Insuranse rejects a claim on the basis that e-bike is a motorized vehicle.

Sparky731

Active Member
Region
USA
City
Madison, WI
It appears motorized land conveyance is not defined. I assumed it was a reference to "conveyance" (transport) on "motorized land" but after looking at this judgement it seems to refer to "motorized" vehicles that provide "conveyance" (transport) on "land" (as opposed to water, air, etc.):


Going back to the adjuster's reply:



After re-reading this, it seems their issue is not simply throttle. They seem to be saying it's a motorized land conveyance because it is equipped with a motor that can be used to exclusively propel the bicycle. Under the same logic walk mode would make a class 1 ebike a motorized land conveyance.

I would counter that bike is deemed to be a non-motorized vehicle (under state law) and furthermore that you can propel it without motor assistance (does not rely solely or exclusively on assistance of the motor or throttle).
aren’t the words “… used to exclusively propel…” the crux of the Class 2 issue? The motor cannot exclusively propel class 1 or class 3.
 

TomD

Well-Known Member
Walk mode can exclusively propel class 1/3. So technically, if anything that allows the motor to exclusively propel an ebike makes it a motorized land conveyance, they could exclude class 1/3 as well (assuming the ebike has walk mode, some do not, but that is the exception to the norm). I guess it comes down to what defines "motorized". In the Michigan judgement I linked above, they actually brought up the issue of ambiguity. Where there is ambiguity the meaning that favors the insured is adopted. In the adjuster's reply, they seem to be saying the definition of motorized depends on whether the vehicle can be "exclusively propelled" by the motor. Nowhere is this stated in the policy. The policy does use the phrase "designed to be operated solely by use of the power from the electrical system of motor vehicles". That wold apply to a bike without pedals that is solely powered by throttle, as opposed to an ebike with pedals NOT designed to to be operated solely by use of throttle or motor, but can be pedaled. Note also in the Michigan judgement they relied on the definition of motorized from two different Michigan laws that define a tractor as a motor vehicle. Compare to the OP's situation where California laws defined class 2 as non-motorized. As such, I think the insurer is on shaky ground given the ambiguity.
 

TomD

Well-Known Member
adjuster says that e-bikes with a throttle are considered a motorized vehicle and there is an exception for those in my policy

Did the adjuster ever point to the specific exception in the policy? Seems as if they are saying an ebike with pedal assist would be covered, despite having a motor. When terms aren't defined in a policy, courts have held they must be given their ordinary (as opposed to technical) meaning to achieve a practical and fair interpretation considering the policy as a whole. The insurer might argue the "ordinary" meaning of "motor vehicle" is as simple as a vehicle with a motor. However, they (indirectly) seem to be saying pedal assist with motor would be covered, so cannot claim the ordinary meaning of "motor vehicle" is a vehicle with a motor, otherwise they would be treating other customers with class 1/3 ebikes differently than you. By their own (technical) interpretation, and likely in practice if they have paid claims for class 1/3 ebikes, they have set precedent that the definition is something other than "vehicle with a motor", not only ambiguous, but also in conflict with state law. I would be sure to point this out in your complaint to the commissioner.
 

Nutella

Active Member
CA ebike law doesn't state that ebikes aren't motorized for the record, it clearly states that ebikes have motors. It does allow them to ride most places that bikes can, and not have to be treated like a motor vehicle though, which is the key to everything good.


I think your best argument is that your ebike isn't solely powered by the motor since you can also pedal it.
 

TomD

Well-Known Member
Good point. I assumed non-motorized language was in there. The insurer does seem to be conflating "can be exclusively propelled" and "designed to be operated solely by" to support their denial. The latter is in the policy, but not the former (at least not in the portion provided by the OP).
 

m@Robertson

Well-Known Member
Region
USA
Both of these are true in this situation described in the OP.
".. An adjuster says that e-bikes with a throttle are considered a motorized vehicle and there is an exception for those in my policy. I did some quick research and some articles saying that e-bikes are treated as usual bikes by California law."
I will take the second part first. Class 1, 2 & 3 eBikes are just bikes in California and not motor vehicles. The problem here is that yours did not fit into those classes, so it is not a bike in-law. Your conveyance was designed so that it could be operated for example with a broken or missing chain or broken or missing pedals or gears, at speeds over 20Mph. In other words, it could be operated without pedal power at those higher speeds. To quote the policy exclusion, a conveyance "that is designed to be operated solely by use of the power from the electrical system.." The problem is that the "bike" was left unlocked. To quote you, "class 2 by default with unlock." It is the unlock that turned it into a motor vehicle, letting the insurance company off the hook. I am sorry for your loss.
As someone who is deeply involved in the business, including actually writing insurance policy language and getting that language approved by the relevant regulators, I disagree. We've already seen the language cited by the carrier as disqualifying. That specific language is not being applied correctly (the vehicle is not designed to be used "solely by throttle" etc as has been discussed in detail above).

