Halfords warn of insurance threat to e-bikes

26 July 2017   By Thomas Henry

BICYCLE retailer Halfords have warned that e-bike owners may be forced to take out mandatory third-party insurance, costing them just over £100 per year.

e-bike rider
Source: pexels.com/Stocksnap

The threat derives from a ruling made by the EU Court of Justice in 2014, which effectively states that "some non-road-traffic motoring activities must be covered by third party liability insurance".

Given that this applies to e-bikes, Halfords worry that it would put a damper on the impressive rise in popularity e-bicycling is currently witnessing, with as many as 4% of all adult bikes currently sold in the UK being electrically assisted.

However, the UK Government are currently entertaining the possibility of "derogating" vehicles such as e-bikes from the insurance requirement, meaning that - so long as electric bikes are found to be safer than cars - owners of electrically assisted bicycles won't be obliged to take out insurance.

Profits and health

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According to Halfords' own research, as many as one in 15 bicycles sold in the UK could be e-bikes in the "near future", equalling an extra 320,000 cyclists on Britain's roads.

In fact, their projections are potentially more optimistic than this, since if e-bike use increases among over 65s at the expected rate, then there would be an extra 140,000 people on electric bikes in the coming years.

Obviously, this would be a good thing for Halfords, since they're in the business of selling e-bikes, which cycling enthusiasts will already know are considerably more expensive than most ordinary bicycles.

That said, it would also be a considerable boon for the nation's health, largely because electric bikes are being increasingly seen as a gateway to physical activity, or to getting back on the saddle for the first time in years.

The Vnuk Judgement

Yet worryingly for pedal enthusiasts, recent developments in the European Union look set to threaten the heartening rise in e-bike popularity.

That's because in 2014, a case heard at the EU Court of Justice resulted in what is now known as the "Vnuk judgement".

This was named after the unlucky Slovenian agricultural labourer who was knocked off a ladder by a reversing tractor, and it ultimately means that a 2009 EC directive on motor insurance now has to be extended [PDF] "beyond the range of motor vehicles
which are used on roads or in public places".

And as the Government themselves acknowledge in their consultation [PDF] on the matter, if the judgement is interpreted in the UK as originally intended, then "electrically assisted pedal cycles" will require their users to take out insurance.

Derogation and premiums

This possibility has horrified Halfords so much they've enlisted Victoria Pendleton's (pictured below) help. As the bike seller's Cycling Director, Simon Irons, said, "Anything that makes cycling less accessible is a real concern".

Victoria Pendleton

Former Olympic, European and Commonwealth cycling champion Victoria Pendleton. Source. Halfords

Halfords predict that, if interpreted to the letter, e-cyclists will have to pay around £100 a year to get themselves covered. And as in the case of increasingly expensive motoring premiums, this would potentially result in less people using bikes, with unfortunate consequences for physical and even social mobility.

However, despite Halfords' concerns, there's a good chance that the Government won't interpret the new EU legislation to include electric bicycles.

That's because the Government's consultation asked respondents (such as Halfords) whether there's "a lower likelihood of damage arising from an electrically assisted pedal cycle than from a car, that would lead us to adopt a less rigorous approach to enforcement".

Here, the Government are looking at the possibility of "derogating" electrically assisted bikes from the requirement, something which Halfords and other trade bodies are urging them to do.

This would mean that cyclists wouldn't be obliged to insure their e-bikes, yet given the nature of the EU legislation, people who were hurt by an e-bike would still be entitled to compensation from the Motor Insurance Bureau.

Will motorists pay?

As such, the question of whether e-bikes will be derogated or not will turn on just how likely it is for them to be involved in accidents that require compensation to be paid out.

Because if they are involved regularly in cases requiring compensation, then derogation would mean that other road users - e.g. motorists - would have to cover the costs of payouts, which would again add to the already hefty premiums being paid by drivers.

And while there isn't much data on e-bike accidents in the UK, studies conducted in Israel and Switzerland suggest that e-bikes have been linked to a growing number of traffic-related accidents.

Admittedly, these studies don't provide absolutely conclusive proof that e-bikes are more dangerous than conventional bicycles, yet they do at least suggest that, even with the option of derogation, e-bike riders may have to pay to stay on the road in the not-too distant future.

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