May 19, 2020 Articles

Oversharing? Challenges and Gaps in Insurance Coverage Where the Sharing Economy Meets Reality

An examination of three particularly visible and important areas of the sharing economy and related insurance issues: rented e-vehicles; hired, borrowed, or non-owned vehicles (focusing on automobiles and trucks); and short-term housing rentals. (Part one of three.)

By Peter Georgiton, Christopher Meeks, Arden Levy, and Kristin Davis

The future is here, and it involves the for-profit sharing of vehicles, real estate, automobiles, clothing, and other items of value. While Baby Yoda is not likely to join us any time soon, these changes are evident all around us.

The sharing economy is evident in a multitude of spaces. For example, the urban landscape around us already looks different, with sidewalks, bike lanes, and streets filled with e-scooters, Segways, and e-bikes—part of the e-transportation revolution—and docking stations for these new modes of transportation make these e-vehicles accessible to renters. As a result, many users of e-transportation are not owners of the vehicles they are using to move around, which is a significant change from only a few years ago.

Shared economies have sprouted in other spaces as well. For example, the hotel and real estate industries are vastly changed, with Airbnb and shared office spaces changing how rooms, apartments, and offices are rented. Changes have affected traditional means for accessing vehicles on a temporarily basis, with a rise in automobiles that are hired, borrowed, or used by nonowners. Peer-to-peer rentals are becoming more common for individuals and businesses alike. These changes mean business opportunities for new types of transactions and new options for rental, while also resulting in business losses for traditional companies.

Of course, the constantly evolving sharing economy means that there are new potential liabilities, with new insurance needs and considerations arising all the time. For example, it was only in 2014 when the first states enacted legislation clarifying the insurance responsibilities for Uber and Lyft drivers using their own vehicles. The sharing economy has exploded even since then. Who pays when an e-scooter rider is involved in an accident and there are resulting medical costs? Who pays when a business rents out its vehicles for use?

This article highlights the type of issues that arise in the sharing economy, focusing on three particularly visible and important areas of the sharing economy and the insurance issues that arise therefrom: (1) rented e-vehicles; (2) hired, borrowed, or nonowned vehicles (focusing on automobiles and trucks); and (3) short-term housing rentals. The three sections below provide an overview of the sharing economy in these spaces and address the types of coverage currently offered in the marketplace, sample policy language, court decisions that address certain coverage issues, and applicable regulatory and statutory schemes.

The unifying theme throughout these sections is that insurance needs arising in the shared economy are changing quickly. Resulting liabilities make it evident that there are many situations with gaps in coverage and that the insurance purchased and the insurance available for purchase do not always fill those gaps. Individuals and businesses should evaluate whether there are gaps in coverage to protect against uncovered liabilities. These gaps present new opportunities for the insurance marketplace to provide coverage.

E-Scooters, E-Bikes, and Segways—Oh My!

The last 10 years have seen an explosion in personal mobility choices, particularly with respect to single-rider methods of mobility. Almost like a movie in which aliens descend upon a city, cities have almost overnight seen themselves inundated with for-rent devices, such as electric scooters (e-scooters) and electric bikes (e-bikes) and, to a lesser extent, Segways. This section discusses the basics of e-scooters, e-bikes, and Segways and the unique liability and insurance challenges they pose. As demonstrated below, in addition to bringing mobility, these devices also bring significant coverage gaps for the unaware rider and will require government authorities and insurance markets to develop new regulations and insurance products to account for the risks they present.

E-Scooters. Almost overnight they descended upon cities: Thousands upon thousands of e-scooters were deposited by companies such as Lime, Bird, Skip, and Jump (a division of Uber) in major urban areas. The e-scooters offer an unprecedented, inexpensive opportunity for mobility, permitting riders to take a battery-powered jaunt through city streets at speeds of up to 16 miles per hour (mph).[1] The companies distribute the e-scooters throughout a defined zone of operation within the city near areas with likely riders. Each e-scooter is equipped with GPS and has the ability to broadcast its location so that users can locate the nearest scooter on the company’s app. Sign-up is easy: Users simply go to their smartphone’s app store and download an app. After entering some basic personal information and payment method and setting up an account, a user is ready to ride. The app then shows where e-scooters are located in the user’s area, and the user simply travels to the scooter, scans a “quick response” (QR) code on the scooter with his or her phone, and rides off. The app uses Bluetooth on the user’s phone to unlock the scooter before the ride and lock the scooter when the ride is complete. The cost is fairly inexpensive. Bird charges $1 to start the scooter and $.15 per minute, plus tax. Lime charges $1 to unlock and $.32 per minute. Skip charges $1 to start, and $.25 per minute.[2]

The e-scooters are equipped with lithium-ion batteries that can give them considerable range. Bird advertises that its scooters have up to 30 miles in range, while Lime indicates its scooters have 20 miles plus of range.[3] The e-scooters come equipped with numerous technological features, including the ability to communicate to app users the battery power available, regenerative brake systems, anti-theft encryption, and even the ability to self-detect damage.[4] The e-scooter companies remotely monitor the scooters to check on their power supply. If a scooter is low on power, the company will retrieve the scooter and either recharge it or replace the battery, and then “redeploy” the scooter in the community.[5]

E-Bikes. Electric bikes or “e-bikes” for the most part look just like regular bicycles. However, these bikes are equipped with battery-powered motors that provide the rider with a boost to aid in propelling the bike forward.[6] While some e-bikes have throttles on them much like a motorcycle, most simply provide a power assist while pedaling.[7] The motors can help the e-bikes go faster, though most stop providing power assist once the bike hits 20 to 28 mph.[8] By comparison, an average pedal bike rider can be expected to travel at less than 10 mph on average.[9] The need for batteries, motors, and a drive mechanism means that e-bikes often weigh considerably more than traditional pedal bikes—to the tune of 20 pounds or more.[10]