The vehicular designations you describe are irrelevant as they are not enumerated in the policy. If, as an insurance carrier, you want the California Vehicle Code to be relevant you have to expressly refer to it and its relevant parts - although typically this isn't going to be allowed and you would have to expressly reference all contract language directly in the policy. As such, since none of that is in this policy (and we have already seen the underwriter's express denial and the contract language he has used in that denial) and since its not in the policy, its not a part of the coverage decision.

It really is as simple as them misusing that one sentence in 3.b.
 
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m@Robertson

Well-Known Member
Region
USA
All:
Here's the policy language again, snipped from the original post. I think a lot of you are using the word "used" in your heads when thinking this thru, when the policy uses the term "designed to be operated" which makes for a very different definition

PROPERTY NOT COVERED
Item 3. is deleted and replaced by the following: 3. Motor vehicles or all other motorized land conveyances. This includes:
a. Their equipment and accessories; or
b. Electronic apparatus that is designed to be operated solely by use of the power from the electrical system of motor vehicles or all other motorized land conveyances


I have highlighted only the words that matter. You can ignore everything else.

"Designed to be operated solely" in particular is crucial. That means the bike is designed to exclusively use electrical power. "Solely" can be interchanged with 'exclusively' and as noted previously, thats NOT the OP's vehicle, which was designed to be operated via more than one method. Ergo... it does not fit into 3.b. Ergo it is not excluded in 3.b. Ergoergoergo its INcluded. There's no gray area here.

On the policy language alone, this is an easy win for the consumer. Whether the carrier will give up without a regulatory fight is another matter but I get the feeling Compliance will take one look at this if the fight gets up to them they will shut this down and cave before the CA DOI gives them a Tyron Wooley.

You *could* look for the definition of "motor vehicle" in the policy Definitions section, but we know that its not a defined term to be referred back to in a Definitions seciton because its not in quotes. Further, if its not expressly defined in Definitions, then nothing external (like vehicle codes or whatever) can be used to further that definition, so references to case law etc. do not apply here. At most you can point to a common, reasonable understanding of what a motor vehicle is to try and define this bike as a motor vehicle... which we already know is not inherently disqualifying thanks to the specifics found in 3.b.
 
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TomD

Well-Known Member
To be fair, I think that portion bolded in red is intended to clarfiy / exclude motorized things that are actually part of the motor vehicle, as opposed to personal property in the vehilce. For example, a boom box with cassette motor stolen from a car (covered by homeowners policy) vs. in dash radio with cassette (covered by auto policy).

I'm still scratching my head as to why they would cover class 1/3 ebikes. I don't have a geico policy but did find this sample online. The relevant section does seem to be captured by the adjuster but here is an entire policy:


I would think "all other motorized land conveyances" would encompass all bikes with a motor (using ordinary definition). Maybe we are jumping to conclusions that class 1/3 ebikes are covered by geico? I know the adjuster implied something different in the denial but I think an oridnary definition / whole policy view would exclude all ebikes.
 

scrambler

Well-Known Member
Region
USA
City
Bay Area, CA
I recently asked Geico if they insured electric bicycles, and their answer was a clear NO
 

m@Robertson

Well-Known Member
Region
USA
I recently asked Geico if they insured electric bicycles, and their answer was a clear NO
Not at all surprising.

Insurance is regulated by state and policies can vary by state as well. that can mean different answers to the same question. In fact, if your insurer is AAA then if you are in SoCal you have one AAA insurance company and a whole different one in the rest of the state. So its possible to have one 'company', but more than one answer even in the same state.
 

TomD

Well-Known Member
I recently asked Geico if they insured electric bicycles, and their answer was a clear NO
To clarify, did you ask if your homeowners policy provided any coverage for your electric bicycle, or were you asking if you could get a separate insurance policy for liability, property damage, theft, etc.?
 

scrambler

Well-Known Member
Region
USA
City
Bay Area, CA
I was looking for a separate insurance just for the bike, after AAA (my main insurance) told me that after all, the bike would NOT be covered by my Homeowner policy.

I also asked if they would insure an electric Moped, and they did say they may be able to do that.
I have sent a Moped registration form for the bike to the DMV, and will see if they will process it...
 

m@Robertson

Well-Known Member
Region
USA
You know, in looking at that policy language that I linked above, its just plain worded badly for ebikes as it CAN be used to exclude ALL ebikes.

I am sure the language pre-dates the existence of ebikes, which is why its a rotten fit in the first place. FYI to the peanut gallery: Nobody in the business wants to "re-file" an insurance policy to update it. The problem with bringing a policy to a regulator at all is then they have license to go over every word, sentence and placement of every comma and semi-colon and object to anything they want to in your policy... anywhere. The experience a company goes thru can vary dramatically depending on which analyst looks at it. I have just finished a major project where we did identical form filings for two different companies just one year apart with almost zero changes in local legislation and we went thru absolute hell in some states for no reason other than we were sitting in front of a different regulatory analyst scrutinizing the policy language.

So... when things change, a company will try to make do as they have done here.

Follow that red-highlighted text above with me

Electronic apparatus ...

That doesn't mean the bike, necessarily. That can mean the motor since we are not talking the vehicle, but its electronic apparatus (parts)

... that is designed to be operated solely by use of the power from the electrical system

Well hell. A motor is always operated solely by electrical power. Its not like the pedals are a generator.

