Bicycle Insurance – What You Need To Consider
For a long time now I’ve intended on posting and article on bike insurance. Since this is a massive topic I enlisted the help of Bradley Preist who did a great job writing “Salary Packaging You Bike“. Brad took a while getting back to me but when he did I was blown away. He created a comprehensive spreadsheet that compared all of the major insurance providers in Australia by using the public information on their websites.
Unfortunately when I contacted the CyclingTips legal departement we were notified that this is in fact illegal for me to post. This is considered to be offering financial advice. These insurance policies can get complicated when reading the fine print and a comparison spreadsheet is not adequate to choose a provider. Thankfully my financial and insurance adviser Marcus O’Callaghan (who is also a keen cyclist – I highly recommend him on both counts) from Belmont Financial offered to look over this article and added in a few general comments and edits.
Thank you to Brad and Marcus for helping with this. Although it may not be obvious, this was an enormous amount of work to put together.
Why Every Cyclist Should Think About Having Bike Insurance!
By Bradley Preist and edited by Marcus O’Callaghan
OK, this article probably isn’t going to be up to the usual (albeit self-assessed) very high standard of “immediately interesting reading”. However, if you have the misfortune to have something bad happen to your bike or to other people’s whilst you are on your bike, this topic becomes a lot more interesting. So read on to find out a little more about the wonderful world of bike insurance.
HOWEVER BE WARNED! Before I start, I need to be very clear that I am not providing anyone with insurance or financial advice. Just like when I talk about heart rate training I am not taking the place of your cardiologist, if I talk about insurance, I am not your financial adviser.
The aim of this article is to raise awareness that there are various forms of bike insurance out there and one that might suit you. If you want to find out more, I suggest you go to a general insurance broker or to one or more (more is better) insurance providers direct. And you need to read these really interesting little documents called Product Disclosure Statements (PDS for short).
I need to apologise in advance that I can’t be a more specific, but the lawyers that make up the CyclingTips Legal Department have come down hard on me on this one. As Willy Shakespeare once said, “The first thing we do is kill all the lawyers”. Sometimes I agree, but this time they’ve given me advice that will keep me out of jail.
Additionally, the question of insuring yourself against injury or death on the bike is a completely different matter. Today I am talking about damaging something that won’t fix itself, ie. your bike (and other stuff too). Remember folks, skin heals and paint doesn’t. So strap yourself in and read on.
You hit a parked vehicle breaking your prized carbon and damaging the vehicle; you cross wheels and take down half the bunch in one quick move; you leave the café after that second latté and your bike is gone; you return to your locked bike only to find it damaged and the wheel missing; you stand at the baggage terminal for hours wondering where is my bike bag.
Whether it be damage or loss, Bicycle & Equipment insurance might be pretty useful, indeed essential, for any cyclist.
Why Consider Insurance?
Lets face it, a bike can be expensive. Add on your second or third bike, plus everything else in your Cycling War Chest and there can be plenty of dollars at stake.
When compared to your yearly spend on cycling equipment, the cost of insuring your Cycling Arsenal might be a small price to pay to protect your cycling assets.
What Is It?
Bike Insurance provides cover specifically for cyclists where other more general insurance such as Home Insurance may not. It is designed for the cyclist to protect property in the event of loss and damage in situations such as accident and crash damage, loss through theft. Some policies may also offer racing specific cover.
There are obviously many things to consider when choosing. The first one question is whether you want insurance at all. Many people, whether deliberately or not, choose a little product called “Self Insurance”.
So what is that I hear you ask?
Well, when a certain bank in Ireland was robbed to the tune of about a squillion dollars in around 2006, its ultimate owner, a certain Australian bank, chose to reassure those concerned by saying, “its ok, we chose to self-insure against this risk”.
Sounds good until you realise that self insurance is simply taking on the risk yourself, ie. no insurance. Many cyclists choose to go down the bike “self insurance” path. That is ok, however you should be aware of the risk that you are running.
Potential Bike Insurance Risks
Here are a few of the potential bike “insurance risks” that might be present in your life:
– Property (not just your bike) damaged in an accident;
– Damage to someone else’s property caused by you whilst on your bike;
– Driving into the garage with your bikes still on the roof rack (we all know someone who has this horror story)
– Theft (at home or elsewhere);
– Damage whilst racing or travelling
Just to name a few.
Who Offers Insurance For Cyclists?
Outside of the typical home and contents policy (which can be fine for many people – checking your current policy can be a good start), insurance tailored for cyclists is also offered through insurance companies offering bicycle specific insurance and cycling associations.
