Few Cities Require Scooter Insurance

June 19--PANAMA CITY BEACH -- There are cities in Florida that require scooter rental companies to carry liability insurance, but they are few and far between.

A News Herald review of ordinances in more than a dozen Florida cities where scooter rentals are common shows that most local governments don't require the businesses to carry the liability insurance coverage Bay County is requiring and Panama City Beach has approved in the first of two votes.

The coverage would pay for damages in the event a scooter rider damages a vehicle or hurts someone in a collision.

Last week, the Panama City Beach City Council passed an ordinance on first reading to require scooter rentals to have a level of coverage that equals the minimum of what the state requires for automobiles. To become law, the council would have to approve it on second reading, which is scheduled to happen at the council's first meeting in July. Staff is recommending insurance of $10,000 per person for each crash, $20,000 for all people on the scooter and $10,000 property damage.

Bay County, which usually tries to pass laws consistent with the city, has gone further, requiring coverage of $1 million in general liability and $500,000 in bodily injury.

Classy Cycles, which operates as California Cycles and is the only company to have a location in the unincorporated area, has filed a lawsuit against Bay County, contending state law pre-empts local laws and the state doesn't require this insurance for scooters.

California Cycles owner Rick Roof also said this level of insurance is not available to the company.

A letter from MBA Insurance to California Cycles dated May 22 states the company must "decline this risk" of offering this insurance because of a "high loss risk" and "high number of accidents."

Roof said that is one of many rejection letters from insurance companies his business received after applying for the coverage.

Jimmy Salmans, an underwriting agent with Evolution Insurance Brokers, which partners with Lloyd's of London for higher-risk insurance policies throughout the country, said he could get the coverage for California Cycles that Bay County is requiring. He estimated that to cover the 350 cycles it would cost the company about $100,000 a year.

"It is obtainable, but it's expensive," he said. "The $1 million (requirement) is kind of pricey."

Salmans pointed out that he was just "throwing around numbers" when giving the insurance quote.

Roof said agents will make these kinds of statements when trying to make a sale, but when his company filled out actual applications, they were rejected for the $1 million coverage every time.

In the underwriting process "they take risk into account," he said. "They take into account that we're the Spring Break capital, all the accidents. They flat out asked us how many crashes we have in a week."

Roof told the Panama City Beach Council that he could get the coverage they were requiring, but only through one company and it would only cover riders 21 years old and older. He said many of his riders are under that age, so they wouldn't be covered at all.

"Sixty percent of our business is 18 to 21, the Spring Break crowd," he said. "They (insurers) won't cover them."

Roof also said the insurance company notified him that if there were two crashes in a month, the company would cancel coverage.

Some scooter rentals in other cities have obtained the insurance on their own without being mandated to do it.

Surf & Cycles in Destin is among them. The business, which rents out surfboards, golf carts and bikes, has 11 scooters. It costs about $2 to insure one per day for coverage of $20,000 per person for each crash, $40,000 for all people on the scooter and $20,000 property damage, said co-owner Rory Quinn.

"It's cheap. It works for me to have piece of mind," he said.

Since 1963, Victor Mills has been operating scooter rental businesses out of Key West. He said the city does not require liability insurance, and if it did, the owners of 45 businesses that rent out 2,500 scooters would be up in arms.

"You can't do it," he said. "You can't get (the scooter insurance). No one will write that liability policy. I'm an agent. I write insurance."

Sanibel Island, near Fort Myers, is one of the few cities in the state that has laws requiring scooter rentals to carry liability insurance, a minimum $5,000 for property damage and $10,000/$20,0000 bodily injury per scooter.

Billy Kirkland, the owner of Billy's Rentals, said they have carried the liability insurance since 1999. He said their scooter coverage is bottled into one policy that also covers bikes and wheelchairs.

He said Sanibel Island doesn't have the Spring Break crowd of Panama City Beach, which could determine the rates.

"We don't get younger kids here," he said.

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