However, with the onset of legislation, the potential for first and third party fraud could rise

Government officials are attempting to clear the current confusion around e-scooter usage through the use of legislation.

In November 2022, Labour member of Parliament (MP) Ben Bradshaw asked the Department for Transport what plans it had to “bring forward legislative proposals on light powered vehicles to enable the creation of appropriate legal standards for e-scooters”.

These legal standards would undoubtedly include insurance and safety requirements for e-scooters and their riders.

Katie Scott_bw_path

Katie Scott

In response, the Department for Transport’s minister of state, Jesse Norman, confirmed that the “government intends to create a low speed, zero emission vehicle (LZEV) category that is distinct from the cycle and motor vehicle categories”. 

He continued: “The first beneficiaries of this new system will be e-scooters.

“No final decisions about e-scooter regulations have been made and the department will consult publicly before any new arrangements come into force.

“A full set of findings from our evaluation of the e-scooter trials will be published in due course.”

Legislation too late?

Although it is positive news that legislation around e-scooters is on the horizon – with Carpenters Group’s head of defendant services, Faye Fishlock, believing that this legislation could come to fruition in at least a year’s time – the mismatch between lengthy legal time frames and demand from road users is causing concern for the insurance sector.

While ministers are struggling to get relevant bills passed through Parliament to enable to creation of the new LZEV category, John Reynolds – claims integrity officer, anti-fraud at the Motor Insurers’ Bureau (MIB) – told attendees at this week’s Fraud Charter roundtable (15 December 2022) that catastrophic personal injury claims are already arriving on the MIB’s desk.

Despite the fact that the MIB has already reserved around £3m specifically for claims concerning untraced and uninsured drivers involved in e-scooter collisions, Reynolds noted that a catastrophic personal injury claim submitted this week “will send reserve figures for e-scooter claims through the roof”.

The claim in question – where an e-scooter collided with a cyclist – features a young person who is now a quadriplegic.

Reynolds additionally cited another “six-figure” claim to virtual Fraud Charter attendees where a “motorcyclist was t-boned by e-scooter” – the motorcyclist was subsequently trapped under his vehicle, leaving him with disabilities.

Claims involving e-scooter and pedestrian collisions have been lower in frequency, however common injuries arising from these cases include fractures and facial scarring – Reynolds noted that facial scarring claims from young, female claimants, for example, could prove to be “expensive” for the industry.

“[Claims] are happening unfortunately,” Reynolds added.

Fishlock agreed that vulnerable road users certainly seem to be most at risk of being involved in e-scooter incidents, however she noted that unlike other countries, the UK does not have dedicated cycle or e-scooter lanes, which could be contributing to the problem.

She said: “That is where we are going to see the bigger claims coming because they’re very vulnerable individuals just by the nature of what they are doing on the road.”

Fraud potential

Reynolds’ feedback indicates that substantial claims around e-scooter collisions are unfortunately becoming more commonplace and without the necessary LZEV category and associated legislation, the protection of insurance for injured parties is sadly lacking.

Carpenters Group director, Donna Scully, noted: “It’s such a difficult area. In terms of legislation, it’s not going to be tomorrow.”

Legislation is clearly sorely needed now to clarify exactly what insurances private e-scooter owners and riders need and what safety measures will be legal obligations, such as wearing a specific type of helmet – this will not only help support the MIB by sharing the personal injury claim burden with motor insurers, but it will also help to protect insureds and ensure they get relevant treatment and support, if needed.

On the flip side, however, legislation could lead to an increase in potential fraud. Fishlock said: “There certainly seems to be things that could be coming in terms of both first party and third party fraud, but it’s going to be a while yet before we’ve got the necessary legislation.”

The current cost of living crisis could also be a consideration. If legislation passes through Parliament quicker than expected and private e-scooter insurance becomes mandatory, how many owners will actually take it out bearing in mind some Brits are cutting insurance spending to reduce outgoings?

As usual, the rise of e-scooters is seemingly throwing up more questions than answers. But the noted uptick in more severe personal injury claims involving vulnerable road users is worrying. The insurance industry will need to keep a close eye on developments here.