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Cycle Insurance – Some thoughts

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Why does insuring a £10k bike cost more than a Tesla? And, don’t get me on the cost of EV insurance!!

Here in the UK, freedoms are coming back and so is the relaxation of the personal responsibility regarding the pressure on medical services through taking long rides during a pandemic. Like me, you may be massively looking forwards to climbing upon your bike and enjoying the great outdoors. In this article, I aim to better educate you on cycle insurance.

Firstly, something that I need to cover off – true risk and your perception of risk. Insurance something that we take out to minimise personal loss and therefore to reduce our risk of financial loss. For the insurer, they take on a risk in the hope that they don’t have to pay out and therefore make a profit. It’s therefore a balancing act, you want to insure that your bike is covered should something happen to it and the insurance company offer the service and calculate the risk to ensure that they are profitable.

What you a good/bad risk?

  • The value of your bike
  • The type of bike
  • Where you ride your bike
  • When you ride your bike
  • How often you ride your bike
  • Your postcode and therefore the crime rate in your area
  • The type and number of events that you enter
  • Equipment on your bike that makes it more desirable or increases the cost of repair
  • Your experience riding a bike
  • Previous claims experience

Car drivers will know what information most insurers require. The big drivers of car insurance premiums are:

  • Value of the car
  • Type of car (performance especially)
  • Driving history including accident in the last 5 years
  • Annual mileage
  • Your postcode and how to store the car
  • Your job

Applying to cycle insurance is alien. My postcode seems to make no difference. As does claims experience. Some insurers just want to know the value of the bike and will I be doing racing? That means that someone in the Outer Hebrides is very likely to be paying the same monthly premiums as another cyclist with the same value bike who lives in, say, London in a high crime area and who commutes daily with the bike!

Most of the people who read this are likely to be competitive, or Lyra wearing fitness cyclists. We like to ride with club-mates and have a natter at the cafe. We leave our bikes in sight, as do many others and we don’t tend to ride with bike locks. However, check out the policy documents of any insurance you take out before you sign-up (these are available online and usually at the bottom of an insurer’s website). When you ride to the cafe, your bike is only insured if you lock it to an immovable object with a ‘solid secure gold’ standard lock.

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The Hiplock – an example of a solid secure gold standard lock

Some of these locks weigh 2 kilos and you have to ask yourself, are you better buying a far less desirable bike that is heavier?! So, parking your bike at the cafe is unlikely to be covered. What about at home? This varies per insurer, some require the bike to be locked to the wall with a solid secure standard lock, in a locked room, attached or part of the main residence and with a British Standard lock on the outside door of the room. Again, read the T&Cs in the policy document. Some are more lenient. They require your bike to be in a locked shed/out house.

What about crashes and damage to the bike? This is more straight forward as it’s unlikely that your bike needs a solid secure lock whilst cycling along – however, the sheer weight might contribute to the accident! Proving your ownership of the bike and it’s value is key. You need to keep as much evidence as possible to prove the ownership of your bike and some insurers require photographic evidence. This is exactly the same with any peripherals that you have added to your bike – and/or your clothing.

More on theft from home and with addition motor vehicle theft thrown in. Here is an excerpt from a well-known cycle insurer’s policy document:

  • An object which cannot be undone or removed unless using extreme force (i.e requiring the use of power tools or other machinery, not simple hand tools such as a spanner).
  • An object from which the pedal cycle cannot be lifted, either over or under, without having broken the approved lock.
  • A properly fixed motor vehicle pedal cycle rack which is locked to the vehicle which cannot be undone or removed unless using extreme force.
  • A pedal cycle rack supplied expressly for the purpose of securing pedal cycles which cannot be undone or removed unless using extreme force (i.e. requiring the use of power tools or other machinery, not simple hand tools such as a spanner), including those found at rail stations, city centres and places of work.

One obvious question here is, what if my bike is stolen from the car using remote unlocking software?

The big question is, is cycle insurance worth it? It depends on the risk that you want to take. If your bike is stolen, or severely damaged (or if carbon, any damage is bad enough), how comfortable are you with having to find the money to replace or repair it? If you want to take that risk away, how much can you afford to spend? What risks can you tolerate and not have in your policy? There is no denying, cycle insurance is expensive when compared to car insurance. Mentally so!

I know the Laka fans will say ‘oh, but Laka is so different!’ It is a little different and easier to understand (if not budget for), but it’s still insurance and is still expensive. For example, a £10,000 bike costs between a typical £61 per month and £87 per month – that’s a maximum of £1,044 this year (it was £75 per month maximum last year).

There is an alternative and it is your buildings and contents insurance. However, beware! A standard home contents policy will only cover ‘pedal cycles’ up to £200 and then only in certain circumstances. You can often insure them as separate items. Once again, ensure that you fully investigate the T&Cs.

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Your pain cave – this is a cracker. Think about a £1k smart trainer, a TV, stand, fan and all the peripherals – something for the home contents?

One final note with any insurance – proportionate benefit. What this means is if you partially insure something. E.g. a £10k bike and you insure it for £5k. If it’s stolen, you are very likely to get 50% of £5k – i.e. £2.5k – the moral of the story is, always insure any items for their full value.

I’ll leave the choice to you and implore you – read the policy documents before you sign-up.

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