What Is Bicycle Insurance?

Anyone that has had the slightest connection with a road with cannot fail to have noticed the rise in popularity of cycling. In line with that popularity has been the interest in insurance specifically aimed at cyclists, but just what is bicycle insurance? and is cheap bike insurance, or even free bike insurance as good as the more expensive options.

Me. 0 to 60. (Not mph...)
Me. 0 to 60. (Not mph…)

Like any other insurance it is a policy that aims to protect you against the standard perils of theft, damage and liability plus, in many cases, some optional extras such as personal accident. However, there are a few things to both consider and be aware of before you take out a policy. Oh.. and as usual – there are a few questions you should ask.

If you have Home Insurance, it is almost certain that some degree of cover for your bicycle is included in your policy, equally certain is the option to add bicycle cover as an enhanced option to the policy as well. So the first question to ask is:

What cover do I already have – or could have – in my existing home insurance policy?

From a cost point of view, this will be the cheapest option. However, as with everything in life, you get what you pay for and you may find the cover to be a bit basic for your needs. If you have a bicycle that you use every now and then, worth under £200 and its kept in a locked garage for 90% of the time, it may be that the existing home policy which might offer cover for theft from a locked garage and some personal liability cover is sufficient for your needs. If on the other hand, you have a bicycle worth about £1500 and you use it every day and lock it up at the local railway station while you are at work, you may want to look a little deeper into the cover that you want.
So, now you’ve checked your existing cover and decided that you want something more tailored for your needs. What do you need to ask? Well, firstly:

Where do you want your bike to be covered?

There can be a number of answers here. Theft cover whilst it is at your home is a given, but what of other situations. Do you use your bicycle for commuting? If so, where is it kept while you are at work? Do you leave it at a railway station? A policy may have a time limit for how long you can leave it locked up away from home.. Do you take your bicycle on holiday or even abroad? If you do, what cover is in place while it is attached to your car? What cover exists while you are abroad? What about if you are away at university for a lot of the year? The chances are that the normal household cover won’t cover your cycle while you are away, and even if it does, the cover may be modified.

What do you want covered?

bikeWell yes, there’s the bicycle of course, but what about the accessories? What about the liability cover? Would you get a temporary replacement while yours is being repaired? You need to see what is included as standard and what you can add as extra cover if you need to. You also need to go back to your home insurance policy and see what the limits and conditions are for the liability section that will be included in that, then you can compare it with the liability limits available on a stand alone bicycle policy.

How will your claim be settled?

There are two ways a claim can be settled; New for Old and Indemnity. With a New for Old settlement if you bicycle is stolen, it will be replaced (or the replacement cost given) with a new equivalent bicycle. On the indemnity basis, a cash settlement will be given based on the replacement cost of an equivalent model LESS an amount for wear and tear and taking the age of the bicycle into account. You need to establish which is to be used, or whether it will be a combination of the two, where a New for Old basis is used for bicycles up to a certain age after which it becomes an indemnity basis.

Do you want any Personal Accident cover?

Probably the least entertaining read of any insurance policy. The Personal Accident section will have a grim list of situations that will result in a payment, including Death, Loss of Limb(s) and Permanent Disability. It is, however, important to read as the circumstances in which payment will be made is quite specific and varies from policy to policy. A valid claim, for instance, may be for the loss of a hand but not a finger or fingers. As with everything I point out in these blogs, I am not suggesting that one type of cover is better than another. I am saying check the cover and decide yourself whether it suits your purpose. The time to find out the details is not when you are arguing with an insurer about what cover you thought you had.

A few general points…

All policies have exclusions, these are conditions that are set out in the policy where the reasons a claim will not be settled. They vary from policy to policy and you should read them carefully. There are a couple of universal truths though. Just like car insurance, claims will always be declined if you are doing anything illegal whilst in control of your bicycle. Typical examples will include riding under the influence of alcohol or drugs or using it as a getaway vehicle after a robbery (which is not recommended for a variety of reasons!) Most insurers will exclude cover if you are taking part in a competition. Generally speaking a competition is defined as an event where there will be a winner. This means that rallies and charity events are usually accepted, but don’t take my word for it – read, check, and ask.

Security

Other exclusions may include the fact that cover is not in force if the bicycle is not secured by an approved style of lock. Check your policy wording for what is and isn’t acceptable and look at the specifications on a lock before you buy it to make sure it is compatible. A huge range of locks for all purposes and budgets can be found here While on the subject of security, it is a good idea to security mark your bike with a  UV pen
as you would with any of your valuable property. I would suggest you taking a picture of it as well. Receipts and the date of purchase should also be kept safe and ready to be made available when asked.

Dual Insurance

This type of insurance increases your chances of falling into the “Dual Insurance Trap” This occurs when the same risk can be covered by two separate policies, usually from two different providers. When you submit any claim, the insurer will ask if you have any other insurances that may cover the incident that you are claiming for. You must tell them if you think you may be covered with another policy. It is then down to them to talk to each other and establish who takes responsibility for the claim, or if they share the settlement between them. With cycle insurance, there is a possibility that your home insurance may also cover you bicycle’s theft if it was stolen from home even if it is specified on a stand alone cycle policy. The same could be said of a travel insurance providing dual cover if you have taken your bicycle abroad. As with all dealings with insurers, tell them exactly whats what and work with them to get clarity on any questions you have.