E-bikes are available for rental in major U.S. cities, with companies such as Lime[11] and Jump[12] having e-bike offerings (in addition to their e-scooter offerings), as do many local startups. The process for e-bike rentals is the same as for e-scooters, with users downloading an app, creating an account, locating an available bike with their app, and scanning a QR code to activate the bike.[13]

In contrast to e-scooters, e-bikes have a significant presence in private homes, as many are sold to private owners. Private ownership has spiked in recent years “thanks to improvements in lithium-ion battery technology, pricing, power, as well as a growing movement in cities to shift away from gasoline-powered cars to zero-emission vehicles.”[14] In 2013, 1.8 million e-bikes were sold in Europe, with only 185,000 being sold in the U.S.[15] Deloitte, however, is predicting that 130 million e-bikes will be sold globally between 2020 and 2023.[16] E-bike sales in the U.S. increased by 91 percent from 2016 to 2017 and then by another 72 percent from 2017 to 2018.[17] Unlike traditional bicycles, e-bikes can represent a significant investment for private owners, as the bikes can retail from $1,000 at the entry level, to $12,000 to $14,000 at the high end, with many bikes retailing from $3,000 to $4,000.[18]

Segways. A Segway is a two-wheeled device that looks much like a scooter, but without rear wheels. Described as a “self-balancing human transporter,” the Segway’s two wheels are located side-by-side with a platform between them for a rider to stand on.[19] The Segway then has a set of handlebars that the rider can grab onto, though recent offerings from Segway dispense with the handlebars and the rider uses leg rests to hold on to the machine.[20] Remarkably, the Segway balances itself on two wheels, whether with a rider or no rider at all.[21] To operate the Segway, a rider simply leans forward to move forward and pivots from side to side to turn.[22] To stop or slow the Segway, the rider eases back. Continuing to ease back can cause the Segway to move backwards. The Segway relies on tilt sensors and microprocessors to detect how far forward the Segway is leaning and then spins the wheels at the appropriate speed to keep the rider from falling forward.[23] A Segway can reach top speeds of up to 12.5 mph.[24]

Segways can be purchased for private use.[25] Rental companies have also popped up across the U.S. permitting individuals to rent Segways for a defined period of time.[26] In addition to personal ownership and rental, other companies offer tours of areas of interest on Segways.[27]

Implications of increased e-scooter, e-bike, and Segway usage. These increased modes of personal mobility have been praised in many quarters, with supporters noting that these devices allow unprecedented mobility for people, encourage exercise (particularly with respect to e-bikes), and can play a role in reducing the dependence on fossil-fuel burning automobiles. In other quarters, these devices have not been met with open arms, with many complaining about the impact on safety, aesthetics, and congestion. One columnist described the advent of e-scooters as creating a “summer of chaos” in Southern California, claiming that both companies and government officials are unsure how to handle the increased prevalence and popularity of these devices.[28] There are complaints that scooter companies’ business model requires them to “use public space they don’t have permission to use” and that “they really don’t have a way of controlling the actions of their riders.”[29]

Some municipalities have responded with outright bans on e-scooters.[30] Others have attempted to regulate e-scooter usage, with some cities implementing pilot programs setting strict limits on e-scooter usage.[31] Given the newness of the technology and the myriad regulatory schemes governing e-scooters, e-scooters have been referred to as the “Wild West of wheeled transportation.”[32] Chicago illustrates one approach, as it implemented a four-month pilot program for e-scooters from June 15 to October 15, 2019. Under this program, e-scooters were confined to a defined area within the city, were restricted to use between the hours of 5 a.m. and 10 p.m., and were required to be removed from the streets nightly.[33] The program was met with mixed reactions, with some praising the availability of scooters and others complaining about the clutter and, particularly, safety issues.[34] In response to a spate of recent injuries, Tel Aviv became the first city in the world to require e-bikes and e-scooters to have license numbers and helmets.[35]

E-scooters undeniably introduce a risk of injury, and even death, for riders and non-riders alike.[36] While each of the main e-scooter companies encourages, or even requires, riders to wear helmets, many riders do not heed these directions.[37] One study found that facial and head injuries increased threefold over the past decade due to increased e-scooter usage, with many people sustaining injuries as a result of a failure to wear proper protective equipment, including helmets.[38] Another study concurred that few patients injured while riding e-scooters wore helmets and that alcohol and drug use is also common.[39] Consumer Reports surveyed major hospitals and found reports of over 1,500 injuries from e-scooters between 2017 and 2019, though many hospitals do not specifically track such injuries.[40] And a study conducted by the Public Health and Transportation Departments in Austin, Texas, in association with the Centers for Disease Control and Prevention, calculated that e-scooters led to injuries at a rate of 20 individuals injured per 100,000 e-scooter trips taken during the three-month study period.[41] Almost half of these injuries involved head injuries.[42] To be sure, e-scooter companies dispute these studies and emphasize that they fail to take into account (1) the increasing popularity of the scooters and (2) the large number of scooter trips that are taken.”[43] Nevertheless, it is thought to be just a matter of time before lawsuits proliferate from e-scooter accidents.[44]

