4. Property Not Covered We do not cover:

c. "Motor vehicles". This includes a "motor vehicle's" equipment, and parts, that are in or upon the "motor vehicle".

However, this Paragraph 4.c. does not apply to:

(1) Portable electronic equipment that:

(a) Reproduces, receives or transmits audio, visual or data signals; and (b) Is designed so that it may be operated from a power source other than a "motor vehicle's" electrical system.

(2) "Motor vehicles" not required to be registered for use on public roads or property which are:

(a) Used solely to service a residence; or (b) Designed to assist the handicapped;

So there are exceptions for vehicles not registered for use on public roads that either are used solely to service a residence or are designed to assist the handicapped. Some examples of these vehicle types would be a lawn mower, tractor, gator, bobcat, mobility scooter, or electrical wheelchair or other motorized transport method for the elderly or handicapped.

This eliminates coverage for a wide range of vehicles. In looking at the coverage with respect to low power recreational vehicles, such as an electric bike or motorized scooter, if it is required to be registered for use on public roads, then it is a "motor vehicle" and would thus be excluded. If the e-bike or e-scooter is not required to be registered on public roads then there would be coverage. This becomes a problem under the homeowners policy, as these vehicles are still motorized, and are not typically required to be registered.

Likewise, there are exclusions under the liability section for "motor vehicles" and some exceptions. The exceptions are as follows:

2. If Exclusion A.1. does not apply, there is still no coverage for "motor vehicle liability", unless the "motor vehicle" is:

a. In dead storage on an "insured location"; b. Used solely to service a residence; c. A riding lawn mower that, at the time of the "occurrence", is being used to mow a lawn; d. Designed to assist the handicapped and, at the time of an "occurrence", it is:

(1) Being used to assist a handicapped person; or (2) Parked on an "insured location";

e. Designed for recreational use off public roads and:

(1) Not owned by an "insured"; or (2) Owned by an "insured" provided the "occurrence" takes place:

(a) On an "insured location" as defined in Definition B.10.a., b., d., e. or h.; or (b) Off an "insured location" and the "motor vehicle" is:

(i) Designed as a toy vehicle for use by children under seven years of age; (ii) Powered by one or more batteries; and (iii) Not built or modified after manufacture to exceed a speed of five miles per hour on level Ground;

Exclusion A is for those vehicles registered for use on public roads or that are are required to be registered for use at the place of the "occurrence". The exception then lists what vehicles would have liability coverage. Paragraph 2. a. through d. clarifies that the policy only covers the motor vehicles for the express purposes of maintaining the residence premises or assisting the handicapped; and 2.e. describes the ownership, type and use requirements for coverage of recreational vehicles. These vehicles must be designed for recreational use off of public roads and not owned by an insured or owned by an insured and the "occurrence" takes place on certain "insured locations", or off of an "insured location" as long as the vehicle is designed as a toy vehicle for children under seven years old, is powered by a battery and does not exceed five miles per hour on level ground. Very few vehicles fit these specifications.

There are a host of recreational vehicles that aren't designed as a toy for children but are still recreational vehicles. It's likely that most people think of electric bicycles and motorized scooters as sports equipment rather than motor vehicles, but the homeowners policy still sees them as "motor vehicles". However, most areas don't require them to be registered for use on public roads, which is critical to this discussion. Motor vehicles are excluded if they are required to be registered for use on public roads or on areas where they are used. For many of these recreational vehicles, the Incidental Low Power Recreational Motor Vehicle Liability Endorsement HO 24 13 becomes important. The endorsement expands coverage by removing the existing language for the exceptions and replaces it with broader language.

Incidental Low Power Recreational Motor Vehicle Liability Endorsement HO 24 13

DEFINITIONS

With respect to a "motor vehicle" covered by this endorsement, Definition 9., which defines "insured", is extended to include any person or organization legally responsible for the covered "motor vehicle" owned by an "insured".

Definition 9., however, does not include a person or organization using or having custody or possession of the "motor vehicle" without the permission of the owner.

Analysis

The endorsement addresses the definition of "motor vehicle" and specifies that an "insured" includes those people or organizations legally responsible for the vehicle owned by an "insured", but does not include someone with possession of the vehicle who does not have the owner's permission. This removes any coverage if the vehicle is stolen and the thief causes damages or injuries while using the insured's vehicle.

SECTION II – EXCLUSIONS

Paragraph A.2.e. is replaced by the following:

e. Designed for recreational use off public roads and:

(1) Not owned by an "insured"; or (2) Owned by an "insured" provided the "occurrence" takes place:

(a) On an "insured location" as defined in Definition B.10.a., b., d., e. or h.; or (b) Off an "insured location" but only if the "motor vehicle":

(i) Was not built or modified after manufacture to exceed a speed of 28 miles per hour on level ground; and (ii) Is not a:

i. Moped; or ii. Motorized golf cart, regardless of its speed capability.

Analysis

Paragraph A. 2.e. applies certain exceptions to the exclusion for "motor vehicles". The first part of the endorsement remains the same – there is an exception for vehicles designed for recreational use off of public roads if the vehicle is not owned by an "insured" or the vehicle is owned by an "insured" and the "occurrence" takes place on certain "insured locations". Those locations are:

a. The "residence premises",

b.The part of other premises, grounds and structures used as a residence and shown in the declarations or acquired for use as a residence during the policy period,

d.Any part of a premises not owned by an "insured" and where the "insured" is temporarily residing,

e.Vacant land, other than farm land owned or rented by an "insured"

h.Any part of a premises occasionally rented to an "insured" for other than "business" use.

