Your Guide to Selling Insurance for ebikes
In 2021, the U.S. imported close to 790,000 electric two-wheel bicycles, according to the latest figures from the Light Electric Vehicle Association (LEVA). That’s an increase of more than 70% year-over-year from 2020! By comparison, Americans purchased 652,000 electric cars in 2021, including plug-in hybrids. LEVA points out the 2021 ebike import figures don’t necessarily equal sales, but it provides useful information on the market for this product.
Import data shows ebikes surpassing electric cars in the U.S. market.
Sources: BloombergNEF, Light Electric Vehicle AssociationIncludes plug-in hybrids
What’s the attraction?
Electric bikes aren’t new. The first patent for an ebike was granted on December 31, 1895, to Ogden Bolton, Jr. However, the concept of electric bicycles was not wildly popular for almost a century, when interest and demand began to take off with ebikes in the 1990’s. In 1989, Yamaha built one of the first prototypes of electric bicycles and later also invented the pedal assist system in 1993. Later in 1997, Lee Iacocca jumped in by founding EV Global Motors that produced the ebike SX, which became widely popular in the U.S. Driving much of the interest in ebikes is the fact they cost so much less than electric autos. This attracts many new riders and makes them more accessible to the general population, especially for consumers that live in urban metro centers, where work and home aren’t terribly far apart. With inflation and gas at historic levels, utilizing a mode of transportation that gets great mileage and doesn’t consume gasoline suddenly becomes very appealing.
So, what’s the catch? When I was young, I used to jump the ole’ Schwinn 10-speed and ride all day long, never wondering about anything as mundane as bicycle insurance. After all, it’s not a Chevy or Harley Davidson, right? Just a regular bike. No driver’s license or special training is required to ride or operate an ebike either. You aren’t even legally required to carry proof of insurance. However, this is where things get tricky. ebikes are propelled by a motor, which makes them a motorized vehicle. In principle, the concept of an ebike isn’t drastically different from an electric car or golf cart. Costs of ebikes can vary from entry-level starting at about 450,000 and rising to around 12,000 for a higher-end model, with averages falling somewhere in the couple two to three thousand range.
Insurance agents might instinctively want to just add an endorsement to the property policy, such as a Renter’s insurance policy. But does such an endorsement exist? And, what about the motorized vehicle exclusion? Okay, let’s just add the ebike to the personal auto policy! Not so fast, you see, ebikes don’t require a license to operate so long as it does not exceed 28 mph. This is where the proverbial insurance waters get quite murky. Where do you insure an electric bicycle? Maybe, use a specialized policy product specifically designed for the exposures related to ebikes. Where do I find such a market?
All are great questions, so we should be researching and learning how to protect our customers. What SIAA has learned through talking with several partner companies is there’s not a single universal solution to this challenge. Some insurance companies do offer solutions but each one seems to have a unique way of handling the risk. One company will allow an electric bicycle on the Homeowner’s policy and another company will put it on their Personal Auto policy as a miscellaneous vehicle. While there doesn’t seem to be any standard policy products for electric bicycles, currently, some specialty markets have product offerings available. At the time of this article, products offered by Markel, Spoke, and Velosurance are available, with others likely coming into the marketplace regularly to fill this niche.
What Coverage Should I Look For? What Limits?
Liability coverage to protect you from injuries or property damage to others is essential and can cover the medical cost of the insured cyclist associated with a cycling accident. Optional, but considering you may want to cover the cost of the ebike, you may consider accidental damage (think Collision and Comprehensive) for things like theft, vandalism, fire, collision with another object, etc. You can obtain coverage for spare parts, cycle apparel, and rental reimbursement.
For limited coverage, you want to think in terms of what you already carry for personal auto or motorcycle. According to the Centers for Disease Control and Prevention, “Nearly 1,000 bicyclists die and over 130,000 are injured in crashes that occur on roads in the United States every year.” The CDC continues, “The costs of bicycle injuries and deaths from crashes typically exceed 23 billion in the United States each year.” 1 These figures include traditional bicycles and ebikes.
Ready to sell products like electric bike insurance and more? Contact us to get started.