Specific “Bike Insurance” Companies
In Australia there are a few insurance companies offering cover specifically for cyclists. Because I can’t be seen to be recommending a financial product (lawyers do spoil everything), I can’t actually list them – but the power of Google is there to help – try “ bicycle insurance [insert your country]” and go from there.
Some of these insurers offer bike insurance as a part of Home Contents insurance while others specifically offer bicycle & equipment insurance.
Cycling Associations typically offer members a level of insurance via membership. The types of insurances on offer can cover all types of cyclists from commuters and recreational cyclists through to racing. Once again, check the policy.
Cycling Australia. This is designed to cover members with a range of bundled insurance options namely for racing cover. If looking for racing specific insurance, most Bicycle Insurance policies cover against ‘non-professional’ racing.
[Editor’s note: “Does this mean if I “LOOK TOO PRO” I might not be covered under my policy???].
As far as I am aware, CA’s insurance is one of the only insurances geared toward racing cover. Once again, you gotta read the PDS (you noticing a theme yet?).
What Other Types Of Cover Are Out There?
For many cyclists, there are a range of other measures of protection which may already be available to you. Some of these are outlined below, however it must be remembered many of these types of cover may be limited or may not offer the total cover you may require.
Generally you can insure your bicycle under an existing home contents policy but this may not provide adequate protection. Most Home Contents insurance covers the bicycle in the home, but is unlikely to provide protection away from home whilst out riding or racing and most likely will not provide protection against damage or liability. Most insurers require the bicycle to be listed (particularly if it is of a high $ value) on the policy and may cap the value of accessories/equipment, which may increase your premium.
Motor Vehicle Insurance
Dependent on the level of cover, motor vehicle insurance protects property not only against accidents but also theft from a vehicle. Many insurers cap the value of contents stolen from within a vehicle or may not cover a bicycle left on bicycle racks unattended or damaged as a result of accident.
Travel insurance protects against damage or loss whilst travelling and there are a range of specific travel insurers and some Bicycle Insurers offering travel Insurance as well.
Public Liability Insurance
There are of course other types of insurances for cyclists to consider such as Public Liability Insurance that covers against third party damage and injury.
What To Look For
The problem with insurance is that each policy is very complicated and its not until you start reading the fine print that you find each policy differs greatly. Obtaining an absolute statement on policy cover is extremely difficult when making a comparison between policies and of course every insurance claim is treated differently.
When researching insurance, ensure you read the PDS and do not rely on marketing materials or any generalised policy. Tailor your insurance cover to suit your needs and try not to choose cover purely based on the premium, choose on the level of cover the policy provides.
Some quick questions for your insurer may include:
- Am I covered while using the bike?
- Am I covered while the bike is not at home?
- Am I covered for liability in the event of an accident and if so does this cover both personal injury and property damage?
- Am I covered for damage as well as theft
- Am I covered while racing?
- Am I covered if I am overseas?
When considering policies there are many details to consider, some include:
- What is the limit on the maximum payout values?
- Most policies offer ‘new for old’ replacement policies however some have restrictions such as if declared a total loss after 2 years of purchase from new or if left unlocked or outside of view;
- Additional premiums may apply for equipment/accessories;
- Some damage may be considered repairable rather than replaced;
- Some accessories and equipment such as wheels may be required to be listed separately;
- Some insurers may require the use of specific locks;
- Some content insurers may not cover bicycles away from the home or require to the bicycle to be listed on the policy; and
- Some insurers offer a range of other insurances from Life to Travel insurance which may offer the convenience of bundling policies and insuring with the one company.
Insurance can be a minefield, a complicated minefield. Do not be afraid of insurance companies. Most are happy to work with you to provide cover that suits your needs.
The important thing is, do not take your current insurance or assumed insurances for granted. Consider all options, take photos of your property, record serial numbers, keep receipts and/or record costs, be aware of replacement values, talk to your riding buddies, seek advice from an independent insurance advisor and always ask questions covering a wide range of circumstances.
Disclaimer: This information is presented ‘as is’ and is not presented as insurance, financial or legal advice. This information is offered as an overview and is not a complete list of policy coverage, terms, conditions or exclusions. Ensure you read the Insurers Product Disclosure Statement, discuss the policy with the relevant insurance company and make decisions based upon your own individual circumstances. Insurance cover is subject to the Terms & Conditions of the insurance policy. Insurance Policies are renewed periodically and subject to change at any time without notice.