As long as the vehicle is owned by the "insured" and the accident occurs at one of the listed places, then coverage applies. Vehicles covered by this section would be ATVs, motorized children's toys, dirt bikes, and others.

There is also certain coverage if the vehicle is designed for use off public roads and is owned by an "insured" and the accident occurs on an "insured location" as defined, or occurs off of an "insured location", but the vehicle must be of a certain type. These vehicles must not be able to go faster than 28 miles per hour on level ground and must not be a moped or motorized golf cart, regardless of their speed capability. The earlier form listed motorized bicycles and scooters as excluded vehicles along with the mopeds and golf carts, the intent being to exclude motorized recreational vehicles that can be driven on or off public roads.

Because of the growth in popularity of motorized scooters and electronic bicycles, the updated endorsement has removed the exclusions for motorized bicycles and scooters. The allowable speed has been increased from 15 mph to 28 mph, as certain classes of electric bicycles can operate at speeds up to 28 mph. ISO selected the 28 mph as a top speed based on the 3-class-system for classifying electric bicycles that has been adopted by several states. The National Conference on State Legislatures defines Class 3 as follows:

Class 3 electric bicycle: A bicycle equipped with a motor that provides assistance only when the rider is pedaling, and that ceases to provide assistance when the bicycle reaches the speed of 28 miles per hour and is equipped with a speedometer.

The exception states that it applies to motor vehicles that are designed for recreational use off of public roads; electric bicycles and motorized scooters are not so designed. However, by removing these vehicle types from being specifically excluded, the revised HO 24 13 Incidental Low Power Recreational Motor Vehicle Liability Coverage endorsement will provide coverage for any recreational vehicle that meets the speed requirements of the endorsement and is not specifically excluded, such as ATVs, e-bikes, hoverboards, and motorized scooters.

However, not all insurers may want to provide coverage for non-owned motorized bicycles and scooters. In light of that, ISO has developed the Non-owned Motorized Bicycle and Motorized Scooter Liability Exclusion HO 24 03 03 22. This form restores the exclusion for non-owned motorized bicycles and scooters.

Non-owned Motorized Bicycle and Motorized Scooter Liability Exclusion HO 24 03 03 22

SECTION II – EXCLUSIONS

Motor Vehicle Liability Paragraph A.2.e. is replaced by the following:

e. Designed for recreational use off public roads and:

(1) Not owned by an "insured" and not a:

(a) Motorized bicycle; or (b) Motorized scooter; or

(2) Owned by an "insured" provided the "occurrence" takes place:

(a) On an "insured location" as defined in Definition B.10.a., b., d., e. or h.; or (b) Off an "insured location" and the "motor vehicle" is:

(i) Designed as a toy vehicle for use by children under seven years of age; (ii) Powered by one or more batteries; and (iii) Not built or modified after manufacture to exceed a speed of five miles per hour on level ground; This Paragraph A.2.e. also applies to the Farmers Personal Liability Coverage endorsement if attached to the Policy.

All other provisions of this Policy apply.

Analysis

This endorsement makes it abundantly clear that there is no coverage for motorized bicycles or scooters that are not owned by the insured. If an insured on vacation rents a motorized scooter or bicycle to tour an area and accidentally runs into a pedestrian, there is no coverage for that person's injuries when this form is attached to the policy. Again, paragraph A.2.e. Is the exception to the motor vehicle exclusion for certain vehicles. This endorsement removes that exception for motorized bicycles and scooters.

Likewise, there is an endorsement excluding liability for motorized bicycles and scooters owned by an insured, the HO 24 04 Motorized Bicycle and Motorized Scooter Liability Exclusion. This endorsement is to be used with HO 00 14 Contents Comprehensive Form only. The exclusion is fairly broad and completely replaces the motor vehicle exclusion.

HO 24 04 Motorized Bicycle and Motorized Scooter Liability Exclusion

SECTION II – EXCLUSIONS Paragraph A. is replaced by the following:

A. Motor Vehicle Liability

1. Coverages E and F do not apply to any "motor vehicle liability" if the involved "motor vehicle":

a. Is registered for use on public roads or property; b. Is not registered for use on public roads or property, but such registration is required by a law, or regulation issued by a government agency, for it to be used at the place of the "occurrence"; or c. Is being:

(1) Operated in, or practicing for, any prearranged or organized race, speed contest or other competition; (2) Rented to others; (3) Used to carry persons or cargo for a charge; or (4) Used for any "business" purpose.

2. If Exclusion A.1. does not apply, there is still no coverage for "motor vehicle liability", unless the "motor vehicle" is designed to assist the handicapped and, at the time of an "occurrence", it is:

a. Being used to assist a handicapped person; or b. Parked on an "insured location".

All other provisions of this Policy apply.

Analysis

This endorsement states that coverage does not apply to any "motor vehicle liability" if the "motor vehicle" meets certain conditions. Where the endorsement changes from the policy is the exception to the exclusion. The policy allows coverage for vehicles designed to assist the handicapped that are being used to assist a handicapped person or are parked on an "insured location", and motorized bicycles and scooters. This endorsement removes the exception for motorized scooters and bicycles.

Motorized bicycles and scooters have become more popular in recent years. Seeing as they are powered by a small motor, this makes them "motor vehicles" according to the definition in the homeowners policy. The policy has some exceptions for certain limited types of vehicles, but motorized bicycles and scooters are newer technology with particular liability issues. These endorsements provide insurers with a way to provide or exclude coverage for these issues.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.