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Do You Need Liability Insurance for an Electric Scooter?

Dock-free electric scooters, known as e-scooters, have emerged as a popular form of transportation among the sidewalks of big metropolises, such as San Francisco, Los Angeles, Austin and Seattle.

For many, e-scooters are a long-awaited answer to the many challenges that mobile citizens face daily in big cities: limited parking, increasing gas prices, congested streets, and pollution, to name a few. But others aren’t as optimistic about the growing trend.

E-scooter-related accidents, including crashing into pedestrians and riders getting hit by cars are on the rise, creating heightened concerns about safety.

All of this begs the question, “What about liability insurance?”

Most insurance carriers offer coverage for scooters under their motorcycle insurance policies and it normally covers bodily injury and property damage liability. Each state has its own rules about what coverage is needed so it’s best to check with a local insurance agent about the laws where you live. Some states do not 

Premiums vary depending on the average motor vehicle insurance coverage costs in your area but you can expect basic policies to start around $100 per year. 

According to a McGee, Lerer & Associates blog post, some of the potential causes of accidents are:

  • Children operating the scooter
  • Tandem riding
  • Failure to use a helmet while riding
  • Riding the scooter on a sidewalk
  • Road hazards
  • Dangerous driving

Major cities are quickly introducing permit regulation programs designed to force e-scooter companies to be more responsible. Designated parking areas to reduce tripping hazards for pedestrians. Fines and citations for riding e-scooters riding without a helmet. But will this type of prevention tactics work?

Ridesharing leader Uber and Tech Giant Alphabet recently invested in one of the three leading scooter-startups called Lime.

Bird, another leading e-scooter company, just celebrated its one-year anniversary with availability in over 100 cities. In a letter to the community, Bird founder and CEO Travis VanderZanden says its environmentally-friendly scooters help, “countless people and cities all over the globe start the transformation of urban transportation into one that is clean, convenient, and affordable.”

How much is liability insurance for a scooter?

The average insurance policy for an electric scooter or electric small vehicle used on the road can vary. However, you can expect to pay less depending on the insurance policy you prefer. If you only want basic coverage you can expect to pay around $295 or more a year. If you wanted full coverage, it can get into the $1,800 to $2,200 range a year.

How scooter rentals work

Ride sharing or rental companies offer users the ability to rent e-scooters throughout the city. For a marginal fee ranging between 15 cents to $1 per minute, users can travel throughout a designated urban geography, traveling up to 15 mph. Users activate a vacated e-scooter via the company’s app and when they’ve reached their destination, the e-scooter is left on the sidewalk for another user to rent.

To give an idea of its unusually rapid growth, Bird rented out 1,600 e-scooters in San Francisco and gave over 95,000 rides to 32,000 different users in the first month. In cities like Santa Monica, where the public transportation is limited, Lime says it has served over 180,000 unique riders since its inception in April 2018.

Managing risk and liability with a scooter rental

Until regulations are systematically established and enforced, e-scooter riders should consider their options when it comes to protecting themselves.

While e-scooter rental companies require a driver’s license for each user, according to the DMV in many states including California, an e- scooter does not require registration. That means that riders are not required to obtain a special license nor to have liability insurance.

Conversely, e-scooter rental companies have liability insurance. But it doesn’t mean the company renting out the e-scooter covers users under their policy. Most rental agreements containing language that users agree to ride at their own risk which means if you get injured in an accident, you won’t be covered under the rental company’s plan. And don’t count on being covered under your existing homeowner’s insurance plan; most stipulate that motor vehicles aren’t covered. Standard auto policies cover motor vehicles except most exclude liability coverage for vehicles with less than four wheels.

This may change soon. San Francisco’s new permitting process requires the rental companies like Bird and Lime to provide adequate insurance for each user. Other major cities are certain to follow San Francisco’s lead. Some cities, like El Segundo, recently withdrew permits when the rental companies pushed back on new requirements that would shift more liability from the city to the private companies.

How to protect yourself on a scooter

Until the e-scooter situation is sorted out, legal professionals recommend protecting yourself both as a user and as a pedestrian.

Before renting an e-scooter, users should:

  1. Find out what your existing homeowner’s and automobile policies cover before renting an e-scooter.
  2. Read carefully any waivers or agreements the rental company asks you to sign and make sure you understand what you are signing.
  3. If you don’t have coverage and ride an e-scooter, consider purchasing a liability policy. Inexpensive policies start at $75-$100 a year and are offered under an insurer’s motorcycle insurance policy. 

If you are a pedestrian and get into an accident, do the following:

  1. Take a photo of the e-scooter user’s driver’s license.
  2. If you get into an accident, ask for witnesses to provide their contact information.
  3. Take videos or pictures at the scene.

When you need the proper protection for insurance coverage, iQ can help you determine which insurance policy is right for you.

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