Planning to Avoid a Below Average Retirement Income

I read an article this morning titled:

Women twice as likely as men to be unaware of pension value – Fidelity

You can read the full piece here, but in summary it was saying that some 25% of women do not know the size of their pension pot compared to just 15% of men. It when on to say that 25% of women found the planning process difficult compared with only 16% of men. It did not say whether it was the same 25% that both found it difficult and didn’t know the size of the pot. Students of the science of probability will no doubt bring me up to speed on that. These statistics point toward an increase chance of ending up with a below average retirement income. More worryingly, 21% said they would seek advice on their retirement income from friends and family rather than a qualified practitioner. Getting financial advice from friends and family is a recipe for putting those relationships under some potential strain. If, for no other reason than you can pursue a complaint against a qualified adviser, but there’s no redress against a well meaning cousin, always get an answer to a question or advice on a pension, in writing and from a qualified and regulated practitioner.

Whilst I recognise the disparity between the genders, the fact remains that as a whole too few people are making provision for retirement. When I was actively working in the pension sector, the overwhelming reason that people gave for not putting money aside, was the simple fact that the budget was just not available to do so. There is no simple answer to that problem, although a budgeting technique that many used was to treat their regular pension savings as if it was a bill that had to be paid.

Whilst reading the article, I was reminded of a poem by Robert Frost in which he says

“The afternoon knows what the morning never suspected”. 

Just like the afternoon can’t go back to the morning to change anything, we cannot go back a few years to alter our retirement plans. It is one subject for which the phrase “cannot start too soon” makes absolute sense. But before you can even consider altering plans, you need to find out where you stand now.

                   Today.

                                    This minute.

 

In my previous post “Do You Know Your State Retirement Age” I provided the links for both getting your date of retirement and your State Pension Forecast. Finding out you current situation from private or company schemes takes a little more effort than using the government calculators, but not that much more, and is well worth it in the long run.

Here is a quick four step guide for  finding out where you stand pension wise at this moment.

Step 1

Get a State Pension Forecast using the government calculator

Step 2

If you work for a company that provides pension provision, find the most recent pension statement that you would have been sent. Most would have been sent this time of year. If you haven’t got one, contact your employer and ask for it. They must provide you with one by law. Once you have it, read it. If there is anything, and I mean anything, that you do not understand, write it down and ask them.

Step 3

Write down all the places where you have worked. Some you will know straight away whether or not there was a pension benefit there or not. If there was, have you got a statement from them. If you have moved house, it is quite possible that they do not have your current address. If you haven’t got a statement, or the one you can find is quite old, write to the employer and ask for one.

When you write asking for a statement, address it to the HR department (or equivalent) and mark the envelope “Staff Pension Enquiry”. It is more likely to get to the right person if you do. In the letter you need to include the following:

  • Your Name
  • Your current address
  • Your address at the time you were working there
  • The dates (approximate if necessary) that you worked there
  • Your Date of Birth
  • Your National Insurance Number

Step 4

Once you have got all of these together. Add them up. This should give you a basic idea of the amount you are likely to get. It is probable that the pensions will be of differing styles and the calculation of each maybe slightly different, so it can be safely said that the resulting figure is not going to be exactly accurate, but it will be close enough for you to start thinking about what you might need to do to get the income you want in retirement.

It is at this point that you can decide whether it is worthwhile approaching a IFA for advice on how to make the best of what you have. All IFA’s will initially talk to you for free and will say whether its worth paying for professional advice or not regarding your ongoing planning strategy.

Figures obtained by the Prudential indicate that one person in seven will retire this year without any additional pension other than the state pension. The vast majority of the remainder will experience a shortfall in income from what they are expecting. Regardless of your age or gender, there is no better time than now for starting the planning for your retirement.

Do you know your State Pension Age?

…Or for that matter, how to get your State Pension Forecast?

As with most things in life, a little advanced planning can make things a whole lot easier. Retirement, hopefully, will come to us all and the pro of not doing the 9 to 5 or equivalent, is balanced by con of the major changes in your income. And they are not usually for the better!

The earlier you can start to have an idea of both when you are going to get a State Pension and how much it will be, the better chance you have of making that major change in your life a little easier.

During my lifetime both the date of my retirement and the amount forecast, have changed regularly. It is safe to say that the younger you are, the more chance there is that the rules will change, and change again before you retire. The only way to deal with this is by frequently checking the available forecasts as you go through your working life and as you get closer to that State Retirement date the information can be regarded as being more accurate for you. Fortunately, the government provide a simple instant online calculator for working out your State Retirement age. You can go straight to it by clicking here and then follow the steps below.

Step by Step Guide on how you can find your State Retirement Age





You will notice that along with the Retirement Age, the results page will also ask if you want to follow links for both information about Pension Credit and how to get a State Pension Forecast.  Both are similar in layout to the State Retirement Calculator shown above. As the State Pension Forecast is personal, you will have to log in using your Government Gateway account. You may well use the Government Gateway account for filing your tax return, or perhaps accessing other services. If you do not have one, you can register here.