E-scooter drivers beware of unplanned claims

In July 2018, the first wave of electric scooters hit the streets of Cincinnati overnight. Soon after, the initially installed Bird scooters, owned by the Bird Rides company, were met with some competition by the Lime scooters owned by Neutron Holdings.

A throwback to our time spent riding Razor scooters as children, these vehicles provide a cheap and easy way to get around a city while reducing reliance on cars and easing congestion on public transit. On average, these scooters reach a top speed of 15 mph, and are made to be ridden in the bike lane.

To take a ride on one of these scooters, the rider needs to download the affiliated smart phone application and create a login. Then a map will appear to show nearby scooters. When the user is near enough to the scooter, they tap the button within the app to unlock the scooter. The app prompts the user to take a picture of the QR code on the scooter, and scan their driver’s license. Before a rider can jump on a scooter, they must agree to a contract that makes it clear they are responsible for any injury or damage they cause.

Scooter rental costs around $1 to unlock and riding costs run 15 cents per minute to $1 for 30 minutes of use. The e-scooters are “dockless,” so when riders are finished, they can park the scooters anywhere local ordinances permit. The Bird scooters have safety reminders on the footboard telling users that helmets are required, drivers must be over the age of 18, have a valid driver’s license, and are limited to riding one person at a time.

An active Bird user can acquire a free helmet through the Bird app; they just have to pay for shipping. Some state laws require scooter riders to wear helmets, while others like California, have abolished the helmet requirement for riders of stand-up scooters who are over the age of 18. Some cities have established their own e-scooter rules and regulations.

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Scooter dangers

E-scooters are associated with various injuries. A vehicle can hit a scooter driver, a pedestrian can be hit by an e-scooter, pedestrians can trip over abandoned e-scooters, an e-scooter driver can crash due to road hazards, or a malfunctioning scooter can cause a crash. If someone is injured in a scenario involving an e-scooter, the liability will likely fall to the negligent party. The scooter renter and the scooter company may both be liable for injuries caused by riders. The caveat, though, is that e-scooter riders are not required to carry liability insurance.

If an e-scooter driver causes an injury, the driver is responsible and their insurance policy may cover the claim. The company that rents a driver the e-scooter probably won’t cover that liability. Some cities require scooter companies to provide “adequate insurance” for each user. An individual’s coverage under a personal policy depends on the terms and conditions of the insurance policies in place. The standard auto policy excludes liability coverage for a vehicle with fewer than four wheels. Since e-scooters only have two wheels, damage that occurs due to the use of an e-scooter would typically not be covered under the driver’s personal auto policy.

The agreement users sign when they rent a scooter from Bird contains a warning statement that “your automotive insurance policies may not provide coverage for accidents involving damage to this vehicle.” The standard homeowner’s policy considers a motor vehicle to be any vehicle that is self-propelled, and does not provide coverage for damages associated with such vehicles. Homeowner’s policies are specifically written to cover a definitive array of risks, and do not cover damage done by a motor vehicle as sort of damage is more appropriately covered by an auto policy.

A personal liability umbrella policy might provide coverage, as an umbrella form is designed to provide protection over and above the limits of the underlying homeowners and auto policies. An umbrella policy may also cover risks or exposures that are typically excluded from other insurance policies. For example, an umbrella policy may not have an exclusion for vehicles with fewer than four wheels. An insured might be fortunate enough to discover that their personal liability umbrella policy covers damage he or she causes while riding on an e-scooter.

A lot of damage can result from an e-scooter traveling at 15 mph. There have been several incidents of recorded injury since e-scooters hit the streets. In Cincinnati, a pedestrian went to urgent care with injuries after being clipped by an e-scooter when its driver ran a red light in a crosswalk. This incident sparked a motion by a Cincinnati City Councilman that would make the scooter companies responsible for similar incidents.

A fireman in San Diego hit a bump in the road, flew off his scooter, and lost consciousness. While being treated for a concussion and broken nose, he encountered a second man who had been injured in a similar e-scooter accident. A man in Dallas reportedly wrecked an e-scooter and suffered fatal injuries.

The moral of this story is — riders beware. E-scooters don’t normally come with an insurance policy, and any damage will likely not be covered by a typical homeowners or auto policy. Check with your insurer to see what coverage is provided, and check with your state and city to see if they have enacted any rules and regulations for riders to follow.

Hannah E. Smith, JD, (hsmith@alm.com) is an insurance law editor with FC&S Online, the authority on insurance coverage interpretation and analysis for the P&C industry. It is the resource agents, brokers, risk managers, underwriters and adjusters rely on to research commercial and personal lines coverage issues.