Centers for Disease Control and Prevention. Web-based Injury Statistics Query and Reporting System (WISQARS). Atlanta, GA: Centers for Disease Control and Prevention, National Center for Injury Prevention and Control. Available at cdc.gov/injury/wisqars. Accessed on 03/15/2022.
What Is an ebike?
A motorized bicycle with an integrated electric motor used to help propulsion is known as an electric bicycle (e-bike, ebike, etc.).
There are many types of e-bikes available around the world, but they generally fall into two categories: bikes that help the rider’s pedal force (i.e. pedelecs) and motorcycles with a throttle and moped-style capabilities. Both are not electric motorcycles because the rider may still pedal them.
E-bikes have rechargeable batteries and can travel up to 32 kilometers per hour (16 to 20 mph). High-powered types can frequently reach speeds of greater than 45 km/h (28 mph).
They are gaining popularity in some regions, such as Germany as of 2013, and are displacing traditional bicycles, while in others, such as China as of 2010, they are displacing fossil fuel-powered mopeds and small motorbikes.
They classify many ebikes (such as pedelecs) as bicycles rather than mopeds or motorbikes, depending on local rules. This exempts them from the stricter regulations that govern the certification and operation of more powerful two-wheelers, which are commonly referred to as electric motorbikes. E-bikes might be classified as a different category with their own set of laws.
E-bikes are battery-powered variants of motorized bicycles, which have been around since the late 1800s. They’re used in some bike-sharing schemes.
Can I Insure My ebike With A Homeowners Policy?
Although you may insure your ebike under your home’s policy, most homeowners’ plans do not cover bicycles unless they are stolen from your home.
This means that if they steal your bike at school or at work, they won’t compensate you. And they won’t cover the repairs if you get into an accident or damage someone’s automobile while riding.
Furthermore, most homeowners policies limit the amount you can claim if your bike is stolen. With an ebike, this might only cover a percentage of the bike’s true value.
However, some carriers will enable you to add a bike to your existing homeowners or renters policy, so check with your agent to see if this is possible.
How Do We Choose the Best eBike Insurance Providers?
To get the best ebike insurance, compare companies based on price, available coverage and discounts, deductibles, roadside help, rental reimbursement, and worldwide coverage.
Consider bonuses and coverage tailored to cyclists, such as bike store networks and roadside support. We gained quotations based on a 450,500 ebike in New York.
Otherwise, we compared plans based on advertised premiums and the availability of an online pricing service.
Is An ebike Considered A Motorized Vehicle?
The classification of ebikes as motorized vehicles differs by the state in the United States. Electric bikes, for example, are classified as motorcycles in Alabama and Alaska.
However, most states define ebikes as bicycles or electric-assisted bicycles, which means they don’t always require a license or impose a minimum driving age.
However, because of these distinctions, you should always check your state’s rules before purchasing an ebike.
What is e-bike insurance?
Electric bike insurance is specifically designed to protect your electric bicycle (or e-bike) and you, the rider. This type of coverage is relatively new in the United States, but as e-bikes get more popular, more providers are likely to hop on board.
For insurance purposes, these bikes occupy a tricky middle ground between old-fashioned bicycles and motorized vehicles like cars. Because e-bikes have pricey motor control systems and carry more risk, they need more specialized coverage than non-electric bikes.
But e-bike policies are much less expensive and complicated than policies insuring a car or motorcycle. And if you buy a standalone e-bike policy (one that isn’t “bundled” with or added to other policies from the same provider), your other insurance rates won’t be affected if you need to make a claim.
What does e-bike insurance cover?
Good e-bike insurance policies will cover the basics:
- Theft, attempted theft, or vandalism, at or away from your home.
- Accidental/crash damage.
- Vehicle contact or collision damage (including with uninsured motorists).
- Roadside assistance.
- Replacement parts (motor, batteries).
- Rental reimbursement if your e-bike isn’t rideable.
- Replacement coverage for the whole e-bike — either an equivalent model or one with the same market value.
