Thousands of e-bikes and drones not covered by insurance

Kiwi electric bike and drone owners are being warned to check their insurance policies as one expert cautions the industry hasn’t kept pace with new technologies.

Simon Moss, partner services manager of NZbrokers, one of the country’s largest insurance brokerage groups, says analysis of home contents policies found significant complexity and variation in wording – leaving many e-bike and drone owners unexpectedly without cover for loss, damage or third-party liability.

“When consumers purchase this type of technology they tend to think of it as they would for a model aircraft or push bike – as they are seen to perform the same function,” Moss says.

“The insurance company is looking at it very differently, however – while they may cover your $5000 push bike, many will not cover your e-bike of the same value because of terms in the policy or the legal status of your e-bike.

“Similarly, a drone may be treated by insurers as a type of aircraft if it is capable of lifting more than its own weight – a criteria which is impossible for most consumers to measure.”

Moss says this means a drone may be covered for loss if dropped while getting it out of the vehicle, but may not be covered if it falls from the sky.

“From the insurers perspective, drones and e-bikes are an unknown risk and until they have an accurate picture of that risk they will tend to act conservatively,” Moss says.

New Zealand now has about 40,000 e-bike owners, Statistics NZ estimates.

Moss says once insurers see a claims trend it is likely that more exclusions and conditions will be applied to e-bikes and drones.

He says some policies will not cover e-bikes and drones while others will set maximum standard limits but will include third-party damage.

Moss says while there are no e-bike specific policies on the market, some insurers are starting to offer better cover for drones.

“Drones have a number of commercial applications and so we are seeing what amounts to mini aviation policies coming on the market now, but there are limited options for private or hobby drone users.”

Consumers concerned about the level or type of cover they are receiving should consult a broker.