Lauri Boxer-Macomber Interviews Noyes, Hall and Allen Insurance VP on Insurance Issues Surrounding E-Bikes

KRZ Attorney Lauri Boxer-Macomber joined Bob O’Brien, the Vice President of Noyes, Hall and Allen Insurance, to discuss e-bikes and insurance. Lauri’s highly informative blog post on Bike Law USA can be found here. Read on for Lauri’s full interview with Bob.

 

Lauri:  Let’s start out with some background information on you.  I know you are an avid bicycle commuter and have been in the insurance industry for quite some time.  Tell me some more about why you ride and why you work in this field. 

Bob:  I consider myself a transportational cyclist. I try to bike, walk or take public transportation first, and drive only when there’s an overriding advantage to do so. I’ve been a bike commuter since 2008, year-round since 2010. I love the way it combines health and ecological benefits, and how it encourages me to shop local. I’ve been an insurance agent for 25 years. I really enjoy being part of the local community and helping people and businesses to protect their loved ones and things that bring them joy.

Lauri:  How about your experience with e-bikes?  Have you ever ridden one? Do you have any interest in acquiring one?

Bob:  I rode my first e-bike last winter in Cambridge, MA. It took a few minutes to get over the feeling that I was moving a lot faster than I should be for the work I was doing. I really liked it. My commute is only 6 miles one way, and I can handle the hills comfortably. If my commute was longer or hillier, I’d strongly consider buying an e-bike. As I get older, I think it could extend my years enjoying a transportational cycling lifestyle.

Lauri:  Okay, now on to the topic at hand.  Let’s start out with one of the most frequently asked questions: Are e-bike owners required to carry insurance under Maine’s new e-bike laws?

Bob:  No, so long if the bike truly is an e-bike, as defined by Maine law.  Some bikes with motors do not qualify as e-bikes. They may fall under the definition of motorcycles or mopeds, in which case insurance would be required by the State.

Regardless of whether coverage is required of e-bike owners, it is recommended that all e-bike owners consider the risks and responsibilities associated with owning an e-bike and the insurance protections that they may want in place in the event of a crash, collision or another unfortunate event.

Lauri:    If I am riding an e-bike and hit a pedestrian or another bike rider with that e-bike, will my automobile insurance, homeowner insurance, or rental insurance cover the losses caused by me?  Likewise, what if I damage property (e.g. dent a car or cause damage to someone else’s bike) with my e-bike?  Will there be coverage?

Bob:  Most automobile policies exclude liability coverage for the operation of a vehicle with fewer than four wheels.  So, most likely your automobile insurance would not offer coverage for the losses caused by you while on your e-bike.

Coverage, if any, might be available under your homeowners or rental insurance policy, if you had such a policy in place.  Most homeowners and rental insurance policies offer protection for their insureds for any bodily injuries or property damage caused by an insured while riding a regular bicycle (i.e. a non-motorized bike). However, these same policies generally exclude coverage for damage caused by an insured while operating a “motor vehicle.”

This begs the question: Is an e-bike a motor vehicle?  Many homeowners and rental insurance policies define “motor vehicle” as a “self-propelled land or amphibious vehicle.” Under Maine’s new e-bike laws, the answer could very well depend on whether a bike falls under the definition of e-bike and the class of e-bike you are riding at the time of a crash, collision or incident.

Under Maine’s new e-bike laws, a Class 2 e-bike appears to be a “self-propelled vehicle,” so under most standard homeowners and rental policies, there would not be coverage for the damages caused by you. However, if you were pedaling or riding a Class 2 e-bike unassisted at the time of a collision you may want to argue that it was not a “self-propelled” motor vehicle.

With respect to Class 1 & 3 e-bikes, there’s a stronger case to call them NOT self-propelled vehicles.  Still, depending on the bike, the insurance policy, and the circumstances surrounding an event, this will be left up for interpretation by insurance adjusters, attorneys, and ultimately the courts.

Lauri:  Several years ago, I wrote a piece about the importance of a bicyclist’s own automobile insurance in the event of a crash.  In that piece, among other things, I talk about how uninsured/underinsured motorist coverage (i.e. the coverage from a bicyclist’s own insurance) may be available in cases where a negligent driver does not have insurance or does not have enough insurance.  If I get hit while riding my e-bike, and the driver who hit me flees the scene, fails to carry insurance, or does not have enough insurance to cover my damages, will my own automobile uninsured motorist coverage or underinsured motorist insurance cover me? 

Bob:  Most standard automobile insurance policies exclude coverage to insureds for their damages when they are operating motor vehicles that are not explicitly listed as insured motor vehicles under their policies.

Most standard automobile policies do not define the term “motor vehicle,“ and most e-bike riders do not consider their e-bikes to be “motor vehicles” and, therefore, don’t purchase automobile insurance coverage for them or have their e-bikes described and listed on their insurance policies.  That said e-bikes do have motors, which could cause some carriers to deny coverage in the circumstances you describe above. On the other hand, if there was a legal dispute regarding policy interpretation, courts would have to decide. Would a court use the definition of “motor vehicle” found in Maine law, which makes it clear that e-bikes are not motor vehicles? If so, the court might find that the uninsured and underinsured coverage afforded to e-bike riders is the same as would be afforded to the riders of traditional bikes. For now, it’s unclear to me how insurers and courts will interpret Maine’s law.

Lauri:  As an attorney who regularly represents people involved in motor vehicle operator versus bicycle rider crashes, it has been my experience that most bicyclists will have access to medical payment coverage (“medpay coverage”) under their own automobile insurance, regardless of fault.   If I am riding my e-bike and am involved in a crash with a motor vehicle operator, will I have access to my medpay coverage?

