Opinion: Why Micromobility Insurance is Becoming a Competitive Advantage

In this piece, which originally appeared on Zag Daily, Kalle Palling, explains the benefits of adaptive insurance for micromobility operators.

This piece is timely because throughout 2024 BBSP has had conversations with grantees and former grantees about their insurance rates going up and the negative impacts it can have on education and outreach programs, their ability to expand and to serve everyone, including youth under the age of 18. Though the insights and explanations presented by Kalle Palling are already known by bike and scooter share operators across the country, the information could be useful in helping frame conversations for people in positions to make changes to insurance practices for shared micromobility. The information also helps paint the picture of what operators are up against as they continue to provide an essential service to the public. Smaller, nonprofit bike share operators are feeling the pressure.

Conversations are ongoing among shared micromobility operators about other options. At the NABSA conference this past October, principal consultant Colin Hughes at Rebel Group spoke about insurance resources during a session titled  “Partnering for Success: The Role of Community Partnerships in Building Vibrant Shared Micromobility Systems.” Hughes shared about Risk Purchasing Groups (RPGs), where two or more operators can buy into one policy to share the overall cost and pool their risks.

Kalle’s piece, below, is a call to action for insurers.

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Today, insurance costs are a major expense for micromobility operators, but coverage plays a crucial role in making shared mobility viable. Insurance reduces operational risks, allowing operators to scale. It also fosters user trust, meets regulatory needs, and attracts investment, all of which drive micromobility growth. This is why getting insurance right matters so much.

I believe the core issue driving unsustainable costs is the way insurance is viewed, designed and applied. The gap between risk carriers and operators is often too wide, and closing it is essential to unlocking micromobility’s potential. If insurers could deepen their understanding of the platform economy, they could deliver better solutions that transform insurance from a burden into a competitive edge.

THE PRESSURE OF INSURANCE COSTS ON MICROMOBILITY

Today’s micromobility platforms face unpredictable conditions. Demand shifts with seasons, and shared e-scooters and bikes carry unique risks, making it difficult for traditional insurers to provide tailored coverage. Most operators are stuck with premiums that don’t reflect their real needs, and insurance costs are often based on yesterday’s assumptions rather than today’s realities. That’s especially visible with the adoption of motor third party liability insurance for e-scooters.

At present, annual premiums and fixed pricing models dominate, leaving operators with costs that do not account for their unit economics and real-world usage. Many insurers are applying one-size-fits-all methods, missing the nuances of platform-based models. For instance, many countries have applied motor third party liability insurance by just adding e-scooters next to cars, as if the assets were the same. But the risk that a car carries is totally different to that of an e-scooter. Potholes in the road cause minor, if any, harm to a car. For an e-scooter rider however, this could cause a serious injury.

These errors in the market today are not because of a lack of interest; rather, it’s a knowledge gap that keeps providers paying for risks that do not reflect their operations. This means we have to go deep behind every claim and the root cause of the claim to differentiate the risk between those new and old types of vehicles.

Closing this gap means adopting responsive, real-time insurance solutions that can flex with industry demands. Insurers who adapt to this new approach empower micromobility operators to turn insurance from a cost burden into an operational advantage. With adaptive models, platforms can use insurance to support growth, align with actual usage, and strengthen their position in the market.

EMBRACING THE FUTURE OF ADAPTIVE INSURANCE

Insurance policies should adjust around actual usage and risk. Coverage should reflect completed rides, respond to changing demand, and recalibrate based on real-world data. This is the future of insurance that forward-thinking platforms need. Many of them are already actively building a better future with Cachet.

We understand that operators require flexible pay-as-you-go pricing models rather than fixed premiums calculated on worst-case scenarios. It all begins with data. Collecting and processing the right kind of data, and presenting it in ways insurers can understand. The end result is adaptable policies tailored to the platform economy that support rather than hinder their unique economic models.

The technology to achieve this is already here. Integrated tools that manage assets, track usage patterns, and streamline claims processing give operators control over insurance costs that traditional carriers can’t match. Systems that adapt premiums dynamically, for example, allow platforms to only pay for what they need – no more, no less.

Since co-founding Cachet in 2018, I’ve seen how uniting these tools and services in one place benefits partners of all sizes. A single mobility hub lets major players and local leaders manage fleets, track usage and handle claims. Paying for what they need. It is a service shift that lets insurance keep up with each business, rather than the other way around.

The end result is a model of insurance that adapts to the business rather than forcing the business to adapt to insurance. For micromobility operators, this translates to reclaimed costs, resources available for expansion and a stronger competitive edge.

THIS IS ABOUT MORE THAN JUST COST SAVINGS

As micromobility reshapes urban living, operators need financial resilience to navigate this evolving demand. Competitive insurance pricing is a foundational step in this process, enabling platforms to scale responsibly, invest in safer fleets and improve user experiences. But for insurance to become a true opportunity, platforms need more than cost savings – they need an integrated approach.

Competitive insurance pricing is the first step; the real advantage lies in building an ecosystem system that allows operators to manage low costs and maintain high safety standards across their fleets. When claims reporting, policy management, and fleet oversight work seamlessly together, insurance becomes a tool that helps platforms scale efficiently.

STREAMLINING INSURANCE

Imagine a system where all policies are stored in a single digital wallet with unified payments, allowing operators to add or remove coverage as needed. This consolidated approach doesn’t just simplify operations, it enhances transparency, allowing operators to access and manage policies effortlessly. This kind of efficiency, enabled by platforms like Cachet, is preventing gaps in coverage, letting operators scale with minimal logistical challenges.

Claims reporting is another area ripe for innovation. Traditional claims processes are often time-consuming and resource-heavy. With adaptive systems, claims reporting becomes streamlined and will reduce administrative burdens. As we know, reporting itself is a small part of the claims process, but enabling easy collection of important data gives us the opportunity to make better decisions to prevent similar claims happening again. Operators have to be able to monitor claims across their fleet with minimal disruption, freeing up time and resources to focus on growth.

WHY IT PAYS TO KEEP UP

Shared micromobility is transforming urban transportation, and insurance must keep pace. The tools and methods I have outlined here form the basis of adaptive insurance. It means flexible payments that meet real platform needs, pricing that adjusts over time to actual usage, and integrated tools to respond to risks in your fleet as they emerge. It means leveraging data to help insurers adapt to the platform economy.

This is not just an exercise in cost management – it’s a strategic approach for resilience and growth. Platforms that embrace adaptive insurance will gain a competitive edge, lowering expenses and building long-term stability.

The end result sees operators build trust with city partners, showing a commitment to responsible operations. This, in turn, eases expansion, helping platforms secure the regulatory support they need to grow sustainably. In an era where cost efficiency and public trust are essential, adaptive insurance offers platforms a pathway to thrive, evolve and become a mainstay of urban life.

Kalle Palling is the Co-founder of Insurtech startup Cachet which designs high-tech, data-driven insurance products with a focus on platforms and micromobility. Palling is a former Estonian Member of Parliament where he focused on several issues including mobility and transportation as well as energy and environmental policy.