Companies have exited entire markets because of it. Founders raising money reference it in pitch decks without fully understanding it. And for most operators, it is one of the least visible line items eating into their margins every single ride. Insurance in micromobility is a topic that does not get enough serious attention, and this episode of the Micromobility Podcast changes that.

Host Prabin Joel Jones brings on Brandon Schuh, Senior Vice President and Head of Specialty Insurance at Christensen Group Insurance, a 100% employee-owned brokerage that has been inside the micromobility world since 2019. Schuh has seen the market get it badly wrong and slowly get it right, and he lays out exactly what that journey has looked like in numbers.

From five cents to thirty cents a ride

A McKinsey report widely circulated among operators and investors in 2019 put insurance at roughly five cents per ride, with a projected profit of 70 cents per ride if the business was run well. That picture has changed significantly.

Schuh estimates that a large operator like Lime is paying closer to 10 cents per ride today. Smaller operators with fewer resources face costs of 20 to 30 cents per ride, representing serious margin compression given that the average ride is roughly a mile and a half and around 15 minutes long.

The early mistakes

The first policies written for operators like Bird and Lime were structured on projected revenue, which turned out to be a poor measure of actual risk. Deductibles were very small, sometimes as low as $1k to $2.5k, which meant operators routinely filed claims for $10k or $20k events that should have stayed off the insurance books. The carriers writing those early policies are largely no longer in the space.

The fix, according to Schuh, was structural. Deductibles swung dramatically in the other direction, moving to $100k or $250k. Pricing also shifted from revenue-based to mileage or minutes-based, starting around 2020 and 2021, which gave underwriters a far more accurate picture of exposure.

How premiums are calculated

At the center of every premium is the loss ratio, which is the ratio of claims paid or reserved against premium collected. Carriers generally want a loss ratio at or below 40 to 50%. On a $100k policy, that means annual losses should stay below $50k.

Reserves are treated the same as paid claims. If a carrier believes a claim will settle for $100k, that $100k reserve is treated as already spent on the balance sheet. This is why operators with large deductibles and clean loss histories command lower premiums. They absorb the small and mid-sized claims themselves, protecting the insurer's loss ratio.

The social inflation problem

While micromobility-specific pricing has stabilised, the broader casualty insurance market is being pushed up by what the industry calls social inflation. Jury verdicts are increasing at 6% to 10% annually, far above standard inflation of two to three percent. Nuclear verdicts, defined as verdicts over $10m, are growing. Thermonuclear verdicts, those above $100m, have roughly quintupled in the past two years and are now growing faster than nuclear verdicts. This creates upward pressure on premiums across the entire casualty market.

Battery fires

The shared mobility sector has largely brought battery fire risk under control through charging lockers, battery swapping, and reduced rebalancing trips. New York's push for UL certification set a meaningful standard. The direct to consumer segment is still catching up, though the CPSC mandating certification is helping. General liability policies have increasingly added exclusionary language and sub-limits around battery fire claims, pushing that risk toward dedicated property policies instead.

The practical consequence for operators leasing commercial space is already visible. Landlords in New York have been returning to micromobility tenants requesting offsets of up to $2m because their property insurance jumped following a fire incident in the building.

The New Jersey problem

New Jersey recently introduced requirements that treat an e-bike like a motor vehicle for insurance purposes. Schuh is blunt about the consequences. A minimum platform premium just to insure a fleet under these rules is likely to start at $100k, with only around two carriers currently willing to write that coverage. For gig workers who own their own bikes and do delivery, the insurance cost per ride could exceed the revenue earned on that ride. Schuh estimates that for New Jersey-specific operations, the insurance premium could represent more than 10% of gross income from that geography alone.

Delivery platforms that do not own bikes directly, like DoorDash, are somewhat insulated. But operators who own fleets or workers who own their own bikes bear the full cost. If other cities follow New Jersey's model, Schuh believes it could trigger a domino effect that meaningfully reduces delivery options in affected markets.

Europe and the small operator problem

European insurance requirements are fragmented and often extreme. The UK requires unlimited liability motor third party insurance for scooters, which makes finding reinsurance close to impossible for a carrier writing only UK risk. France and Germany both require motor third party liability coverage as well. Italy, Ireland, and Spain are comparatively more manageable, which is why carriers are more willing to operate there. Operators like Lime offset UK exposure by spreading risk across easier markets.

For small operators in Europe, there is no clean solution. Zoo Scooters, a small UK operator, exited the UK market because no insurer was willing to work with them on affordable terms. In the US, Schuh's team is working with CalSTART and others on a risk purchasing group model, where smaller operators pool together to buy coverage collectively and access the law of large numbers that larger operators benefit from automatically.

City tender requirements

City tender insurance requirements are often disconnected from reality. Santa Monica's requirement of a $5m per occurrence and $25m aggregate policy tower does not exist as a standard product in the insurance market. Some cities set requirements by copying contractor insurance terms that have been on the books for years without reviewing whether they apply to micromobility at all. Schuh's view is that a $5m coverage requirement is closer to a reasonable upper bound for what a city should dictate, and that anything above that for a city requirement is difficult to justify logically.

The decade ahead

There are roughly 40k automobile deaths per year in the United States. Autonomous vehicles are unlikely to directly operate in the micromobility lane, but they could meaningfully reduce the risk of micromobility users being struck by cars, which Schuh estimates accounts for around 50% of micromobility accident exposure. Combined with better dedicated infrastructure, the long-term picture is one of falling accident rates and falling premiums. Insurers would prefer smaller gross written premium and better net margins over larger top-line numbers with heavy losses. Lower premiums would also lower barriers to entry, allowing more operators to launch and sustain businesses.