The NSW Productivity and Equality Commission has rejected mandatory e-bike insurance
Bicycle NSW is very pleased that the Commission agrees with our position that insurance is not the key to safer streets.
A newly published review of insurance options found that education and enforcement are much more important than compulsory insurance to address genuine community concerns about safety, compensation and accountability.
The review was commissioned by the Minister for Transport in response to Recommendation 33 from the 2024 Parliamentary Inquiry into the use of e-scooters, e-bikes and related mobility options: That the NSW Government investigate, as a matter of urgency, potential settings to create a viable model for e-mobility insurance, including compulsory insurance for owners/riders.
This review focused on one aspect of that broader policy question: whether compulsory insurance is an effective and proportionate response.
The impacts of three insurance options were modelled (catastrophic third-party injury coverage, third party injury coverage, third party and personal injury), as well as three additional levers (expanded education and enforcement, device certification and inspection, a registration fee to fund safety programs).
Details of the methods, assumptions and findings are in the Commission’s Review of insurance settings for e-micromobility devices in NSW
The report dives in deep but we will focus on the conclusions!
Existing insurance covers most incidents
The Commission found that multiple layers of protection absorb costs associated with e-micromobility crashes. The public health system, welfare systems, private insurances, civil liability arrangements and (where motor vehicles are involved) the compulsory third-party insurance scheme all play a role.
The report acknowledges that some residual harms remain, but these gaps in protection are relatively narrow.
Mandatory insurance would introduce new harms
Insurance premiums would cause some users to stop riding or evade the requirements. Others would be left paying disproportionately more than the risk they create. Poor compliance could undermine the long-term funding viability of an insurance scheme.
The highest-risk users of e-micromobility – shared scheme and gig economy riders - already have insurance cover. Illegal devices cause most of the concerns but these can’t be insured. Likewise, many risky behaviours, like adults riding on footpaths, are already illegal.
The costs of mandatory insurance outweigh the benefits
Given the small number of people that are injured by e-mobility – especially third parties – the benefits are outweighed by the potentially large costs on riders, device owners, industry and the wider community.
Insurance schemes would quickly become unsustainable if many riders do not comply. And discouraging the use of micromobility would have far-reaching impacts on transport equity, employment accessibility and wellbeing.
The Commission's review included some fascinating cost-benefit analysis which calculated that administering, enforcing and complying with a mandatory insurance scheme would impose net costs on the NSW community of between $470 million and $1 billion.
NSW would be better off focusing on reducing harms in the first place
Most community safety concerns arise from unsafe riding practices, non-compliance with road rules, illegal devices and conflicts between different users of public space. These are the main drivers of harm.
As a result, policies to (i) improve rider behaviour, (ii) encourage the use of safe, legal e-bikes and (iii) deliver much better infrastructure for bike riding will deliver greater community benefits than new insurance requirements.
Bicycle NSW is in furious agreement!
A net benefit of $55 million was calculated, reflecting fewer crashes and injuries than under current policy settings, relatively low implementation costs and the preservation of transport benefits by avoiding increases in the cost of riding.
“Legal e-bikes have a risk profile much closer to ordinary bicycles, and pedestrians are rarely seriously injured by either,” says Peter Achterstraat AM, NSW Productivity and Equality Commissioner.
“E-bikes and other e-mobility devices are becoming an increasingly important part of the NSW transport system. In 2027, NSW is forecast to gain an estimated $237 million in benefits from micromobility usage.
“By targeting unsafe behaviour and illegal devices, we can increase the significant benefits e-mobility brings to our communities while improving safety for riders, pedestrians and other road users.”
The safe, legal e-bikes used by the Bicycle NSW team are not the cause of community concern! (Image: Bicycle NSW)
Further recommendations to progress safe e-mobility
In addition to the key recommendation to prioritise education, compliance and enforcement measures, the Commission urged the NSW Government to continue efforts to reduce the use of illegal and modified devices, and advocate for Australian Government action to prevent the importation of non-compliant devices.
The Commission also suggested much better data collection, recognising that it is very difficult to evaluate risk accurately when illegal devices are conflated with safe, legal e-bikes. Its otherwise excellent report is compromised by the failure to properly distinguish different devices. This is a problem that Bicycle NSW has raised many times with the Minister and Transport for NSW.
“We thank the NSW Productivity and Equality Commission for its balanced, well-informed and evidence-based approach to this review,” says Bicycle NSW CEO Peter McLean. “This is a big win for all the Members who ride a legal e-bike safely.
“The recommendations build on the NSW Government's careful and proportionate policy reforms since the 2024 Inquiry to reduce problems caused by micromobility.
"Bicycle NSW will continue to focus on education - for the community and the government. An important element of this work is the Bicycle NSW Student Bicycle Education Program, which is being rolled out across the state to improve the collective knowledge of safe bicycle use and help make NSW better for bike riding."
More about e-bike policy and regulations
These Bicycle NSW pages have a wealth of information about e-bike regulation and our ongoing hard work to advocate for safe, legal e-mobility:
Have you joined Bicycle NSW yet?
Although insurance remains optional, Bicycle NSW's Personal Accident and Public Liability cover provides peace of mind in case an incident causes unexpected expenses.
For just $2.50 a week, Bicycle NSW Members are covered by the very best insurance available to recreational riders in NSW.
You will also support our advocacy for better e-bike regulation, safer streets and more fantastic infrastructure like the Emu Trail and the Sydney Harbour Bridge ramp!
We fight to protect bicycle riders every day