BARNABY’S BLOG: Understanding How Bicycles are Insured

BY BARNABY JOYCE
Joyce Insurance

When the warm weather arrives, many bike owners dust off their bicycles and hit the road. Whether bike owners plan to participate in competitions or just take a ride around the block with the family, it is important for them to understand the rules of the road. It is also important to be adequately insured.

Insuring A Bicycle

Bicycles vary greatly in price these days. A simple model may cost several hundred dollars, and a racing bike may cost several thousand dollars. Personal property provisions in a homeowners or renters policy cover bicycles. This means bikes that are damaged or stolen are usually covered. Bikes stolen from cars are also covered under many policies. For personal property coverage, there are two options: Replacement cost coverage and actual cash value.

Replacement Cost Coverage

This type of insurance provides reimbursement for the cost of replacing a bicycle with a similar one at the current cost. Replacement cost coverage usually costs about 10 percent more than its alternative. However, it is still a wise investment.

Actual Cash Value

This option provides reimbursement for the actual value of the bicycle at its current age. This means a bicycle that is five years old would be valued at the cost of a comparable product. However, depreciation for the bike’s age would be calculated and deducted from that value.

Liability protection is also granted in a homeowners or renters policy, so harm caused to others on their property will be covered. For example, if a policyholder crashes into a person on that person’s property and causes injuries, the policyholder’s insurance company will cover up to a specific dollar amount. It is important for all policyholders to know what their maximum coverage amount per incident is.

Most people are insured for an amount between $300,000 and $500,000. However, some people purchase umbrella policies to expand that amount. The umbrella policy’s benefits kick in when the homeowners policy is maxed out. There is also no-fault medical coverage on a homeowners policy. This coverage usually ranges between $1,000 and $5,000. In the event of an injury, the injured party can simply submit a medical claim to the policyholder’s insurance company for hospital bills. Keeping a policy updated is the best way to avoid an expensive lawsuit.

After purchasing a new bicycle, save the receipt. Call an agent immediately to notify him or her about the new purchase. Keep in mind that helmets, pumps, saddle bags, lights and special clothing should be included on insurance. People who own very expensive bicycles should purchase endorsements for their renters or homeowners policies. Many insurers have special endorsements for sporting equipment, and some even have specific endorsements for bicycles.

Insurance is certainly one of the most important aspects of bicycle ownership. However, safety is equally crucial. To stay safe on the road this year, consider the following tips:

– Always wear a helmet.

– Make sure the bike fits properly and does not have any unsecured parts.

– Ride on the correct side of the road, watch for traffic and use hand signals.

– Learn and follow all the rules of the road.

– Always stay alert, and be aware of surroundings at all times.

– Avoid wearing headphones or a cellular headset while riding.

– If necessary, take safety classes before hitting the road.

– Be more visible by wearing bright colors, using lights and wearing reflective gear after dark.