How Do You Insure a Scooter Anyway? New Mobility Options’ Opportunities and Challenges for Insurance Carriers

New mobility options, such as on-demand scooters and bicycle-sharing operations, are popping up in cities all over the world. As these types of mobility options proliferate and use grows, accidents and injuries are sure to follow, resulting in property damage and liability claims. Unfortunately, the existing marketplace for this type of situation is murky at best.

Will your existing auto insurance cover you if you are using a bike-sharing program for 30 minutes? What about when you rent an electric scooter and use it on sidewalks? What if you do not have auto insurance or own a vehicle? Who is responsible for providing insurance, and how do you protect yourself? 

This situation provides some opportunities in the insurance industry for existing carriers as well as potential new entrants in the insurance space.

  • Consumers with auto insurance need to have an option to add coverage for these types of mobility devices. Existing auto insurance carriers will need to re-evaluate their existing processes in order to capture this emerging opportunity.
    • Underwriting processes must focus on new data points, using real-time data collection, artificial intelligence, and cloud computing to properly evaluate risk in each circumstance.
    • Claims processing must also change to become more dynamic and customer-centric. The entire claims process must be reimagined to become faster and more customer-friendly.
  • For those who do not own a vehicle, the situation involves securing new coverage just for those times that a bike or scooter is used. Companies can use these situations as an opportunity to rapidly build a customer base through the creation of an easy-to-use short-term insurance program aimed specifically at alternative mobility options. 
    • Underwriting for these situations could include a standard model that changes as more data is collected on each customer, resulting in a unique “rental customer” score to determine rates.

Insurance carriers have an opportunity to create the market for mobility insurance on their terms and use that to gain experience with new underwriting techniques and claims processes. With the mobility market changing rapidly and new challenges, such as autonomous vehicles, on the horizon, insurance carriers cannot afford to miss out on any chance to grow and develop their businesses.

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