So. If the Claims dept wanted to split hairs they could go that route and forbid all ebikes.

They don't want to do that. First, because they will certainly be shown by correspondence (and paid claims) to be covering many ebikes. Second, a regulatory review would never let that microscopic definition fly. Never. In the 1990's maybe you could play that game if you were a carrier trying to screw somebody. But sure as hell not in 2021 and not in California. Probably not anywhere in this day and age. But still, just in this customer's example alone there is correspondence on record defining what kind of ebike is included and excluded... so they can forget about pretending they don't cover them at all.

All this points to a seat-of-the-pants judgment call that can be swept aside with a little determination and elbow grease on the part of the insured.
 

TomD

Well-Known Member
3a and 3b are defining items considered to be part of a motor vehicle or motorized land conveyance and thus excluded with the motor vehicle. In 3b they append 'of motor vehicles or all other motorized land conveyances" so clearly they are defining a subset of what is already deemed a motor vehicle.

As you say, makes sense why they never added ebike specific language. If they have paid ebike claims it puts them in a hard position to argue out of, I'm just not convinced they have, no experience in that regard, I come from a life insurance industry background.
 

PedalUma

Well-Known Member
Region
USA
You know, in looking at that policy language that I linked above, its just plain worded badly for ebikes as it CAN be used to exclude ALL ebikes.

I am sure the language pre-dates the existence of ebikes, which is why its a rotten fit in the first place. FYI to the peanut gallery: Nobody in the business wants to "re-file" an insurance policy to update it. The problem with bringing a policy to a regulator at all is then they have license to go over every word, sentence and placement of every comma and semi-colon and object to anything they want to in your policy... anywhere. The experience a company goes thru can vary dramatically depending on which analyst looks at it. I have just finished a major project where we did identical form filings for two different companies just one year apart with almost zero changes in local legislation and we went thru absolute hell in some states for no reason other than we were sitting in front of a different regulatory analyst scrutinizing the policy language.

So... when things change, a company will try to make do as they have done here.

Follow that red-highlighted text above with me

Electronic apparatus ...

That doesn't mean the bike, necessarily. That can mean the motor since we are not talking the vehicle, but its electronic apparatus (parts)

... that is designed to be operated solely by use of the power from the electrical system

Well hell. A motor is always operated solely by electrical power. Its not like the pedals are a generator.

So. If the Claims dept wanted to split hairs they could go that route and forbid all ebikes.

They don't want to do that. First, because they will certainly be shown by correspondence (and paid claims) to be covering many ebikes. Second, a regulatory review would never let that microscopic definition fly. Never. In the 1990's maybe you could play that game if you were a carrier trying to screw somebody. But sure as hell not in 2021 and not in California. Probably not anywhere in this day and age. But still, just in this customer's example alone there is correspondence on record defining what kind of ebike is included and excluded... so they can forget about pretending they don't cover them at all.

All this points to a seat-of-the-pants judgment call that can be swept aside with a little determination and elbow grease on the part of the insured.
What if they tried getting out of paying for one of these?
1640044719466.png
 

BlackHand

Well-Known Member
Region
USA
City
Western WA
What if they tried getting out of paying for one of these?
View attachment 109712
That is covered by the exclusion to the exclusion in the policy language:

We do cover vehicles or conveyances not subject to motor vehicle registration which are:
a. Used to service an "insured's" residence; or
b. Designed for assisting the handicapped;
 

john peck

Well-Known Member
Using a lawyer will likely cost more & waste a lotta time. Insurance cos. can drag this stuff out for ages.
Buy a new bike & move on. Sorry for your loss.
 

john peck

Well-Known Member
Using a lawyer will likely cost more & waste a lotta time. Insurance cos. can drag this stuff out for ages.
Buy a new bike & move on. Sorry for your loss.
Here´s the thing, yes in terms of use Cal. may regard them as bikes, but the clause
excludes bikes with motors. Your bike had a motor; you´ve got no case & a lawyer
would charge to tell you that.
 
Region
USA
Not a GEICO fan. Time for a change?
At your suggestion, I contacted my insurance agent to confirm coverage for my Allant+ 8s E-bike. My bike is scheduled on my homeowners policy and my annual premium is about $60. My agent said in the event the bike is stolen, I have full replacement cost with no deductible. In addition, and most importantly, I have liability insurance should I injure someone through my neglect up to $1,000,000. My homeowners would also pay to repair or replace my E-bike should I be involved in a collision. I live in Michigan.
 

scrambler

Well-Known Member
Region
USA
City
Bay Area, CA
At your suggestion, I contacted my insurance agent to confirm coverage for my Allant+ 8s E-bike. My bike is scheduled on my homeowners policy and my annual premium is about $60. My agent said in the event the bike is stolen, I have full replacement cost with no deductible. In addition, and most importantly, I have liability insurance should I injure someone through my neglect up to $1,000,000. My homeowners would also pay to repair or replace my E-bike should I be involved in a collision. I live in Michigan.
What insurance do you have?