Gravity will be inviting guest writers to contribute to our blog to cover interesting topics that customers have been asking us about in the shop. In the first of this series of occasional articles we have invited passionate mountain bikers Mark Rogers and Scott Stephen from Abbott Insurance Brokers to run us through the important topic of how to Insure your Dream Bike, a topic we have noticed incites heated debates on Internet forums whenever it is mentioned. Read on for their helpful breakdown of this important topic.
Trail guide to insuring your bike
After paying a small nation’s deficit for your dream bike, what’s your next move? You may think it’s a quick upload to your socials featuring said bike, or an inaugural outing (followed by a cleaning sesh), but you’d be wrong. Your next move is to protect your bike – from unscrupulous characters bent on flogging your ride and from overzealous riders smashing it out on the tracks, trails or tar seal. (Yep, that’s you.)
But here’s the thing, it’s not simply a matter of calling your insurer and adding the bike to your contents policy and job done. No, not with that level of outlay.
Insurance policies are just like bikes in that they’re not all created equal, so you need to do your homework or, better yet, get someone else to do the homework. (Yep, that’s us.) So before you make that call, here’s everything you need to know.
The right insurance cover
Bikes can only be insured in New Zealand as part of a domestic contents policy. Given the rising trend in bike ownership for sport, recreation and commuting, and the uptake of e-bikes, that’s something we’re actively trying to change, petitioning insurers to underwrite a standalone cover for bikes. But that’s another story – for now, if you want to insure your bike, you need a domestic contents policy in place.
Unfortunately, bikes are often boosted so insurers may insist you provide them with proof of purchase, the serial number and a picture of the bike. Your bike shop will typically keep a record of your bike’s serial number, but if you buy online or second hand, keep a record of it yourself, along with your proof of purchase etc. It can help avoid any hassles at claim time, which leads us to the next point.
Check the insurance policy wording
Policy wordings are not all the same with insurers offering different levels of cover and optional extras for you to consider. This is the bit where you have to actually read the policy (or talk to someone who already understands the differences).
Some contents policies will provide replacement cover that is capped at a dollar amount, but also include a time limit. This means the insurer is willing to pay the insured value for the bike except for bicycles (including e-bikes) more than 3 years old. In this situation if your bike is more than 3 years old the insurers will reduce any payments to the bike’s current secondhand value.
Other policies will cover a bike for replacement value regardless of age. So, say a bike cost $6,000 new and you have it specified at $6,000 but is now 4 years old, it’s still covered for full replacement.
So, make sure your current contents policy does the job you need to protect your bike. If it doesn’t, it could be time to shop around.
The price is the price, isn’t it?
Once you’ve identified exactly what cover you’re getting under the insurance contents policy, the next decision is how much to insure your bike for. That may sound pretty straightforward if you’re insuring a bike you have literally just purchased, but most insurance policies are written on a replacement wording with “a maximum of the Sum Insured”. It means you need to ensure the Sum Insured you select is enough to replace your bike with an equivalent model, remembering to take in to account any awesome discounts you received from your local bike shop, or impending price increases because of global scarcity of bikes (Read more about this topic HERE).
Should you declare your bike as a specified item to your insurers? It depends. Most home contents insurance policies will provide “replacement cover” up to a certain dollar amount, known as a sub limit. Usually, this limit is $3,000 or $5,000. If the replacement cost of your bike is more than this sub limit (and we know that many bikes are these days), then it will need to be specified on the policy and the insurer will most likely charge an additional premium. Exactly how much will vary depending on a wide number of factors.
The fine print: the Devil IS in the details
You guessed it, different insurance policies will have different exclusions or clauses in them. When it comes to claim time, the devil is very much in the detail and these exclusions or clauses will have a very real effect on if you are covered or not.
Here are some commonly included exclusions that might catch you out: “There is no cover for bikes while used in a paid entry event” and “There is no cover for bikes when used off road”. So, if you are an avid XC racer and you damage your bike at an event, like the Coppermine, you may not have cover. If you’re a roadie, then the “no cover when used off road” exclusion probably isn’t going to be too much of a concern, however, another common exclusion “There is no cover for theft unless the bike is stolen from a locked building or vehicle” may very well put a damper on things if your bike is stolen from outside a café while you’re enjoying a post ride flat white.
So, whether you’re a lycra-clad coffee connoisseur or a baggy short, nobbily-tire mountain biker, just make sure you understand what you do and don’t have cover for by reading the policy documents.
Online or local bike shop?
In today’s world of online shopping, next day delivery, and direct to customer only brands the humble local bike store can often be overlooked or pushed to the side as being inconvenient or too expensive compared to buying direct.
But what you get at your local bike shop is knowledge, experience, a relationship, and advice. Sure, you may pay a few dollars more for an item than you would if you purchased it online, but you can also be confident that it’s the right product for you because the person in the shop took the time to talk to you and learn about what you do, how you do it, and then recommended the best product for you based on your needs.
The same applies with insurance - do you go direct or through a broker? Yes, buying direct can be quick, cost effective and relatively hassle free. But if you need to make a claim, you’re also dealing directly with the company that sold you the product and stands to make a loss on that sale with every claim against the policy. Some people are happy to take the risk things may be trickier at claim time and are prepared to do the hard yards with the insurer if it comes down to it.
Others are happy to delegate that to an intermediary and that’s where insurance brokers come in. We’ll work through your requirements and preferences to better understand your needs and then recommend insurance options to suit and all with the promise we’ll be there for you at claim time to ensure you get what you’re entitled to receive.
It helps if your broker is a bike nut
We get bikes and understand how much you love your bike. Our aim is to provide you with the insurance solution best suited to your needs, by getting to know you and your requirements (domestic or commercial) and using our experience and industry knowledge to recommend the products you need to replace your pride and joy should the worst happen.
And then we’ll talk bikes. A lot.
Check out your local insurance broker on Insta @abbott_insurance_nelson or call into our office at Level 1, 37 Bridge Street.
The good buggers at Abbott Insurance have been insuring Gravity Nelson for many years and riding bikes for even more years. They are also the main sponsors of the 2021 Coppermine mountain bike race. They know insurance and know bikes so give them a call to chat about insuring your dream bike and avoid possible traps or pitfalls if you need to make a claim.
Do you have a topic around biking, bikes, mountain bikes and riding that you would like us to cover off? get in touch, and we will hunt down an expert to write about it for you.