E-scooters have also introduced new accident terminology, including a “scoot and run,” where someone is hit by an e-scooter rider, who then flees from the scene. This situation often leaves an injured pedestrian without recourse because the rider is often unable to be found.[45] This challenge was exhibited with the recent case of Chicago resident Allyson Medeiros.[46] In June 2019, Mr. Medeiros was biking home from work, when someone riding an e-scooter came toward him against the flow of traffic and collided with him.[47] The collision left Mr. Medeiros unconscious, with broken bones in his face, missing teeth, scarring, and air in his chest cavity.[48] Mr. Medeiros, who did not have health insurance at the time of the accident, was left with substantial medical bills, but he does not know the identity of the rider of the e-scooter or even the e-scooter company the rider was using.[49] His lawyer was required to file a petition in court to obtain location and rider data from all e-scooter companies that were operating in Chicago at the time of the accident to try to locate all scooter riders who were in the area of the accident when it occurred. In the meantime, Mr. Medeiros has resorted to a “GoFundMe” page to cover some of his medical bills.[50]

These issues are not limited to e-scooters, as e-bikes and Segways usage also can result in injuries. One study found that e-bike injuries can be far more serious than those sustained by riders of e-scooters and traditional pedal bikes, with 17 percent of e-bike riders in accidents sustaining internal injuries, as opposed to only 7.5 percent of e-scooter and pedal bike riders.[51] The seriousness of these accidents is attributable to the speed of e-bikes—often upwards of 20 mph, as opposed to 10 mph for pedal bikes—as well as the absence of proper biking infrastructure.[52] As in the case of e-scooters, some municipalities have resorted to regulating, or even banning, e-bikes. New York City has banned e-bikes altogether, classifying them as “motorized scooters,” which are banned citywide.[53] New York seized 923 bikes during the first three quarters of 2017.[54] It further stepped up its enforcement in 2019, after a spate of fatalities involving e-bikes.[55]

The risks of injury from using Segways was dramatically highlighted in 2010 when the new owner of Segway, Jimi Heselden, was killed after his Segway plunged off of a cliff and into a river.[56] One study found that, out of 44 patients who presented to the George Washington University Hospital emergency room following a Segway accident, one quarter were admitted to the hospital, and 40 percent of those admitted sustained serious head injuries.[57] Only 7 out of the 44 patients were wearing a helmet at the time of the accident.[58]

Riders of these devices are often in for a surprise in the event of the accident, as the act of signing up with companies such as Lime, Bird, and Jump requires them to agree to release the companies from liability, assume responsibility for any accident (including any damage), and, if the rider brings a claim against the company, consent to binding arbitration. For instance, the Jump Rental agreement provides, in part:

You assume all other risks with participation in the Program including without limitation: falls; dangers of collision with vehicles, pedestrians, and fixed objects; dangers arising from surface hazards, equipment design failure, and inadequate safety equipment; hazards posed by vehicles, pedestrians, and other cyclist; and weather conditions. You further acknowledge that these risks include risks that may be the result of the failure and/or design of equipment supplied by, or the negligent acts, omissions and/or carelessness of, the Released Parties (as defined below). You understand that You will be participating in the Program at Your own risk, that You are responsible for the risks of participation in the Program, and that Your participation in the Program is fully voluntary.[59]

Bird’s rental agreement similarly contains a broad release, requiring riders to assume responsibility for all claims “arising out of or in any way related to Rider’s use of the Bird Services, Vehicles, or related equipment, including, but not limited to, those Claims based on Released Persons’ alleged negligence, breach of contract, and/or breach of express or implied warranty, except for Claims based on Released Persons’ gross negligence or willful misconduct.”[60]

Moreover, it is unclear what, if any, insurance is provided with the rentals. To ask the e-scooter companies, insurance is provided. Bird maintains that it provides insurance coverage for any accidents that might result due to a faulty Bird scooter, though this implies there is no coverage for a mere accident having nothing to do with a faulty scooter.[61] Lime asserts that its insurance coverage provides $1 million in coverage for each covered claim.[62] But, as one article points out, “[t]here’s no way to know whether a claim is covered until an investigation is done, and each claim is unique.”[63] A search of the websites for Lime, Bird, and Jump yielded no mention of any available insurance coverages for riders. Jump’s rental agreement expressly advises riders that no insurance coverage is provided:

(g) You understand that the Program does not provide insurance coverage for damage or injuries incurred during the Program.
You agree to be responsible and assume liability for any and all costs incurred as a result of participation in the Program, including without limitation ambulance transport services, hospital stays, medical treatment. You agree to indemnify and hold harmless the Released Parties from all liability for such costs.[64]

In a September 2018 consumer alert, the National Association of Insurance Commissioners advised consumers to “assume you are not covered [by the e-scooter company] in case of an accident.”[65] In the event of a dispute, rental agreements provide that the user consents to arbitration, waives class action lawsuits, and also consents to certain jurisdictions’ law and even the venue of the arbitration.[66] At least one court has upheld the enforceability of Lime’s arbitration agreement, where the user created an account and acknowledged that he or she had read and agreed to Lime’s User Agreement & Terms of Service, including the arbitration provision.[67]

Insurance implications of e-scooters, e-bikes, and Segways. The newness of these technologies means that insurance markets have not yet caught up with insureds’ use of these devices. While some states treat e-scooters and e-bikes no differently than bicycles,[68] insurers can treat these devices can be treated very differently from bicycles by virtue of the fact that, unlike bicycles, these devices have electric motors that help to propel the vehicle, thereby excluding them from coverage under typical homeowners’ and automotive coverages.[69] A review of publicly available specimen automotive and homeowners’ policies reveals that users of e-bikes, e-scooters, and Segways yields significant gaps in coverage for accidents involving such devices.[70]

