Insuring Your New eBike

During the pandemic, more people can be seen out riding electric bicycles (“eBikes”) than ever before. E-bikes are a lot of fun, but there is a risk element involved. There are hundreds of bicycle accidents in San Diego each year, and eBikes are no exception. Injuries and property damage can occur, and because eBikes can travel faster, with less effort, than traditional bikes, the injuries or damage can be greater. Furthermore, eBikes are also subject to theft since they tend to be quite expensive.

What is an eBike? 

An electric bicycle, or eBike, is a bicycle that is equipped with an electric motor. In California, to qualify as a bicycle (rather than a motorcycle), the motor’s output must be less than 1,000 watts and cannot propel the bike faster than 20 miles per hour. But it gets a bit more complicated than that. California AB 1096 classifications below apply to bikes with motors less than 750 watts.

Classifications of eBikes

  • Class 1 eBikes only receive power from the motor when the operator is pedaling the bike.
  • Class 2 eBikes have a throttle and the motor can propel the bike independently (without pedals) up to a maximum speed of 20 miles per hour.
  • Class 3 eBikes are high speed electric bikes. The motor only operates with pedal assistance but can operate up to 28 mph.

Insuring an eBike. 

As a relatively new kind of vehicle, the laws surrounding eBikes vary from state to state, and so does the insurance coverage available. An important caveat is that every insurance carrier is different, and many are working to catch up.

There are basically three situations where you will need insurance:

  • My electric bike was lost or stolen. Here, your homeowner’s policy is probably not sufficient. Most policies contain per-item limits on personal property (often $1,000 to $2,000), which would only partially cover the cost of most eBikes. Because electric bikes can be very expensive, you’ll want to review your coverage with your carrier to make sure your homeowner’s (or renter’s) policy will cover the whole cost, or if you can add coverage to the policy.
  • Someone hit me while I was riding my bike. If the motorist is at fault, their automobile insurance typically will pay for damages to the bike and for any injuries. On the other hand, if the motorist is uninsured or underinsured, it becomes a bit fuzzier. Normally, this is covered under automobile insurance, but it’s not clear whether auto policies will cover uninsured motorists in collisions with bicycles. Bicycle collisions with cars often result in serious injury, and if you have one, you could be left unable to work. Disability insurance is the best protection for lost income due to a disabling injury.
  • I hit someone (or something) with my bike. Here it gets really complicated. Injuring someone else or causing property damage can cause big financial consequences, and that’s exactly the situation where having insurance coverage is important. Normally, injuries or damage you cause to someone else are covered by your homeowners or renter’s policies, and then supplemented by your umbrella liability coverage. Three underwriters our expert spoke with indicated that eBikes would NOT be covered by homeowner’s or renter’s insurance, though this may vary from company to company. If this is the case, then your umbrella policy wouldn’t cover the liability, either.

Some insurers (like State Farm) do cover electronic bikes using motorcycle policies, but this has a significant limitation as well. You have to be at least 15½ to purchase a motorcycle policy in California, so minors on eBikes will have trouble with some carriers. Other insurers, like Markel and Velosurance, offer specific policies just for eBikes. These special policies specifically cover theft, damage, injury, and other situations that may be unique to electric bikes.

So as you’re browsing the bike shops and checking out the new electric bikes, spare a few moments to think about how you’ll protect yourself and your family while enjoying that fancy new toy. It isn’t as straightforward as you might hope (yet) and some extra legwork may be involved to ensure you’re protected if something goes wrong.

About Rick Brooks

Rick Brooks, CFA®, CFP® is a partner of Blankinship & Foster LLC and is the firm’s Chief Investment Officer. He is a lead advisor, counseling clients on all aspects of personal financial management. Rick serves on several boards. He is the Chairman of the Board of Girl Scouts San Diego, and also chairs the San Diego Foundation’s Professional Advisor Council. Rick and his family live in Mission Hills. Rick enjoys spending time with his family, theater, cooking, skiing, gaming and reading.

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