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In simply 5 years, lithium-ion battery fires linked to e-mobility units have advanced from a fringe threat right into a mainstream security and legal responsibility disaster – notably in dense city areas, like New York Metropolis, the place adoption of those units has outpaced regulatory safeguards.
Along with the plain public security menace, e-mobility battery associated fires characterize a big and increasing legal responsibility publicity for insurers, property managers, and metropolis businesses. Our newest report – developed in collaboration with Oxford Economics – units out to reply a extra basic query: What is that this disaster actually costing the town?
The reply, conservatively estimated, is as much as $519 million in mixed human and financial loss between 2019 and 2023. This determine consists of fatalities, accidents, and structural property injury
Why Now? Why New York?
The dramatic rise in hearth incidents – an estimated eightfold improve from 21 in 2019 to as many as 187 incidents in 2023 – correlates strongly with the inflow of low-cost, uncertified e-bikes and scooters. New York Metropolis’s distinctive mixture of visitors congestion, delivery-based gig work, and dense multi-family housing has made it a case research in how shortly innovation can outstrip threat administration.
Knowledge from the Fireplace Division of New York, the Shopper Product Security Fee, and UL Options’ Lithium-Ion Battery Fireplace Incident Database shaped the muse of our modeling. This helped us generate incident estimates of fatalities, accidents, and structural properties damages.
Oxford Economics translated these incident experiences into value estimates utilizing a rigorous, conservative methodology by making use of federal valuation metrics for lack of life and harm. Fatality prices had been calculated utilizing the U.S. Division of Transportation’s Worth of a Statistical Life, set at $13.2 million per life as of 2023. Non-fatal harm prices had been derived as severity-weighted fractions of that worth, starting from minor harm to crucial harm, in accordance with DOT and Workplace of Administration and Finances financial steerage.
Our evaluation then built-in structural hearth value benchmarks from each Triple-I and the Nationwide Fireplace Safety Affiliation. Triple-I’s knowledge was notably necessary in defining the upper-bound estimates for property loss. Claims knowledge on the typical insurance coverage payout for residential hearth injury offered a grounded, actuarial counterweight to NFPA’s generalized nationwide averages.
This dual-source method allowed us to seize a extra sensible vary of probably losses throughout completely different housing sorts, from NYCHA public models to non-public properties.
A rising blind spot for insurers
From a risk-modeling standpoint, e-mobility hearth incidents don’t map simply to traditional insurance coverage classes. Many e-mobility customers, notably gig financial system staff, depend on leased, used, or modified e-bikes and e-scooters to satisfy supply calls for. A few of these units are powered by third-party or uncertified batteries or, in some cases, comprise second-hand elements. This creates a messy threat surroundings during which it’s laborious to know who owns what, the way it has been maintained, or the way it’s getting used. Furthermore, fires ensuing from these units usually fall exterior the scope of ordinary product warranties or producer accountability. This makes it troublesome to find out who’s accountable when one thing goes unsuitable.
For insurers, this presents a rising blind spot. Conventional assumptions round property and contents protection didn’t embody high-risk units charged in hallways or shared dwelling areas or for ignition sources that aren’t a part of standard product recall channels.
A $300 imported battery with no certification can set off a six-figure declare, and people dangers have gotten extra frequent.
The Path Ahead
Regulatory momentum is bettering. New York Metropolis’s Native Legislation 39, signed in 2023, bans the sale and lease of uncertified e-mobility units. In July 2024, New York Governor Hochul enacted further statewide measures to assist battery security and person schooling. Federal laws aimed toward establishing nationwide security necessities for lithium-ion batteries utilized in e-bikes and e-scooters is making its approach by Congress. Whereas these are optimistic steps, enforcement and consciousness stay uneven, leaving vital gaps in shopper safety and threat mitigation.
From our perspective at ULSE, a multi-pronged technique is important:
- Higher enforcement of security requirements for batteries and chargers.
- Extra strong public schooling on secure charging practices.
- Commerce-in and swap applications that encourage supply staff to discard unsafe batteries.
- Underwriting fashions that think about system certification, shopper habits, and constructing sort.
- Improved incident reporting frameworks that allow cities and insurers to gather higher knowledge and due to this fact higher observe threat publicity.
With higher knowledge, smarter requirements, and extra coordinated public-private motion, the way forward for e-mobility will thrive with security at its middle.
Mr. Deb might be among the many threat and insurance coverage business thought leaders talking at Triple-I’s Joint Business Discussion board (JIF) in Chicago on June 18, 2025. It’s not too late to register to attend this insight-driven occasion.
