Shifting gears for e-bike insurance coverage: Shelf wheels continue to spin

June 23, 2022 – Can electric bicycles bring car and home coverage closer? With rising gas prices, more and more people are turning to electric bicycles as an alternative to cars. On January 21, 2022, Bloomberg reported that consumers in the United States purchased more electric bicycles (nearly 790,000) than electric vehicles (652,000) in 2021. “America’s best-selling electric vehicles ride two wheels , “Bloomberg.com)

Electric bicycles, or electronic bicycles for short, are bicycles equipped with a motor. The motor of an electronic bicycle is usually powered by batteries and helps the rider to turn the pedals. Motor-assisted speeds are usually limited to 20 mph, but some e-bikes can reach 28 mph before the motor is stopped.

The types of electronic bicycles vary. Some have to pedal to activate the engine, while others have throttle motors that drive the engine without pedals. Some have both.

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Unlike motorcycles, electronic bicycles are like ordinary bicycles because they can be pedaled and may not be subject to mandatory licensing or insurance. Because they look like ordinary bicycles, cyclists naturally tend to ride their electronic bicycles wherever they would ride an ordinary bicycle, including sidewalks and sidewalks.

While 20 mph may not seem very fast, an electronic bike hitting a pedestrian at 20 mph would give more power than a professional boxer’s kick. This means that accidents between e-bikes and pedestrians can cause serious injuries (and serious liability).

Although there is electric bike insurance, to put it mildly, not every electric bike owner has an electric bike policy. If you collide with someone while riding an e-bike, or you are unlucky enough to be hit by one, what insurance would cover the obligations caused by the collision?

Although state vehicle legislation may require drivers to have minimum motor insurance, state coverage may not apply to electronic bicycles.

For example, Section 324.01 of the Florida Bylaws defines a “motor vehicle” as not including a “bicycle, electric bicycle, or moped.” In the unpublished 2006 case of the Florida court, Geico Gen. Ins. Co. v. Schwinn, the Court ruled that a dirty bicycle and an ATV are not ‘motor vehicles’ and do not require minimum motor third party liability insurance.

If we apply the same logic, owners of e-bikes are probably not obliged to insure liabilities arising from their e-bikes.

Think about it:

Sally has no e-bike insurance. Sally still rides her e-bike on an empty sidewalk. As she turns a corner, Sally runs over a pedestrian she hasn’t seen, causing serious injuries.

She wonders if her home or car policy can cover the pedestrian’s medical bills. If not, Sally could face serious financial problems.

Personal insurance policies, such as car and homeowners, cover certain accidents that cause personal injury. However, depending on their wording, car and homeowners’ liability insurance may not cover e-bike collisions.

Automotive policy coverage for four-wheeled vehicles

Sally may seek her car policy to cover liability, thinking that a motorized bicycle is similar to a motor vehicle. Car insurance usually covers certain car accidents involving the insured’s vehicle. Coverage for e-bike collisions is unlikely in car policies if the definitions and exceptions limit coverage to four-wheeled vehicles or owned vehicles that the policy lists as insured vehicles.

If Sally’s car policy covers certain damages resulting from an “insured vehicle” defined as a four-wheeled vehicle listed in the policy, there will be no coverage for the electronic bicycle. Her two-wheeled electronic bicycle is not listed as a covered vehicle in automotive policy.

In addition, Sally’s car policy may exclude coverage for accidents involving vehicles with less than four wheels. The courts imposed this type of exclusion to cover liability for two-wheeled vehicles. For example, the 1993 Louisiana Appeal Case. Gunn v. Automotive Cas. Ins. Co., applied the shutdown to vehicles with less than four wheels to turn off the coverage for a motorcycle accident.

The policy of “exclusion of motor vehicles” of homeowners

In contrast, homeowners’ insurance usually covers liability for accidents caused by the insured, whether at home or outside. Sally can assume that her homeowners’ policy covers obligations caused by the pedestrian accidentally hitting her electronic bicycle.

