Foldable electric car creates insurance challenges

Linda Melone

Finding a parking space gets a lot easier when the length of your car equals the width of a traditional car. Such is the case with the upcoming Hiriko Fold. This electric car prototype features retractable front and rear units that can shrink the car’s length from 8.3 feet to 5 feet – allowing three Folds to fit into a regular parking spot.

It’s also entirely battery-powered and can run for 75 miles on a single charge, making this tiny vehicle a viable option for commuters. The Hiriko Fold, being made by a Spanish automotive group, is scheduled to hit the streets in 2013; it'll sell for about $16,500 in the U.S. and Europe.

Insuring the Hiriko may present challenges, depending on how it's categorized, says David Miller, CEO of Brightway Insurance in Florida. "The biggest issue is whether or not it is going to be recognized as a standard, street-legal motor vehicle," he says.

Some electric cars fall under the federal standard for low-speed vehicles, which reach a maximum speed of 20 to 25 miles per hour, according to the National Highway Traffic Safety Administration (NHTSA). This may not be the case with the Hiriko, which can reach 31 mph. Golf carts fall under the low-speed-vehicle category. Most states allow such vehicles to travel on roads with posted speed limits of 35 mph or less. Only four states don't have laws regulating low-speed- vehicles – Connecticut, Mississippi, Montana and Pennsylvania.

If a passenger vehicle has a permit from the state motor vehicle department, auto insurance companies regard it just as they do other passenger vehicles, says Rose Marshburn, a personal lines specialist with SIA Group, an insurance agency in North Carolina. Each make and model has its own "rating," but Marshburn says she doesn't know what sort of rating the Hiriko will get.

A company called ISO rates various makes and models of vehicles based on injury and property damage liability. Since it’s not on the road yet, the ISO code for the Hiriko hasn't been set.

Federal safety standards don't apply to low-speed vehicles, and they’re not required to meet criteria for crashworthiness, according to the nonprofit Insurance Institute for Highway Safety. However, low-speed vehicles must be equipped with seat belts, headlights, taillights, brake lights, reflectors, mirrors, a windshield and a parking brake.

The Hiriko has all of the above, although not in the traditional positions. For example, the Hiriko's windshield serves as the car door.

In addition, the Hiriko's four wheels are mounted at the corners of the internal framework of the car. Each wheel can turn 60 degrees to the left and right, enabling it to spin on its axis or even travel sideways — making parallel parking a piece of cake. For added convenience, you don’t need to leave the vehicle to convert it to its smaller size – the car’s size can be arranged while you're seated.

If the Hiriko Fold is sold in the United States as a standard motor vehicle, insuring it shouldn't be a problem, Miller says. However, if it doesn't conform to U.S. standards, many insurance companies will refuse to cover it. Even if that's the case, specialty insurers may sell policies for the Hiriko, although that coverage would be more expensive than standard auto insurance, Miller says.

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