How To Review Your Bicycle Insurance Needs And The Cost Of Insurance

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In today’s world, the price of fuel is rocketing higher. Fossil fuels are running out. As this happens, more and more people are turning towards bicycles as their preferred mode of transport. This is a fact that cannot be ignored.

However, it should also be noted that most of you bike owners haven’t even considered the bad things that could happen on a bike.

Just because it is slower doesn’t mean that it is safer to use. Whether you are tearing up that hard to conquer trail on your mountain bike, or speeding through the city streets on your lightweight alloy bike, you are going to put yourself in danger.

Since bikes are some of the most exposed and hard to see vehicles on the streets, the incidence of accidents is high. This can also be because your wheel decided to give up on you at the very last moment, or your brakes decided to fail you.

Unlike vehicles, which have e-brakes and other trappings, bikes cannot be stopped that easily. Another horrible thing that could happen is that your bike gets stolen.

A bicycle is probably the easiest vehicle to hijack. It involves cutting open a lock. Simply put, there is a lot of bad stuff just waiting to happen to your bike. In order to protect yourself against this, you need to get yourself insured.

Cyclist racing in an event

What insurance plan should I choose?

There are a whole range of different insurance and loan plans for bicycles. However, you don’t have to go around picking the most expensive. Make sure that you know exactly what you need your insurance to cover. Review the costs of each plan as well. Then, make an informed decision.

For example, you probably won’t need fire insurance if you live in a cold part of Australia. While this may not be the ideal example, you get the idea. It is, however, a great idea for any cyclist to get themselves covered by even the most basic of insurance plans. The point is, choose a plan based on your needs, location and budget.

There are a ton of insurance companies out there. A lot of them offer you bike specific insurance plans. These cover a wide range of insurance needs and requirements, some of which my concern your specific wants, some of which may not.

Because of this, it is always important that you check out the PDS (Product Disclosure Statement) for that company’s bike insurance policy THOROUGHLY before making any hasty decisions. You don’t want to wind up paying for insurance you don’t really need.

For example you wouldn’t need insurance against theft if you lived one hundred miles in the middle of nowhere with a koala bear name Jack for company.

Make sure that you browse through websites, read reviews and call agents to find out all the information you can about the insurance coverage before entering into anything legally binding.

Common misconceptions about bike insurance

  • Bike Insurance is not necessary if you have home insurance – FALSEYou may have thought that insuring your home and “personal property” will grant you full coverage against the possible risks of owning a bicycle. However, this is not true.Sure, most home insurance policies provide extremely basic coverage for your bicycle (such as anti-theft), but it definitely does not cover everything important.For example, if you are a hardcore cyclist and own extra equipment for ripping up those trails, the home insurance policy most likely won’t cover the theft of this equipment.

    The homeowner’s policy also won’t cover the cost of damages incurred during accidents. Most people assume that it does, because no one bothers to read the entire policy document. However, it is very important that you do.

    You need to know exactly what you will be getting yourself into.

Woman being applied first aid due to bike accident

  • Bike insurance is covered under “special coverage” in home insurance – FALSEYou may think that the home insurance plan you currently have covers anything and everything related to your home and bicycle(s). However, this may not be true.Upon reading the fine print in most home insurance policies, you will find that the entire cost of all incurred damages is not covered. There are a lot of restrictions included in most home insurance policies.If you were to get in an accident and damage certain parts of your bike, you would be paid a lot less (or nothing) than the cost required for spare parts and to fix your bicycle.

    You need to speak to an insurance agent to make sure you know exactly what is covered in your insurance policy. If you ask an agent, they are required by law to tell you everything, not omitting any details. Be sure of the restrictions.

  • Using the best bicycle locks will protect me against theft – FALSE
    Just because you buy the most secure bike lock on the market doesn’t mean you will be 100% safe against bike theft.If you have an expensive bike, a thief will most likely want it. Every lock can be broken with enough skill and time. You can’t afford to take the risk of having it stolen and losing your investment.Getting bike insurance will cover you in case this happens and your bike does get stolen. This is a very high possibility so you may as well get insured against it. In fact, studies have found that a bike is stolen every 3 minutes.
  • Bike Insurance will cost a lot – FALSE
    There is no reason for insurance on your bicycle to be expensive. If you have a bike worth thousands of dollars, you might think that your insurance will cost about the same. This has never been more false.The average bike insurance policy actually costs about $250 to $400 a YEAR. Weighing this against the price and value of your bike, you can see that it is an incredibly worthwhile investment.
  • I don’t need insurance if I am not a competitive cyclist – FALSE
    This is one of the most common excuses for not getting insured. You need to understand that no one is safe. Even if you simply use a bike to get to the store and back every week, it could still get stolen. You could still get in an accident and have to pay damages.It is always a better choice to get insured against these things. They could happen to anyone, at any time.