Personal automobile policies. A typical ISO form personal auto policy’s liability coverage provides in its insuring agreement that “[w]e will pay damages for ‘bodily injury’ or ‘property damage’ for which any ‘insured’ becomes legally responsible because of an auto accident.”[71] But the exclusion in the policy provides:

B. We do not provide Liability Coverage for the ownership, maintenance or use of:
                        1. Any vehicle which:
                                    a. Has fewer than four wheels; or
b. Is designed mainly for use off public roads.
This Exclusion (B.1.) does not apply:
a. While such vehicle is being used by an “insured” in a medical emergency;
b. To any “trailer;” or
c. To any non-owned golf cart.[72]

Because e-scooters, e-bikes, and Segways have fewer than four wheels, they are not covered for purposes of an ISO form personal automotive policy. Language identical or similar to that found in the ISO policy long has been interpreted by courts as excluding coverage for two-wheeled powered vehicles such as motorcycles and scooters.[73]

Even if liability coverage may not be available for a rider of an e-scooter, e-bike, or Segway, uninsured motorists’ coverage may be available if the rider is an “insured” under a policy with UM/UIM coverage and is involved in an accident involving an “uninsured motor vehicle.” For example, the insuring agreement under a typical ISO personal automotive policy’s uninsured motorists’ coverage form, provides:

A. We will pay compensatory damages which an “insured” is legally entitled to recover from the owner or operator of an “uninsured motor vehicle” because of “bodily injury”:
            1. Sustained by an “insured”; and
            2.  Caused by an accident.
The owner’s or operator’s liability for these damages must arise out of the ownership, maintenance or use of the “uninsured motor vehicle.” . . . [74]

“Uninsured motor vehicle” is defined broadly as including any “land motor vehicle or trailer of any type:”

1. To which no bodily injury liability bond or policy applies at the time of the accident.
2. To which a bodily injury liability bond or policy applies at the time of the accident. In this case its limit for bodily injury liability must be less than the minimum limit for bodily injury liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged.
3. Which is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:
            a. You or any “family member”;
            b. A vehicle which you or any “family member” are “occupying”; or
            c.  “Your covered auto.”
4. To which a bodily injury liability bond or policy applies at the time of the accident but the bonding or insuring company:
            a. Denies coverage; or
            b. Is or becomes insolvent.[75]

Under this language, UM/UIM coverage is provided to an insured who is in an accident with an uninsured motor vehicle irrespective of whether the insured is riding in a covered auto or even a vehicle. The emphasis on coverage is whether the individual is an “insured” and whether the offending vehicle is an “uninsured motor vehicle” for purposes of the coverage. Thus, under this language, riders of e-scooters, e-bikes, and Segways who are “insureds” under automotive policies could be entitled to UM/UIM coverage if they are hit by an “uninsured motor vehicle.”

Whether the inverse is true—i.e., whether an individual hit by an e-scooter, e-bike, or Segway would be entitled to UM/UIM coverage—is entirely a different question. Under the ISO form, an “uninsured motor vehicle” must be a “land motor vehicle.” On its surface, an e-scooter, e-bike, and Segway would each appear to qualify as land motor vehicles, as they are a mode of transportation operating on land and have a motor for propulsion. Many courts that have addressed the issue indicate that any vehicle with a motor, including scooters and motorcycles, constitute “land motor vehicles” for purposes of UM/UIM coverage, though a handful of courts have reached the opposite conclusion, typically due to legislative definitions of “motor vehicle” excluding motorcycles and scooters.[76] Consistent with this, courts have concluded that human-powered pedal bicycles are not “land motor vehicles” because they lack the requisite “motor.”[77] It would seem to follow that e-scooters, e-bikes, and Segways would constitute “land motor vehicles” in most jurisdictions, such that, in the absence of an express exclusion, they could qualify as an “uninsured motor vehicle” in the event an insured under an auto policy is struck by a rider of an e-scooter, e-bike, or Segway.

The ISO form, of course, is not the only form in the marketplace. Other auto policy forms, however, may provide some liability coverage, particularly if the policies broadly define an “insured auto” as a “land motor vehicle” and do not restrict an “insured auto” to a four-wheeled vehicle under all circumstances. As many courts having broadly construed “land motor vehicle” to include two-wheeled, motored vehicles such as motorcycles and scooters, liability coverage could attach for riders of rented e-scooters, e-bikes, and Segways under some circumstances.[78] Still other policies may more clearly exclude e-scooters, e-bikes, and Segways from their ambit.

In sum, the landscape of coverage for accidents involving e-bikes, e-scooters, and Segways under traditional automobile policies is muddled at best. Specimen policies do not provide liability insurance for riders of such devices, but riders may be able to obtain additional coverage, such as UM/UIM coverage, depending on the jurisdiction. The lack of uniformity within policies and jurisdictions, however, means that many riders will be unaware just what coverage they have when they get on one of these devices.

