Why Ontario’s shift to optionality may force e-bike riders to sue

Electric bikes and other micro-mobility vehicles are multiplying on Canada’s roadways, and accident rates are increasing as some municipalities consider licensing requirements.

Right now, micro-mobility riders who are struck by a vehicle generally look to that vehicle’s no-fault benefits insurance to cover income replacement benefits (IRB), non-earner benefits, caregiver benefits, housekeeping expenses, lost educational expenses or death benefits.

“Those benefits are all currently mandatory,” says Tim Crljenica, a partner at law firm Thomas Gold Pettingill.

“The level of accident benefits coverage that a person will receive depends on the nature of the injury. Somebody with a ‘minor injury’ has access to $3,500 of medical benefits. Somebody with a non-minor injury, but not a catastrophic injury, gets $65,000 of attendant care and medical over five years, and then somebody who has a catastrophic injury gets $1 million of attendant care and medical benefits over their lifetime.”

Related: Takeaways from B.C.’s new e-bike regulations

But that changes July 1, when provincially mandated changes to Ontario automobile insurance will make it optional for drivers to purchase certain coverages. And that will restrict who is covered by both the standard and optional benefits.

“When it comes to people on scooters or e-bikes, those devices are not considered automobiles, so the devices wouldn’t carry automobile insurance. A person who is injured by a vehicle while driving a scooter or e-bike is essentially no different than a pedestrian. Their device will not be covered by an automobile insurance policy,” Crljenica tells Canadian Underwriter.

“From July 2026 onwards, when an automobile accident occurs with an e-bike or scooter, none of those optional benefits will be payable to an e-bike operator or scooter operator, even if the automobile driver has purchased those coverages.

“The optional coverages, when they are purchased by a policyholder, only cover four types of persons. They cover the named insured, that’s the policy holder. They cover the spouse. They cover dependents, so that’s usually children or somebody else who is financially dependent on the policy holder. And fourth is drivers listed on the policy.”

Related: Will rising e-scooter accidents spark insurance changes?

In July, those will be the only people who can access the optional benefits. So, if a driver buys a policy that includes all optional benefits and hits an e-bike rider – who isn’t named on the policy – that rider can’t access any of the additional coverages. They will only receive attendant care and medical benefits, subject to the nature of the injury.

That makes e-bike and e-scooter riders more likely to sue an at-fault driver, and increase the damages exposure to drivers in general.

“Say you were driving and hit a young person on [an e-bike]. He was working although not earning much; but now he won’t be able to work for the rest of his life. Under the current system, the person would be getting IRB of up to $400 per week. That adds up over the span of 30 or 40 years, and it’s a big six-figure deduction that the at-fault driver would get when the person sues,” says Crljenica.

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“When the July 2026 change comes in, this injured person will not have access to the IRB – unless he has his own auto insurance – and the at-fault driver through his or her insurer will be responsible for compensating the injured person for the loss of income.”

That means drivers being sued will have a far higher exposure to lawsuits, because after July, they won’t have those deductions that reduce claims for income losses, and other expenses.

“The main effect of these no-fault changes is the source injured persons are going to receive their compensation from,” Crljenica tells CU.

Brokers can suggest solutions

From a coverage perspective, brokers can help clients find options. And this will be particularly important in urban areas that are seeing the highest levels of micro-mobility device usage.

“It’s going to create a different kind of congestion that people simply aren’t accustomed to. And that’s going to equate to more accidents,” says Adam Mitchell, CEO of Mitch Insurance.

He adds specialty insurers do write coverage for various small e-vehicles, although it’s unclear what percentage of riders purchase policies.

“If a greater percentage of people go uninsured, then that same percentage is going to be more inclined to sue,” Mitchell says.

In cases where auto or personal insurance clients are examining injury risks, umbrella liability policies or even disability insurance policies could be options, he tells CU. And, ideally, liability levels should be set in the $2 million-plus range.

“I think everybody’s got to run their own cost-benefit [analysis],” he says. “If that fits into your world, then…sell that risk off and let somebody else worry about it.”

Related: Lax e-scooter insurance spells trouble for Canadian municipalities

Crljenica agrees personal disability policies will become important in Ontario by July. But one problem is that many e-bike riders are gig workers who are generally considered independent contractors, and don’t receive disability coverage from employers, and likely can’t afford to buy it.

A percentage of those gig workers are also ineligible for provincial healthcare programs.

“Gig workers will certainly be affected by the no-fault changes. But the changes do not mean that they cannot sue,” he tells CU. “If the gig worker is a delivery person on [an] e-bike and they’re [seriously] injured by a car, with no access to any other insurance coverages…and they can’t work, you’re looking at a very big damages claim. That person would be able to recover the damages for their lifetime of lost income solely from the at-fault driver.”

Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.