Bob:  Most standard automobile policies exclude medpay coverage for injuries sustained while occupying a motorized vehicle having fewer than four wheels. As I discussed earlier when we touched on access to uninsured and underinsured coverage, there is uncertainty right now on how strictly the term “motor vehicle” will be interpreted in e-bike crashes and coverage questions.

Lauri:  Could a person get around the ambiguities about whether they are entitled to uninsured, underinsured and medical payments coverage under their own insurance policies by paying for additional coverage on their e-bike and getting it listed on an automobile policy?

Bob: Yes, but you might have to find a new insurance company or agent. Only a few insurers offer specific e-bike policies. Our independent agency represents more than a dozen insurers, and only one has an e-bike solution. Call your agent first. If they can’t help you, try another agent or check online. Just be careful: a lot of the e-bike policies have really low uninsured motorist limits.

Lauri:  Bike share programs, many of which offer e-bike options, are popping up all over the world.  One of the positive aspects of these programs is that more people are riding bikes, which helps to increase public attentiveness to bicycles on the roadways.  However, the “user agreements” for these e-bike share programs often contain releases, disclaimers, assumption of risk provisions and binding arbitration clauses, all of which appear to be designed to deny coverage by the bike share company and its parents and affiliates in the event of a crash, collision, or other tragedy.  Given these “user agreements,” do you have any thoughts on how people can protect themselves through personal insurance or other means?

Bob:  Honestly I don’t. Even the specific e-bike policies I’ve seen only cover the ones you own, not ones you use or rent. Before I used one of those shared e-bikes or scooters, I’d read the agreement and make sure I had some protection from the sharing network. For now, I limit myself to traditional bike shares. You’re covered when you use those just like your regular bikes.

Lauri: How can I make sure that I have property coverage for my e-bike so that I can replace it if I crash it on my own, it gets stolen, or I drive it into my garage because I forget it is on my roof rack?  Also, how do I confirm that I am purchasing replacement coverage (i.e. cost of replacing my e-bike) versus purchasing depreciated value coverage (i.e. value of property at the time it is damaged)?

Bob:  Most “off the shelf” homeowners and renter insurance policies pay depreciated value, not replacement value.  However, you can purchase a replacement cost option for most policies.

It is important to note that most “off the shelf” policies cover your belongings for sixteen “named perils.” Theft is a named peril. Collision is not. You can purchase “open perils” coverage on many policies. This covers damage unless it’s excluded. Collision is not excluded.   BUT, most standard homeowners and rental policies exclude coverage for damage to “motor vehicles.”  As discussed earlier, most standard homeowners and rental policies also define “motor vehicle” as a self-propelled land or amphibious vehicle.  Is your e-bike a motor vehicle? If not, it would most likely be covered under the policy.

Lauri:  If I have an umbrella policy, will it apply to any of the scenarios that we have already discussed in this interview?  

Umbrella policies provide no property coverage. They usually cover excess liability above your primary homeowners, rental and automobile insurance policies.

Some umbrella policies have the same exclusions and definitions as home and auto policies. Others do not. In addition to providing excess liability coverage, umbrellas with separate insuring agreements may also provide “first dollar” coverage for claims NOT covered by your auto or home policy.

Some insurers offer uninsured/underinsured motorist coverage on the personal umbrella policy. Depending on how that coverage form treats e-bikes, you MAY have UM coverage on your umbrella policy.

Lauri:  Are you aware of any insurance companies that specifically offer e-bike coverage?   

Bob:  There are a few companies out there, but purchasers are cautioned to make sure that they are getting the coverage that they want at a price that is fair.

SAFECO, one of the insurers that my company works with, does have an insurance product for e-bikes that provides up to $500,000 in liability coverage (i.e. coverage that protects you if you hurt someone else with your e-bike), $500,000 in UM/UIM coverage (i.e. the underinsured and underinsured coverage we discussed earlier) and will even write up to $25,000 in medpay coverage (i.e. the medical insurance that will be available to you for reasonable medical expenses incurred, regardless of fault).  However, right now, e-bike coverage is expensive in comparison to scooter coverage, which shows that the insurance industry has a way to go before e-bikes are normalized. But, at least there is a product out there right now that I would feel comfortable selling people.

Lauri:  Many people these days are giving up their cars and are relying solely on e-bikes, bikes, walking and public transportation to get around.  Are there companies that will offer these people the same types of protections available to people who carry automobile insurance (i.e. UM/UIM and medpay coverage) if they are involved in a collision that is not their fault?  What companies and products would you recommend?

Bob:  SAFECO is the only company I’m familiar with that I’d recommend. Because they offer up to $500,000 UM/UIM and $25,000 medical payments, I’m comfortable placing my clients with SAFECO.

Lauri:  Event organizers often debate whether to allow e-bikes at their rides, races and events.  Is there a specific type of insurance coverage that these organizers should ensure is in place before allowing e-bike riders at their events?  

Bob: Because insurance coverage for e-bikes is rare, organizations shouldn’t expect that riders are properly insured. If the rider has no insurance, the sponsoring organization could be open to liability for injuries or damages caused by the participant. Event organizers should check with their insurance agents to make sure the organization’s assets are protected.

Lauri:  What else?  Any other words of wisdom on e-bikes and insurance?

Bob:  In all cases, it’s best to check with your agent to see what kinds of insurance policies and coverage you have. Explain that you are an e-bike owner and that you’re concerned about insurance coverage. In all cases, your agent should be able to show you the wording in your policy that leads them to think you do or don’t have coverage, and why.

Lauri:  Thank you, Bob, and happy riding!