Homeowners’ policies. Another potential source of liability coverage for a rider of an e-scooter, e-bike, or Segway would be a homeowner’s policy. However, many of the typical homeowners’ policy forms expressly exclude coverage for “Motor Vehicle Liability.” The 2010 ISO Homeowners 3 form provides as follows:

1. Coverages E and F [liability coverages] do not apply to any “motor vehicle liability” if, at the time and place of an “occurrence,” the involved “motor vehicle”:
a. Is registered for use on public roads or property;
b. Is not registered for use on public roads or property, but such registration is required by a law, or regulation issued by a government agency, for it to be used at the place of the “occurrence”; or
c. Is being:
(1) Operated in, or practicing for, any prearranged or organized race, speed contest or other competition;
(2) Rented to others;
(3) Used to carry persons or cargo for a charge; or
(4) Used for any “business” purpose except for a motorized golf cart while on a golfing facility.
2.  If Exclusion A.1 does not apply, there is still no coverage for “motor vehicle liability,” unless the “motor vehicle” is:
a. In dead storage on an “insured location”;
b. Used solely to service a residence;
c.  Designed to assist the handicapped and, at the time of an “occurrence”, it is:
      (1) Being used to assist a handicapped person or
      (2) Parked at an “insured location”;
d.  Designed for recreational use off public roads and:
      (1) Not owned by an “insured”; or
      (2) Owned by an “insured” provided the “occurrence” takes place [under certain enumerated circumstances]. . . .[79]

The ISO Homeowners form broadly defines a “motor vehicle” as “a self-propelled land or amphibious vehicle” or “any trailer or semitrailer which is being carried on, towed by or hitched for towing by a” self-propelled land or amphibious vehicle.[80] Courts have interpreted this same language to preclude coverage for liability arising out of motor bikes.[81] Accordingly, given that e-scooters, e-bikes, and Segways are equipped with motors and have the ability to propel themselves, any liability arising out of the use of such devices is arguably not covered under a traditional homeowners’ policy.

Market response to new modes of personal transportation. The advent of new modes of transportation, including ride-sharing services, as well as the existence of substantial gaps in traditional coverages, has led the insurance market to respond with new product offerings to try to close the coverage gap. Several insurers, including State Farm and Allstate, are offering personal liability umbrella policies that can provide some coverage for riders of e-scooters and similar devices.[82] Nationwide, however, does not yet provide such coverage. Nationwide has indicated that such devices need to be “governed by common-sense regulation that emphasizes safety and protects all road users,” and even when this occurs, insurance “‘should be provided directly to the consumer by the device provider.’”[83] In other words, even if it does begin providing such coverage, Nationwide does not envision providing such coverage directly to consumers.

One potential partial solution is provided by State Farm and is called a “Personal Mobility Policy.”[84] State Farm advertises that the policy “may” fill coverage gaps presented in the following cases:

  • You’re a rideshare passenger injured in an auto accident because of the rideshare driver’s negligence or fault.
  • You’re injured as a pedestrian getting in or out of a rideshare vehicle.
  • You’re hit by an uninsured motorist while riding a bicycle or motorized scooter.[85]

However, this product, in addition to being available only in California, does not appear to provide third-party liability coverage for one riding an e-bike or e-scooter.

E-bikes appear to be ahead of the game, as several providers have entered the market with e-bike insurance, building off of existing policies for bicycles. One such provider is Spoke Insurance, which is described as “powered by Marsh & McLennan” and is underwritten by Markel Specialty.[86] It describes itself as the “first in the USA to identify and provide insurance coverage for E-bikes.”[87] Spoke also offers insurance for other types of traditional, nonelectric bicycles.[88] In addition to physical damage coverage, Spoke will write up to $100,000 in personal liability coverage arising out of e-bikes.[89] This coverage, however, is geared to owners of e-bikes, and not to an occasional renter of e-bikes through services like Lime and Jump.

What does the future hold for insurance for e-bikes, e-scooters, and Segways? While there are some new products on the market, it is clear that there are many coverage gaps still presented by devices such as e-scooters, e-bikes, and Segways. Some industry experts envision that, as these technologies become more settled, we will be able to see different types of products created by insurers to fill the gap, such as has occurred with rideshare companies like Lyft and Uber.[90] One possibility would be “on demand” coverage, where a rider can purchase coverage as needed for a particular ride.[91] It will be necessary, however, for government agencies regulating these devices to mature and settle who is to bear the risk for incidents and, most importantly, who is expected to provide insurance—the rider, the renting company, or both. Once this is settled, it will be incumbent upon insurance companies to step in with new products to fill a clear coverage need.

--Part two of this three-part article will delve into hired, borrowed, and nonowned automobiles.

Peter Georgiton is a partner with Dinsmore & Shohl LLP in Columbus, Ohio, representing insurers.

Christopher Meeks is a partner with Lewis, Brisbois, Bisgaard & Smith LLP in Atlanta, Georgia.

 Arden Levy is a partner with Arden Levy Law PLLC in Alexandria, Virginia, representing policyholders.

 Kristin Davis is a partner with Thompson HD in Washington, D.C., representing policyholders.

[1] See Lime Electric Scooter Sharing, FAQs.

[2] See Skip (home page).

[3] See BirdOne (home page); Lime Electric Scooter Sharing, FAQs.

[4] BirdOne (home page); see also BirdTwo (home page).

[5] See, e.g., Lime Electric Scooter Sharing, FAQs. Lime calls its battery-charging personnel “juicers” and offers up to $30 per hour for those willing to traverse the community powering up scooters.

[6] Selene Yeager, “13 Reasons to Get Stoked About E-Bikes,” Bicycling, May 3, 2019.

[7] Yeager, “13 Reasons to Get Stoked About E-Bikes,” supra note 11. The power assist can be through a front hub motor connected to the front wheel of the bike, a rear hub motor connected to the rear wheel, or a central drive motor in the frame of the bike, which applies power through the pedal drive assembly. See Tim Cumming, “How Does an Electric Bike Work?,” Telegraph, June 8, 2018. Id.

[8] Yeager, “13 Reasons to Get Stoked About E-Bikes,” supra note 11; see also Vishwadha Chander, “E-Bikes Show Distinct Pattern of Severe Injuries,” Reuters, Dec. 25, 2019.

