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

[MaxNevermind]

Hi all,
My bike was stolen a week ago in Cupertino, CA I have a home renters insurance from Geico which is supposed to cover personal property theft no matter were that happened, the only problem being is that 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. Can I do anything about, anybody knows?

 

[arcom]

CA Law regarding what constitutes an eBike. Might want a lawyer for more help.

 

[m@Robertson]

I don't doubt the policy has an exception for motorized vehicles. But as pointed out above, a Class 2 ebike has a throttle and is NOT classified as a motorized vehicle... its a bicycle. You can take this to your adjuster and - if they don't play ball, make sure they know you a) want to see the exclusion in writing and b) want to see the exclusion specifically INclude class 2 electric bicycles as defined under the CA vehicle code. If the Company has a policy of considering them motorized vehicles, that is an opinion that can either be accepted... or not. The Company can reverse their decision sice its a company practice - unless the policy expressly says something like "if it has a throttle then screw you we ain't paying." i.e. the exclusion is written describing the vehicle's specific characteristics and does not rely on how the vehicle is classified under the motor vehicle code.

Be sure to let them know that if they are not in full compliance with CA law and the terms of the policy you will be filing a bad faith complaint with the CA Dept of Insurance. The words "bad faith" and "compliance" are trigger words in the insurance industry and signal two things the insurance company wants absolutely no part of: Being out of compliance, and being subject to a bad faith claim against them.

All of the above assumes the bike with the throttle can be described as a Class 2 via its performance characteristics. I'll leave that to you to determine. And again if the policy excludes via characteristics like 'throttle = no coverage' or for another wacky example 'bike rack = no coverage' then they are within their rights to exclude because they are obeying the terms of the contract expressly. As a general rule when it comes to coverage interpretations the benefit of the doubt is always going to be found for the consumer and the Company knows this. they also know the CA DOI is slow as molasses so they may play hardball with you.

 

[MaxNevermind]

So, I've already asked an adjuster about the specific place in the policy that describes such an exception, here is the reply:

Policy quote:
SECTION I - PROPERTY
COVERAGES
COVERAGE C - Personal Property
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. Electronic apparatus includes:
(1) Accessories or antennas; or
(2) Tapes, wires, records, discs or other media; for use with any electronic apparatus described in this item 3.b.
The exclusion of property described in 3.a. and 3.b. above applies only while the property is in or upon the vehicle or conveyance.
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;

Adjuster reply:
As the e-bike listed on the claim is a low-speed, throttle-assisted bicycle equipped with a motor that can be used exclusively to propel the bicycle, and not merely a pedal assist, we consider this to be a motorized land conveyance.

 

[arcom]

Not a GEICO fan. Time for a change?

 

[scrambler]

Just before I got my e bike, I had asked my insurer (AAA) if my expensive electric bike would be covered for theft and liability by my homeowner property and liability coverage policy, and they had said yes.
After buying the bike and then hearing some conflicting answers on this subject, I emailed my agent and asked them if they could confirm what he had told me in writing to avoid any misunderstanding.
A week later, he answered that in fact at this point AAA did not know what to do with electric bikes, and so that an adjuster could reject the claim considering it a motorized vehicle and therefore I should look elsewhere to be sure and until they decide what they want to do about it.

Because my bike is over the e-bike power limit of 750W, I am looking into getting it registered as a moped, and then insuring it as a Moped. One of the companies I contacted was Geico, who said they do not insure e-bikes, but they may be able to insure an electric Moped.

To be continued....

But if anyone is assuming their e-bike is covered by their Homeowner insurance policy, I would advise to have them confirm it in writing...

 

[AHicks]

Ask to talk to this nut case's boss/supervisor. Do what you need to do to have your case escalated/reviewed. "We consider" sounds a lot like "we are guessing", and is NOT an absolute written part of the policy. It's an interpretation made by some pond scum sucking adjuster looking for a pat on the back for scamming you out of a settlement. Stick to your guns! Demand something in writing that SHOULD have been available when you bought the policy.

 

[TomD]

Let them know you'll be filing a complaint with the CA insurance commissioner. I'd be shocked if that doesn't light a fire under someone's arse. Last thing a property & casualty insurance company wants to do is deal with a state insurance commissioner complaint, especially if they are in the wrong.

 

[rich c]

I've read lots of people claim their homeowner's policy covers their eBike, until they make a claim and the small print is explained to them. Strong research is definitely required.

 

[rich c]

Let them know you'll be filing a complaint with the CA insurance commissioner. I'd be shocked if that doesn't light a fire under someone's arse. Last thing a property & casualty insurance company wants to do is deal with a state insurance commissioner complaint, especially if they are in the wrong.

I doubt it, the policy says it's not insured. Another reason not to have a throttle.

