The insurance landscape is ever-changing. As specialists in community association insurance, we strive to stay current on industry trends, so we can educate our insureds as we notice changes. One recent shift in the market that has emerged with commercial property insurance carriers is the exclusion of associations that allow the storage of electric bicycles (e-bikes) and electric scooters (e-scooters) in their buildings. The reason? The associated risk of fire caused by lithium-ion batteries. With the widespread prevalence of lithium-ion batteries in many everyday items, it may seem odd that e-bikes and e-scooters are a concern to insurance carriers.
Lithium-ion batteries have become a part of our everyday lives. They are used to power our cell phones, smart watches, tablets, laptops, headphones, electric vehicles, and more. Lithium-ion batteries offer many benefits. They can store a large amount of energy in small, lightweight packages. They have a comparatively long, useful cycle life, charge quickly, and retain their charge for a long period of time when not in use. However, they can be prone to thermal runaway, a phenomenon that can cause the battery to heat up uncontrollably and lead to a fire. Fires caused by lithium-ion batteries are difficult to extinguish and can be devastating to both life and property.
Many devices that use lithium-ion batteries are generally safe and rarely result in overheating and fires. However, as e-bikes and e-scooters have gained in popularity, an increase in these fires has been noted and has resulted in property loss and even death.
Batteries available for these devices are not well regulated. The Consumer Product Safety Commission has asked manufacturers, importers, and retailers to adhere to UL safety standards for these products. However, this request is voluntary, and some online sellers have not maintained the same quality and safety standards as others. While the rate of fires caused by batteries from larger, more established manufacturers is low, a higher rate of fires has been recorded with the use of batteries, power adapters, or cords that are not compatible with an e-bike or e-scooter’s manufacturer. These poorly-made accessories and batteries are prone to defects which can cause devastating fires.
Some carriers are choosing not to insure associations that allow these devices to be stored inside an association’s building. They may ask on a quote application if e-bikes and e-scooters are allowed. If allowed, the carrier will not offer a quote to the association. If these devices are found during a routine property inspection, the insurance carrier may issue a loss control requirement to have them removed and disallowed to continue coverage.
Insurance carriers can change their eligibility guidelines at any time. While this is not currently a widespread issue and has only affected a few of our associations so far, we predict that the presence of e-bikes and e-scooters in association buildings may become a more common exclusion from insurance carriers in the future.
If your association currently allows these devices to be stored in the building, your board may want to consider disallowing e-bikes and e-scooters inside buildings or offering an exterior storage solution.
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