[9] Chander, “E-Bikes Show Distinct Pattern of Severe Injuries,” supra note 13.

[10] Yeager, “13 Reasons to Get Stoked About E-Bikes,” supra note 11.

[11] Lime Electric Bike Sharing, FAQs.

[12] Jump (home page).

[13] Lime, Electric Bike Sharing.

[14] Andrew J. Hawkins, “Forget Electric Cars—E-Bikes Will Be the Top Selling EV in the Next Decade,” Verge, Dec. 16, 2019.

[15] Hawkins, “Forget Electric Cars—E-Bikes Will Be the Top Selling EV in the Next Decade,” supra note 19.

[16] Hawkins, “Forget Electric Cars—E-Bikes Will Be the Top Selling EV in the Next Decade,” supra note 19.

[17] Hawkins, “Forget Electric Cars—E-Bikes Will Be the Top Selling EV in the Next Decade,” supra note 19.

[18] See, e.g., Trek (home page); Adrienne So, “The Best Electric Bikes for Every Kind of Ride,” Wired, Sept. 8, 2019.

[19] Tom Harris, “How Segways Work,” howstuffworks.

[20] See Segway, Segway Ninebot  S-Plus.

[21] Harris, “How Segways Work,” supra note 24.

[22] Frederick Kunkle, “Summer’s Here and So Are the Segway Tourists. Understand the Risks Before Rolling Out,” Wash. Post, June 8, 2017.

[23] Kunkle, “Summer’s Here and So Are the Segway Tourists,” supra note 27; Harris, “How Segways Work,” supra note 24.

[24] Kunkle, “Summer’s Here and So Are the Segway Tourists,” supra note 27.

[25] See, e.g., Segway, Segway Ninebot S.

[26] See, e.g., Venice Segway PT Rental Website, https://www.venicesegwayrental.com (last accessed Jan. 19, 2020) (offering Segway rentals in Venice, California).

[27] See, e.g., The Garage OTR (home page) (offering Segway tours of Cincinnati, Ohio); Segway Las Vegas (home page) (offering tours of Las Vegas, Nevada, sites); Chicago Segway Tour (home page) (offering tours of Chicago, Illinois, sites); Segway of Charleston (home page) (offering tours of Charleston, South Carolina, sites).

[28] Robin Abcarian, “Cities Crack Down on Electric Scooter Scofflaws, While Trying to Untangle the Chaos of a New Technology,” L.A. Times, July 27, 2018.

[29] Abcarian, “Cities Crack Down on Electric Scooter Scofflaws, While Trying to Untangle the Chaos of a New Technology,” supra note 33 (quoting Debbie Lee, chief communications officer of Santa Monica, California).

[30] Abcarian, “Cities Crack Down on Electric Scooter Scofflaws, While Trying to Untangle the Chaos of a New Technology,” supra note 33 (noting bans in West Hollywood and Beverly Hills); Julia Buckley, “E-Scooters Suddenly Appeared Everywhere, but Now They’re Riding into Serious Trouble,” CNN, Nov. 29, 2019 (noting full and partial bans in the United Kingdom, Singapore, and other jurisdictions).

[31] See City of Chicago Requirements for Scooter Sharing Emerging Business Permit Pilot Programhttps://www.chicago.gov/city/en/depts/cdot/supp_info/ escooter-share-pilot-project.html (last accessed Jan. 19, 2020).

[32] Tara Haelle, “‘Wild West of Wheeled Transportation’: E-Scooter Injuries Increasing Without Regulation,” Forbes, Aug. 31, 2019.

[33] City of Chicago Requirements for Scooter Sharing Emerging Business Permit Pilot Program, supra note 36.

[34] Mary Wiesnewski, “After about 800,000 Rides and Many ER Visits, the Chicago Scooter Pilot Comes to an End,” Chi. Trib., Oct. 15, 2019.

[35] Arye Green, “Tel Aviv Is World’s First City to Require License Plates and Helmets for Shared Electric Scooters,” Jewish Press, Dec. 24, 2019.

[36] Buckley, “E-Scooters Suddenly Appeared Everywhere, but Now They’re Riding into Serious Trouble,” supra note 35 (noting reports of multiple deaths worldwide, including in Singapore, where one hospital alone reported six deaths from e-scooters).

[37] The Lime user agreement provides:

We recommend that you wear a helmet any time you use any of our bikes and scooters, preferably Snell, CPSC, ANSI or ASTM-approved. It should be sized, fitted and fastened per manufacturer instructions. Helmets and other protective gear are no guarantee against personal injury. Helmets are required by law in some areas, so definitely wear one if those laws apply to you. If you choose not to wear a helmet and are injured as a result, we are not responsible. . . .

Lime, User Agreement; see also Abcarian, “Cities Crack Down on Electric Scooter Scofflaws, While Trying to Untangle the Chaos of a New Technology,” supra note 33; “E-Scooter Injuries on the Rise, Researchers Urge Helmet Laws,” Ins. J., June 12, 2019.

[38] “E-Scooter Injuries on the Rise, Researchers Urge Helmet Laws,” supra note 42.

[39] Haelle, “‘Wild West of Wheeled Transportation’: E-Scooter Injuries Increasing Without Regulation,” supra note 37; see also Scott Stump, “Study Finds Nearly Half of Serious E-Scooter Injuries Involved Alcohol,” Today, Aug. 29, 2019.

[40] Ryan Felton, “E-Scooter Ride Share Industry Leaves Injuries and Angered Cities in Its Path,” Consumer Reps., Feb. 5, 2019.

