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.
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?
Well 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.
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.
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.