Damage coverage will probably be one of your biggest priorities. Bikmo. an e-bike insurer in the United Kingdom (where e-bikes or “cycles” have been trendy for a while), reports their covered riders are three times more likely to make claims for accidental damage than they are for theft.
Most policies will also have some form of coverage for:
- Accessories (helmet, locks, gear).
- Third-party liability if your bike injures someone or their property.
- Damage during domestic or international travel.
- Racing or competition-related losses.
- Medical payments if you’re injured on the bike.
- Multiple e-bikes on one policy.
You can customize policies to suit your riding style, which is nice. If you just use your bike for commuting and fun, for instance, you won’t want to pay extra for racing coverage.
What doesn’t e-bike insurance cover?
As a rule, policies don’t cover:
- Normal wear and tear, or cosmetic damage.
- Removable parts/accessories stolen or damaged on their own (without damage to the bike itself).
- Claims to a bike you can’t prove you own.
- Damage when you’re influenced by alcohol/drugs.
Medical payment coverage is available as an add-on to most policies, but the amounts aren’t super high — usually a 10,000 max — so you’ll want to supplement with standard health insurance.
For added security e-bike insurance is a wise add-on
If you have recently purchased or looking at buying an electric assist bike, e-bike insurance is a wise consideration. First, check your car, renter’s, or homeowners insurance and see if the e-bike can be bundled into your existing policy. If not, look at an insurance company that often covers theft and collision protection, similar to automobile insurance, for your e-bike. Because e-bikes are a relatively new trend, there aren’t many insurance companies on the market. There are a few companies that also offer roadside assistance for bicycles and e-bikes.
From an insurance standpoint, electric assist bicycles pose a unique challenge. Most assume their homeowner’s or umbrella insurance policies extend to their e-bikes. As this is true for “human-powered” or pedal bicycles, adding a motor to the bike makes it a “motorized vehicle.” This might exclude it from coverage on standard homeowners, renters, or umbrella policy. Where you might need an insurance policy designed for the e-bike.
A good e-bike insurance policy brings added comfort.
It’s risky for your e-bike to be uninsured, and a stand-alone electric bicycle insurance policy will fit your specific needs. This will not only protect your assets but will protect your e-bike investment if it is damaged or stolen.
A good policy should offer the following protections:
- Property coverage to protect your electric bike if it is damaged in an accident or stolen
- Medical coverage for the bicyclist (yourself) in case of an accident
- A Liability clause covers any injury or property damage that you might cause to another person in case of an accident.
- And, Underinsured motorist insurance,
Please note. Unlike other types of insurance, liability insurance policies pay third parties and not policyholders.
Roadside assistance for your e-bike may be available
What do you do when stranded on the side of the road with a flat bicycle tire and can’t fix it? If you have a roadside assistance policy, they will pick you up and transport you to your home or bike shop. Along with AAA, Velosurance is another company that offers roadside assistance for bicycles and e-bikes.
Bikes, in general, are stolen often, but for a thief, stealing an e-bike is the crown jewel. With e-bikes normally, a more significant investment here is some bicycle theft prevention ideas to consider. To protect your e-bike investment, consider using a U-lock with a cable lock or bike lock alarm. You could also take the bike inside a building with you or use a mobile bike storage locker for storing your e-bike. There are also some modern ways with GPS tracking devices to help you retrieve your bike if stolen.
Types of eBike Insurance Policies
Coverage for your electric bicycle is generally available from eBike insurance companies or as an endorsement to your homeowners or renters policy.
Electric Bike Insurance Policy
Some companies that specifically insure traditional bicycles, like Velosurance and Simple Bike Insurance, have expanded their coverage to electric bicycles with motors up to 750 watts. eBike policies often carry unique perks attractive to electric bike riders, such as:
- Worldwide coverage: Your electric bike is covered while in transit and during your state in a different country.
- Taxi fare reimbursement: If you lost your ride because your eBike was damaged or stolen, your policy may reimburse you for taxi fare to the nearest transport station, repair shop or your home.
- Uninsured motorist contact protection: If you’re involved in a hit-and-run or the at-fault driver did not have insurance or limited coverage, uninsured motorist contact protection can cover your medical expenses and damages.