[41] Andrew J. Hawkins, “Electric Scooter Use Results in 20 Injuries Per 100,000 Trips, CDC Finds,” Verge, May 2, 2019.

[42] Hawkins, “Electric Scooter Use Results in 20 Injuries Per 100,000 Trips, CDC Finds,” supra note 46; see also Michael Finch II & Tony Bizjack, “Electric Scooter Injuries Surge as More Riders Mangle Their Legs and Skulls, Study Shows,” Post Bull. (Rochester, MN), Jan. 12, 2020 (UC San Francisco study found rate of injuries jumped from 6 to 19 cases for every 100,000 people, a threefold increase, though scooter companies criticized study for not accounting for the rising popularity of e-scooters).

[43] Janet Lorin, “Who Pays for Injuries Blamed on E-Scooters?,” Ins. J., Jan. 29, 2019; see also Finch & Bizjack, “Electric Scooter Injuries Surge as More Riders Mangle Their Legs and Skulls, Study Shows,” supra note 47.

[44] Hawkins, “Electric Scooter Use Results in 20 Injuries Per 100,000 Trips, CDC Finds,” supra note 46; Finch & Bizjack, “Electric Scooter Injuries Surge as More Riders Mangle Their Legs and Skulls, Study Shows,” supra note 47.

[45] Anousha Sakoui & Edvard Pettersson, “Injury Lawyers Chasing Scooter Accidents, In Search of Insurers,” Ins. J., June 12, 2018. One lawyer quoted in the article said, with “scoot and run” incidents, he’s been “turning away a lot of callers because I need to have an insurance company to go after.”

[46] Peter Holley, “A Hit-and-Run Scooter Crash Nearly Killed Him. Now He’s Fighting for the Data That Could Reveal the Rider’s Identity,” Wash. Post, July 10, 2019.

[47] Holley, “A Hit-and-Run Scooter Crash Nearly Killed Him. Now He’s Fighting for the Data That Could Reveal the Rider’s Identity,” supra note 51.

[48] Holley, “A Hit-and-Run Scooter Crash Nearly Killed Him. Now He’s Fighting for the Data That Could Reveal the Rider’s Identity,” supra note 51.

[49] Holley, “A Hit-and-Run Scooter Crash Nearly Killed Him. Now He’s Fighting for the Data That Could Reveal the Rider’s Identity,” supra note 51.

[50] Holley, “A Hit-and-Run Scooter Crash Nearly Killed Him. Now He’s Fighting for the Data That Could Reveal the Rider’s Identity,” supra note 51.

[51] Vishwadha Chander, “E-bikes Show Distinct Pattern of Severe Injuries,” Reuters, Dec. 25, 2019; Ed Cara, “E-Bikes Riskier to Ride Than E-Scooters and Bikes, Study Suggests,” Gizmodo, Dec. 26, 2019.

[52] Cara, “E-Bikes Riskier to Ride Than E-Scooters and Bikes, Study Suggests,” supra note 56.

[53] Press Release, New York City, Mayor de Blasio and NYPD Announce Plans to Crack Down on Improper Use of Electric Bikes (Oct. 19, 2017).

[54] Press Release, supra note 58.

[55] Ben Chapman, “Police Crack Down on Electric Bikes in New York City,” Wall St. J., Sept. 5, 2019.

[56]Ann Binlot, “Study: Segway Injuries on the Rise,” CBS News, Sept. 27, 2010; see alsoSegway Co. Owner Drives Segway Off Cliff, Dies,” CBS News, Sept. 27, 2010.

[57] Binlot, “Study: Segway Injuries on the Rise,” supra note 61.

[58] Binlot, “Study: Segway Injuries on the Rise,” supra note 61.

[59] Jump Rental Agreement.

[60] Bird Rental Agreement, Waiver of Liability and Release, Effective Date: Apr. 30, 2019.

[61] Cathy Bussewitz, “When Electric Scooters Crash, Who Pays the Bills?,” Associated Press, June 26, 2019.

[62] Bussewitz, “When Electric Scooters Crash, Who Pays the Bills?,” supra note 66.

[63] Bussewitz, “When Electric Scooters Crash, Who Pays the Bills?,” supra note 66.

[64] Jump Rental Agreement.

[65] National Ass’n of Insurance Commissioners (NAIC), Scooter Sharing Creates Insurance Implications for Consumers (Sept. 2018).

[66] NAIC, Scooter Sharing Creates Insurance Implications for Consumers, supra note 70. (providing for arbitration in county where rider resides, but requiring arbitrator to be licensed in California); Bird Rental Agreement, Waiver of Liability and Release, supra note 65 (providing that disputes arising out of or relating to use and rental of vehicle are to be subject to binding arbitration in Los Angeles, California, or a “mutually agreed upon location”); Lime User Agreement (updated Oct. 28, 2019) (providing agreement is governed by laws of California and any disputes are to be arbitrated in the “metropolitan statistical area” where rider resides).

[67] Phillips v. Neutron Holdings, Inc., No. 3:18-cv-3382, 2019 U.S. Dist. LEXIS 171313, at *15–16 (N.D. Tex.).

[68] For example, in 2019, Kentucky enacted a law making clear that e-scooters are to be treated the same as bicycles, with no requirement to purchase insurance or licenses. See Jim Sams, “States Treat Electric Scooters as Bikes Even as Injuries Appear to Rise,” Ins. J., Apr. 1, 2019.