However, a common feature in homeowners’ policies is the almost universal exception to damage resulting from the use of a motor vehicle. Whether Sally’s electric bicycle can be a “motor vehicle” is determined first by the way it is defined in the policy.

If Sally’s homeowner policy defines a “motor vehicle” to include electric bicycles, then her electronic bicycle is a motor vehicle excluded. However, if ‘motor vehicle’ means ‘powered motor vehicle’, there may be coverage for the collision. Sally may argue that her e-bike is not completely self-propelled because she has to pedal it to activate the engine so that her e-bike does not fall under the definition of “motor vehicle”.

In the 1988 case of the 9th U.S. District Court of Appeal in Hawaii, Allstate Ins. Co. v. Pacheco, the court found that a moped without a pedal assistant was not a “motorized land vehicle” subject to the exclusion of motorized land vehicles in homeowners’ policies. As the policy does not define “motorized land vehicle”, the court turned to Webster’s dictionary, which defines “motorized” to mean “motor vehicle equipment” or “cars” or “to design or adapt … for direct operation , especially. from an electric motorcycle … “The court ruled that it was reasonable for the insured to expect coverage from homeowners for his moped, especially if Hawaiian law declared that the term” motor vehicle “did not include” mopeds “.

If Sally’s homeowners’ policy is silent on the definition of ‘motor vehicle’, specify specific laws defining ‘motor vehicle’ for different purposes, which may determine whether the exclusion of a motor vehicle will apply.

Given the growing popularity of electronic bicycles, many states have their own legal definition of “electric bicycle.”

States such as Arkansas, Indiana, Mississippi, Vermont and others have a status that states that the electric bicycle is not a motor vehicle, at least for registration and licensing purposes. Can these laws support an argument against the application of motor vehicle exclusion policy for homeowners? Unless the policy definition includes electronic bicycles, they could.

The coverage of liability for pedestrian injuries probably depends on whether Sally’s electronic bicycle qualifies as a “motor vehicle”, as defined in policies and under state law. If the electronic bicycle does not fall within the exclusion of the policy of homeowners for a “motor vehicle”, the insurer can indemnify the injured party up to the limits of liability.

As e-bikes become more popular (and cause more serious injuries), insurers are likely to respond by reviewing homeowners’ policies to exclude e-bikes more aggressively. For example, insurers could define a “motor vehicle” as “land or amphibious that is self-propelled or power-driven”, which would exclude most electronic bicycles.

If Sally had an e-bike policy with liability coverage, then the insurer is likely to cover the injuries and damage resulting from the collision. But if Sally expects her homeowners or car policy to cover e-bike obligations, she may be shocked.

Although there may be general trends in the way states assess e-bicycle coverage by homeowners and car insurance, the language of the policy and state laws differ and appear to be evolving. When a collision with an electric bicycle occurs, those who have not purchased electronic bicycle cover will have to reconsider their policies and hope for the best.

Erin Mindoro Ezra is a regular insurance coverage columnist for Reuters Legal News and Westlaw Today.

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, in accordance with the principles of trust, is committed to integrity, independence and freedom from bias. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.

Erin Mindoro Ezra

Erin Mindoro Ezra runs Berger Kahn’s South Orange County office in Lake Forest, California, focusing on insurance coverage and labor and employment. It represents and advises clients on insurance coverage issues, in particular liability insurance, and advises clients on wage and time disputes, investigations, discrimination, retaliation and other employment issues. It can be found at [email protected]

Mallory O. Yumol

Mallory O. Yumol is an associate of Berger Kahn and focuses on insurance coverage and sworn exams. She advises clients of insurance companies on personal coverage issues and conducts sworn examinations. It can be found at [email protected]

Brennan S. Lund

Brennan S. Lund is an associate (pending admission to the bar) at the firm in Lake Forest, focusing on insurance coverage and insurance litigation. He advises insurance companies on complex commercial and personal coverage issues. You can contact him at [email protected]

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