Scheduled Property Coverage
Scheduled property coverage is a purchasable endorsement to your homeowners or renters policy that insures your eBike for its replacement cost value. Standard policies may cover your eBike but only up to a sublimit lower than your regular policy limits.
For example, say your coverage limit for personal property is 100,000 but your insurer enforces a 450,500 sub-limit for specific items, like jewelry, antiques and eBikes. Your electric bike may be valued at 5000,500 but your home insurance policy will only cover up to 450,500.
EBike riders can add scheduled property coverage to their homeowners or renters insurance policy.
Without personal property coverage, your eBike would not be insured for its full value. Adding this endorsement to your policy would help reduce your out-of- costs when your eBike is lost or stolen due to a covered event.
Do You Need Insurance for Electric Bikes?
There is generally no federal or state law requiring electric bike insurance for eBikes equipped with motors up to 750 watts and meets the criteria for Class 1, 2 or 3 but you will want to double-check your state’s laws just in case because eBikes with more powerful motors may be subject to different regulations.
- Class 1: Motor assistance is activated when the rider is pedaling, only up to 20 mph.
- Class 2: Motor propels bicycle, only up to 20 mph.
- Class 3: eBike is equipped with a speedometer and motor assistance is activated when the rider is pedaling, only up to 28 mph.
While some states may not enforce insurance requirements for electric bikes, other requirements may apply. For example, California owners of Class 3 eBikes must:
- Be age 16 or older
- Wear a bicycle safety helmet
- Must not transport passengers
- Only ride eBike in bicycle lance
While eBike insurance is not legally required, there are several reasons to buy coverage.
Electric Bikes Have High Replacement Costs
Depending on the brand and quality, an electric bicycle can cost 3,000 and over. Electric bikes are also vulnerable to theft for their high value and expensive batteries.
Buying coverage either via an endorsement on your home or renters policy or a standalone eBike policy ensures financial protection if your eBike is stolen or damaged.
Standard Homeowners Policy May Not Be Enough
Your homeowners or renters insurance policy may offer a high coverage limit but you may not realize that your eBike is subject to a sub-limit that does not cover your eBike’s replacement cost.
Failing to understand which items have limited coverage can lead to a costly misunderstanding when filing a claim for your eBike. Adding scheduled property coverage to your home policy or buying a standalone eBike policy ensures you have the coverage you need.
Uninsured Motorist Protection
Uninsured motorist protection in a standalone eBike policy covers your losses when you’re involved in an accident with an uninsured driver who is responsible for the accident.
For example, say you’re riding your eBike and a car strikes you because they did not stop at a stop sign. You’re injured but the at-fault driver does not carry any liability coverage (which is illegal in most states but happens). Fortunately, your eBike policy has uninsured motorist coverage and will cover your medical bills, up to your policy limits.
What Kind of Coverage Comes With Electric Bike Insurance?
Depending on your insurance policy, standalone eBike policies may offer the following coverages:
- Theft
- Vandalism
- Vehicle contact protection (accident with car when sharing the road)
- Damages while in transit on an airplane, truck or car
- Taxi fare reimbursement if you are unable to ride your eBike home due to an accident
- Personal liability for injury, sickness, death or damages to others
- Uninsured motorist protection if you’re the victim in a hit-and-run or the at-fault driver is uninsured or underinsured
- eBike rental reimbursement if your insured eBike is unusable due to a covered loss or breakdown
- Permissive use (losses incurred when someone else is riding your eBike with your permission)
- Apparel and spare parts
- Global coverage
- Emergency medical costs (e.g., ambulance fees, x-rays, stitches)
Scheduled property coverage purchase via your home policy generally only covers your eBike from covered perils, such as theft and damages from fire, windstorms, vandalism and falling objects.
What’s Not Covered in eBike Insurance
Your eBike generally won’t be for the following damages or losses:
- Cosmetic damage
- Losses incurred during commercial use of your eBike (e.g., delivery or messenger services)
- Excluded perils (e.g., nuclear hazards, insects, war)
- Wear and tear
You can also purchase a standalone eBike insurance policy for added coverage.