White bike stuck in a tree

Typical Bike Insurance coverage

The amount and depth of coverage you get depends on the insurance company you go with. It also depends on the type of bike you have. There are some questions you need to ask yourself and your insurer before agreeing to a policy:

  • Does your insurance cover you while using your bike? This a must-ask question from your insurer. The insurance policy has to cover anything that happens to you or the people around you while you are using the bike.This includes hitting animals, people or even trees (if you hit trees a lot, maybe you should consider a taxi instead).Make sure you ask your insurance agent these questions, or look for answers in the PDS.
  • Does the insurance cover my bike when it isn’t at home? This is very important for frequent commuters and cyclists. Your insurance plan needs to cover anything that happens when your bicycle is either out on the streets or the trail.For example, some idiot in a big, gas-guzzling truck could hit your parked bike outside that coffee shop you love.You need to be secure knowing that you will be covered for damages in this case, even though the accident didn’t occur at home. This is one of the biggest restrictions when it comes to substituting home insurance for bike insurance.
  • What exactly is covered in an accident? Different insurance companies will have different answers to this question. You need to pick one that has the most comprehensive cover.For example, will the insurance cover the cost of personal injury, as well as the cost of spare parts?Some Good Samaritan insurance companies even extend to the damages caused to the other parties involved. However, these insurance policies may be a little pricier.
  • What about theft? Theft of bicycles is a growing problem everywhere. You need to ask your insurance provider if you will be wholly covered for theft, wherever you happen to be.Also, check if they will cover you against damages incurred DURING the theft, such as the bike lock, and other securing devices and equipment.

Bicycle thief wearing a mask

  • What about overseas insurance? If you are someone who likes adventure biking everywhere in the world, you need to check this one out.If you bike overseas a lot, you need to be sure that you are covered against accidents, injuries and even theft of your bicycle or equipment while abroad.Most insurance companies have special plans for this. They may cost a little more, but they are definitely worth looking into.

Other insurance needs you may want to consider

In addition to the 5 main requirements you should think about, there are other specific requirements one may consider.

Breakdown services are offered by many insurance companies as an optional addition to their packages. This will cover you should your bike decide to give up on you halfway up that extreme trail you have had your eye on for a while.

Of course, this may cost you extra. However, if you are a person who uses your bike on challenging endurance trails a lot, then you probably should request this as well.

Fire damage insurance is essential if you feel like you live in a risk zone. This is usually offered as part of the basic insurance package, but it won’t hurt you to check and be sure that you are covered against this.

Rider on his bike in rocky terrain

An extension of this is equipment damage. If you are a hardcore enthusiast, you probably have a lot of expensive sporting equipment and apparel lying around. You should check if your insurer offers coverage for damages to these as well. Most places don’t, but you just might come across some heaven-sent insurance company that does.

Another thing you may want to consider if you have a family is the third party coverage. Does your insurance coverage extend to when someone else is using the bike? Perhaps your friends borrow it often. Perhaps your kids can’t keep their hands off it.

Either way, you need to see if you can cover your bike even while you aren’t the one using it.

Happy family riding their bikes together

Make sure you ask your insurer for a comprehensive list of all the basic and value-added services they offer with their bike insurance policy. You may be pleasantly surprised at the low cost of most additional services.

Common restrictions in bike insurance

These are things you need to consider when something does happen to your bike and you place a claim. Some insurance companies may have restrictions in the fine print you didn’t see.

Before getting the insurance plan you have decided on, ask these questions:

  • What is my maximum payout? Depending on the cost of your bike, repairs and spare parts may vary in cost. Replacing or repairing the equipment and other damaged items can also be rather expensive.Ask your insurer what your maximum payout is, for different scenarios. You need to be sure that you are fully covered in case anything goes wrong.
  • Replacement Policies A lot of companies offer to completely replace your bike if lost or irreparably damaged. However, make sure you read the fine print.There may be restrictions in place including the make and model of your bike, the time since you reported it missing or laid a claim, or even where the bike was when whatever happened, happened.Check properly so that you know what measures to take when applying for a replacement.
  • Equipment Insurance You should check with your insurer as to coverage of accessories, and racing or endurance equipment you have for your bike.Some companies may charge a lot extra for insuring these items. Be sure you ask them specifics.

Bike repairing. Spare parts and tools

  • Other Restrictions Some of the main restrictions when it comes to bike insurance also include:
    • The requirement for your bike to be made by a recognized company before being eligible
    • The need for spare parts to be listed separately
    • Wheels and gear systems listed separately
    • Specific locks must be used when locking your bike under a certain insurance plan
    • Overseas insurance may not cover certain countries

The biggest piece of advice that can be given to you is to read the fine print in the policy. Check out the PDS minutely. Do not be afraid to ask the agent for details on everything.

You are the person who will be liable should things go south otherwise.

The cost of insurance

The cost of insurance policy should be a major deciding factor when getting your bike insured. How the premium is calculated is a simple process. Different insurance companies have different ideas as to how to settle with you.

However, in general, the amount that is paid out is by default the ACV (Actual Cash Value) of your bike.

This is the cost of the bike bought brand new, minus the value of depreciation.

Depreciation is the amount the value reduces every year. This is a standard value for different products.

The process of claiming a settlement

The first thing that happens when you lay an insurance claim is that you pay the premium. The premium is the remaining cost of the insurance payments, plus a previously agreed-upon value.

This is calculated by the insurance company and depends on the coverage you chose, the value of the bike, the value of equipment, and others. You must then pay off any excess. This is determined between you and the insurer at the time of agreeing upon the value of the payment.

After this, the insurance company will conduct their investigation, possibly try to worm their way out of payments, and then will give you your settlement. There have been many horror stories about racers and riders who have not been paid more than the price of a stick of chewing gum, so be sure you read the reviews on the company before going to them for your insurance coverage.

Two riders crash with each other in a race

Selecting an insurance policy can be a difficult process. However, it is one of the best choices you can make for yourself and your bike. You won’t regret it later, in case something happens.

It always pays to be prepared for the worst.

Also Read: Best Mountain Bikes Under $500


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