Insurance Coverage and E-scooter Rentals

Rentable electric scooters are a fledgling transportation service. Their ease of access and utility have allowed companies in the space to quickly expand across the US.

As e-scooters become an increasingly popular mobility option, questions regarding insurance coverage are rising.

E-scooters are not technically considered automobiles, which means they aren’t covered by traditional auto insurance or legislation covering the rental of larger vehicles.

A car rental process requires a license and proof of insurance, e-scooters are accessible to anyone with just a few clicks. This is good news for users, but is vexing for insurers.

If your client has an accident on an e-scooter, their car insurance won’t cover it. This leaves them responsible for footing a bill that includes:

1. Personal medical expenses, out of pocket
2. Repairs to the scooter itself
3. Medical expenses or property damage to a third party

This adds up quickly with your client left to cover it all on their own.

But wait, won’t the scooter company pay?

The e-scooter company might pay if an accident involves a malfunction or other confounding issue and some companies have insurance policies that cover riders in case of accident or injury.

Accessing this coverage, however, requires your client prove liability. That’s where things get complicated.

When signing up to rent an e-scooter, your client agrees to terms and conditions just like any other contract. Standing on the street and reading the entire terms and conditions document before riding the scooter isn’t very enjoyable and most users just agree to the T&Cs and move on.

This presents a problem, because many of these terms and conditions documents require users to agree to arbitration in the event of an accident. Your client’s agreement waives their right to resolve concerns via the court system, meaning they have to negotiate with the scooter company directly.

Going through the process and channels required by arbitration can delay financial relief your client needs in the event of an accident.

And if the scooter company refuses to pay, the agreement to “ride at your risk” leaves your client without any options.

Does this mean I should advise my clients not to use e-scooters?

E-scooters are a rising trend in micro-mobility with incredible ease of access and functionality.

Users should take proper precautions both to avoid accidents and to mitigate their liability risk when riding. Advise your clients to take a close look at the terms and conditions they are agreeing to during the rental to make sure they have options in the event of an accident.

The key to responsible e-scooter use is what happens before they start the rental. Rather than waiting to read terms and conditions standing on the street, urge your clients to research ahead so they are prepared and knowledgeable to handle any issues that arise.