[69] See Bethan Moorcraft, “The Rise of the E-Scooter and Micro-Mobility Insurance,” Ins. Bus. Mag., Sept. 23, 2019 (noting that most home liability or rental liability insurance policies “will exclude incidents involving motorized scooters or bikes”); Bussewitz, “When Electric Scooters Crash, Who Pays the Bills?,” supra note 66 (noting that homeowners’ policies typically exclude liability arising out of motorized vehicles and auto policies do not cover vehicles with fewer than four wheels); NAIC, Scooter Sharing Creates insurance Implications for Consumers, supra note 70 (advising e-scooter renters to “[c]heck 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.”)

[70] See alsoInsurers, Take Note: Scooters Are Rolling In,” Accenture Ins. Blog, Sept. 14, 2018 (noting that “[t]he risk and liability landscape for scooters and shared bikes remains ambiguous, to say the least”).

[71] See ISO Form PP 00 01 01 05 (2003).

[72] ISO Form PP 00 01 01 05 (2003) (emphasis added).

[73] See, e.g., Royal Indem. Co. v. Rolofson, 213 Cal. App. 3d 373, 376–77 (2nd App. Dist. 1989) (motorcycle not covered “auto” under policy as “[t]he term ‘auto’ is commonly understood to mean a four-wheeled passenger motor vehicle”); Greer v. Progressive Cas. Ins. Co., No. 4:16-cv-00935, 2017 U.S. Dist. LEXIS 139292 (W.D. Mo.) (Harley Davidson motorcycle not “auto” or “covered auto” under automotive policies because it did not have four wheels and therefore wasn’t an “auto”); Tata v. Bridges, No. 2013-CV-0403, 2014 Ohio Misc. LEXIS 2532, *4–5 (C.P. Erie Cty.) (motorcycle not “auto” as defined by policy because motorcycle was not listed as a covered vehicle and doesn’t have four wheels).

[74] ISO Form PP 00 01 01 05 (2003), Part C.

[75] ISO Form PP 00 01 01 05 (2003), Part C.

[76] See, e.g., Taullele v. Allstate Ins. Co., 296 Minn. 247, 250 (1973) (noting that both motor scooters and motor cycles constitute “land motor vehicles” for purposes of UM/UIM coverage); Ellis v. Nationwide Ins. Co., 160 Ohio App. 3d 302 (7th Dist. 2005) (concluding that a motorcycle constitutes a “land motor vehicle” for purposes of UM/UIM coverage, noting that policy language tracks Ohio’s UM/UIM statute, Ohio Rev. Code 3937.18(A), which defines a “motor vehicle” as “a self-propelled vehicle designed for use and principally used on public roads, including an automobile, truck, semi-tractor, motorcycle, and bus”). But see Hernandez v. Progressive Direct Ins., No. CV186083541S, 2019 Conn. Super. LEXIS 3175, at *14 (noting that insurance policy contained no definition of “land motor vehicle” and resorting to Connecticut law to conclude that a scooter is not a motor vehicle for purposes of the policy); Lee v. Davis, 897 So. 2d 753, 756 (La. Ct. App., 5th Cir. 2005) (noting that Louisiana code defines “motor vehicle” broadly as “every vehicle which is self-propelled, and every vehicle which is propelled by electric power obtained from overhead trolley wires, but not operated upon rails, but excluding a motorized bicycle.”) (emphasis in original).

[77] See Days v. Stonebridge Life Ins. Co., No. CV414-214, 2017 U.S. Dist. LEXIS 102102 (S.D. Ga.) (applying Illinois law and holding that a pedal bicycle was not a “land motor vehicle” because “[t]he insurance contracts in this case clearly define a land motor vehicle as a vehicle powered by gasoline, diesel, or some other similar power,” and also noting that Illinois law excludes bicycles from definition of “motor vehicle”); Chong v. Cal. State Auto. Ass’n, 48 Cal. App. 4th 285 (1996) (citing California statutes for proposition that pedal bikes are not “land motor vehicles” for purposes of UM/UIM coverage, as bicycles rely exclusively on human power, and not a motor).

[78]See supra note 81 (citing cases defining “land motor vehicle” as including scooters and motorcycles).

[79] ISO Homeowners 3—Special Form, Form No. HO 00 03 05 11 (2010), p. 17.

[80] ISO Homeowners 3—Special Form, Form No. HO 00 03 05 11, p. 2.

[81] See, e.g., Harkins v. Progressive Gulf Ins. Co., 262 Ga. App. 559, 563 (2d Div. 2003) (homeowner’s policy excludes coverage for negligent supervision claim arising out of motor bike accident, as policy excludes damages arising from the use of motorized land vehicles).

[82] Bussewitz, “When Electric Scooters Crash, Who Pays the Bills?,” supra note 66; see also Moorcraft, “The Rise of the E-Scooter and Micro-Mobility,” supra note 74 (suggesting that “a rider’s best bet for coverage is probably umbrella liability insurance on top of a home or auto policy”) (emphasis added).

[83] Bussewitz, “When Electric Scooters Crash, Who Pays the Bills?,” supra note 66.

[84] State Farm, A Personal Mobility Policy That Goes With You.

[85] State Farm, A Personal Mobility Policy That Goes With You (emphasis added).

[86] Spoke Insurance (home page).

[87] Spoke Insurance (home page).

[88] Spoke Insurance (home page).

[89] Spoke Insurance, Electric bike insurance.

[90] Hailey Ross, “E-Scooter Popularity Could Lead to Scooter-Specific, On-Demand Insurance,” S&P Global, Dec. 24, 2018.

[91] Ross, “E-Scooter Popularity Could Lead to Scooter-Specific, On-Demand Insurance,” supra note 95.


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