The rise of the E-scooter and micro-mobility insurance | Insurance Business America
The rise of the E-scooter and micro-mobility insurance
In May 2019, global reinsurer Swiss Re published a report entitled, ‘Mobility ecosystems: striving towards a seamless interface for customers’. In this report, Corinne Fitzgerald, a researcher at the Swiss Re Institute, made the link between urbanization and mobility. She stated: “Cities are covering bigger geographical areas – known as urban sprawl – and are increasingly cosmopolitan; people are moving from rural to urban areas at a rate that is leading to almost a complete reverse in population spatial distribution and with migration, the cities that they are moving to are not always the closest to them geographically. New technology means that there are new types of transport; electric cars and trains, ride sharing platforms, and a willingness to economize means multi-modal journeys are becoming increasingly common.”
With urbanization, there’s also thought to be an increase in traffic congestion, which consequently results in additional carbon emissions – something that many companies around the world are looking to reduce. Micro-mobility solutions, like the E-scooter, could reduce the amount of congestion on city roads and therefore make a mark on global carbon emissions footprint. This makes the E-scooter attractive and explains its proliferation in recent years.
For insurance companies to stay relevant, they have to understand people, their preferences and their behavior. Essentially, they need to work with good data. And the good news is, that data is readily available. As Dan Heitlinger, financial analyst at A.M. Best pointed out recently at the firm’s Canadian Insurance Market Briefing in Toronto, micro-mobility networks only exist because of new technologies, like GPS locators and telematics tools. He said: “It’s these technologies that allow insurers to more easily understand the driving habits and risk profiles of the consumer base or of a particular rider in real-time. Ultimately, this makes underwriting the risk viable.”
The two biggest names in E-scooter sharing – Bird and Lime – both offer limited liability insurance. However, they also make riders sign rental agreements that essentially strip them of all liability, meaning customers must accept responsibility for accidents before scooting off. In the case of a claim, customers might try to fall back upon their home liability or their rental liability insurance, but most policies will exclude incidents involving motorized scooters or bikes. Therefore, a rider’s best bet for coverage is probably umbrella liability insurance on top of a home or auto policy. That’s a lot of things to think about before hopping onto an E-Scooter for a quick five-minute whizz across the city.
- Asia: In Japan, regulators have recently classed all E-scooters capable of speeds over 9kph as a motor vehicle, thus making it a legal mandate for all riders to obtain a license, registration, and everything else drivers would need to ride a moped or a motorbike. However, other countries in the region are less advanced. In India, for example, E-scooters are legal to ride without tax and insurance as long as their motors are under 250W and their maximum speed is no higher than 25kmph.
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