would apply inside Florida if the occupant were struck by a motor vehicle with four or more wheels that was licensed or required to be licensed for road use.

Medical payments coverage would apply in a similar manner, except that coverage would apply if struck by a motor vehicle, even one with less than four wheels…such as a motorcycle. This coverage would apply outside of Florida anywhere in the policy territory.

Uninsured motorist coverage, whether written stacked or non-stacked, would apply if the occupant were struck by a “land motor vehicle” that fit the statutory definition of “uninsured motor vehicle.” A recent court case I read actually found coverage when someone was injured by a four-wheeler because it was a land motor vehicle. The fact that it was not required to be registered or insured was not a factor according to the court.

Physical damage coverage would not apply since the bike is really a “motor vehicle” and it would not be listed on the declarations page of the policy.

Liability coverage, the most important coverage in my view, would not apply because the “motor vehicle” has less than four wheels.

Coverage Summary

As is evident, coverage for the use of these E-bikes (regardless of the specific type) is questionable at best. Each situation is different, and each policy is different. That’s why I say that customer’s policies, “often don’t work very well.” This is also why, when I rented the E-bikes, I made certain I was renting a bike that did not have a full-throttle mode. I actually called the shop well in advance of my first rental to learn what type bike I was going to rent. (Also, believe it or not…I have actually read my auto and homeowners policy!) I’ll never rent a full-throttle bike, just like I won’t rent a wave runner…solely because of the lack of liability insurance to protect me.

The Solution

My advice here is the same advice that I give to residents of the homeowners association where I live who own golf carts: “If you can afford the golf cart, you can afford the insurance.” Anyone who can afford to pay well over $1,500 for a bike should be able to afford to have proper insurance coverage. I learned that Markel Specialty provides insurance specifically designed for all types of bikes and E-bikes. (There are likely other insurers too.) I obtained a quote for a $6,000 Trek full-throttle bike with $300,000 of liability insurance. The physical damage coverage (based on my demographic data) was $479 per year, while the liability coverage was only $150 per year. That totals up to $629 per year. But, I have a friend and agent who would not tell the customer, “It’s $629 per year.” He would say, “It’s only $1.72 a day and you can’t buy anything for that amount of money at Starbucks.” With a less expensive bike and/or having no desire to insure the bike itself, the liability insurance “is only 41 cents per day.”

The Takeaway

E-bikes are exploding in popularity, and few people think about the insurance implications until after the loss has taken place.
It’s important to know what type of bike is being purchased, rented, or borrowed.
Buy a specialty insurance policy to cover E-bikes and don’t rely on a homeowners policy or personal auto policy.

How about you, do you own, rent, or borrow E-bikes?

Oh yeah, look at the photo of me and the E-bike owned by my neighbor. Of course I did not ride it because it’s a “full throttle” bike and my insurance policies would not cover me had I ridden it! He said, “Tell them that I was T-boned in Central Park in NYC by a conventional biker and if I had not been on this bike, I’d have been in the hospital ICU unit.” I have some great neighbors!!

PS: You can always contact me directly at DavidThompsonInsurance@gmail.com

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