Scooter Sharing Creates Insurance Implications for Consumers

Understanding insurance coverages for electric rental scooters

Electric scooter sharing is a new phenomenon, joining ridesharing as an alternative mode of transportation. These rentals have led to a new entrant in major city traffic lanes. There are hundreds of scooters in some cities, and they have caused some headaches and have insurance implications for consumers, municipalities and insurance companies. The NAIC offers the following guidance for consumers about insurance coverage before renting an electric scooter.

About Electric Scooter Sharing

In 2018, companies such as Lime, Bird and Spin have rolled out scooter rentals in major cities throughout the U.S. The battery-powered rental scooters reach speeds of 15-20 mph and may or may not require proof of a valid driver's license.

Are You Covered?

There have been numerous reports of accidents on motorized scooter rentals in 2018. What's believed to be the first death of a person riding a scooter rental was reported in September. Before you decide to rent a scooter, you should understand the insurance implications and know whether you are covered.

Some cities, like San Francisco, require scooter rental companies to obtain a permit from the city and provide proof of insurance before they can operate legally. Unless the company policy indicates otherwise, assume you are not covered in case of an accident. You should rely on your health insurance for any medical injury you sustain. In case of an accident, you might not have any coverage if you are found liable for an accident or damage.

Check your insurance policies to determine whether you are covered. Automobile insurance generally omits liability coverage for motor vehicles with fewer than four wheels, and it's unlikely to apply to scooter rentals. Although most homeowners policies provide some liability coverage even while you are away from your residence, it may be limited or excluded because the scooter is a rental.

Like any new trend, these issues may not be specifically addressed in your policy, and coverage will depend on the carrier and the specific language in your policy.

Understanding Your Scooter Insurance Options

Scooter Insurance: Regulations and requirements vary by state — often depending on the engine size. Most scooter rental companies offer rentals with engines smaller than 50 cc. While most states do not require insurance for engines that small, they do recommend it. Scooter insurance will often cover the following:

  • Collision: Covers damages resulting from a collision.
  • Liability: Protects against damage you do to others or their property while operating a scooter.
  • Medical: Covers your medical costs in an accident.   

Contact your state insurance department to learn more about what is required in your area.

Personal Liability Umbrella Insurance: Umbrella insurance is extra liability insurance. In addition to riding a scooter, if you frequently ride bikes or have outdoor attractions on your property, you should consider an umbrella policy. It provides coverage for injuries, property damage and some lawsuits.

Contact your insurance agent to determine what coverage might be the best fit for you.

Other Ways to Protect Yourself

  • Wear a helmet: You may not be required to wear a helmet while operating a rental scooter, but it is highly recommended. Learn more about your state's laws about wearing helmets.  
  • Operate the scooter in right-hand lanes and bike lanes where possible: Your agreement with your scooter rental company will tell you to use streets and bike lanes. Riding motorized scooters on sidewalks is illegal in most cities, and you can be cited for doing so.
  • Keep the Road Code: You may be tempted to share photos or video of your new adventure on social media while operating. Always pay attention to the road. Keep both hands on the scooter at all times, unless using hand turn signals.

More Information

If you have questions about rental scooters and insurance, please contact your state insurance department. For more information about your insurance needs and tips for choosing the coverage that is best for you, visit Insure U.

September 2018

About the NAIC

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For more information, visit www.naic.org.

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