 

[TomD]

Contracts can say whatever they want, it doesn't make the terms enforcable per se. Also, if the policy doesn't specifically indicate that having a throttle makes it a motorized vehicle, not sure how they can make up that definition on the fly, particularly if CA law defines class 2 ebikes with throttle as non-motorized vehicles.

It would be one thing if the adjuster said it's not covered because it has throttle and can be assisted beyond 20mph, thus not a class 2 ebike but a motorized land conveyance. However, they seem to be saying that mere existence of throttle makes it a "motorized land conveyance" which is just a fancy term for vehicles designed for recreational use off public roads. In your complaint stay away from the gray area if it's a hybrid class 2/3 vehicle.

Edited to add: don't claim it's something it isn't either. That would be insurance fraud. Just focus on points that make your case (throttle does not make it a motorized land conveyance).

 

[Pulsar]

File a complaint with the state insurance board, then take them to small claims court. The cost of doing that is typically minimal and it certainly looks like your insurance company is on flimsy ground here for ebikes are not specifically excluded or clarified as being a motorized vehicle so I think you have a good chance in front of a judge. I think all of us need to talk to our agent and get clarification in writing. I don’t pay extra for specific homeowners coverage for my agent told me under my personal property clause my bike is covered after deductible is met if something happens to it while on premises. I also don’t like Geico for my car got hit by their policy holder and getting it fixed the way I wanted with new OEM parts instead of using filler and bondo was a PITA with them. Ultimately I got my way after much argument.

 

[m@Robertson]

Looking at the policy language, they are making a coverage determination via language that is not entirely clear-cut. The magic words are in 3.b. where it talks about a vehicle 'designed to be operated solely by use of the power from the electrical system

They are saying your throttle makes the bike possible to use without pedal assist. Thats not the same as designing the bike to use both, which is what a Class 2 bike is. 'Capable of being' is not the same as 'designed to use solely'. A Class 2 is a dual use design. Not a sole use..

No... reading this again its clear cut. "Designed to be operated solely by use of the power" is cut and dried. Thats a moped with footpegs and no pedals. Period. Using that clause to deny a Class 2 is in express violation of the policy language.

As I noted above, let them know you consider this interpretation unacceptable in light of it not truly reflecting the contract language, and that you will be proceeding with a bad faith claim against the carrier should they stick to their story.

Relevant to this: Did the company know in advance they were insuring an ebike? If they did (say, at the time of the application) and failed to ask for details thats bad for them.

FYI I work in the insurance industry and am a licensed agent in 40-some-odd US states. part of my job has been in interpreting language for policies, along with writing same for programs we offer nationwide. I'm not a lawyer, but I work in this business at the policy-creation and company level (not just sales) and you have grounds to at LEAST have regulators look at this and decide if GEICO's actions are appropriate and considered in good faith by CA DOI.

 

[BlackHand]

It looks like 3a and 3b are so you can't make claim for your Blaupunkt stereo and Van Halen tapes after your car gets broken into outside your apartment.

 

[Martinet]

Insurance companies are wary of " bad faith" claims because it opens them up to punitive damages generally in jury trials. Agree you should ask for written specifics of denial. If still denied have an attorney write a letter citing local law and intention to seek actual and punitive damages unless a reasonable offer is made.

 

[AHicks]

Insurance companies are wary of " bad faith" claims because it opens them up to punitive damages generally in jury trials. Agree you should ask for written specifics of denial. If still denied have an attorney write a letter citing local law and intention to seek actual and punitive damages unless a reasonable offer is made.

 

[m@Robertson]

A bad faith complaint made to a DOI carries a lot of weight. An insurance company found to be in bad faith by a regulator in a business as highly regulated as personal lines insurance is in deep s*it; potentially facing a market conduct review that focuses squarely on coverage denials and fines and consent decrees that multiply as other victims are uncovered. Realistically, in CA thats unlikely to happen but it could, and something like this is abolutely NOT what the Compliance people in a company want to allow anywhere near them. Right now you are talking with the Claims dept. Threaten bad faith and you will get reported to Legal and Compliance and in my experience you are dealing with an entirely different mindset within the company.

I think you can do this entirely without an attorney, whose letter-writing is going to cost you near what the bike did. Ratchet up the pressure incrementally - and without cost to yourself for as long as you can stand to do it.

 

[DaveMatthews]

Nope...
This does not define your class 2 ebike, as m@Robertson has stated.
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.

 

[PedalUma]

What was the bike? Do you have photos and specifications? Was it a two-kilowatt, unlawful beast? Or was it legally just a bike?

 

[MaxNevermind]

Here is a link to it on bikeindex. It was 2021 Juiced Bikes RipCurrent S(750W - class 2 by default with unlock to class 3).