Cycling Insurance - What you need to consider
Cycling is generally considered a safe mode of transport and is enjoyed by millions, however, it's important to acknowledge that accidents do happen every now and then. There are many ways to decrease your chances of being involved in an accident, but if you do have the misfortune of being caught up in something, what happens next?
The answer to this question partly relies on whether you have insurance or not. If you're injured, cause injury to someone else, and/or cause damage to someone else's property you could be left out of pocket or worse, liable for damages if you are uncovered.
What’s the risk?
Picture the following situations: if you rode into the back of a parked car, hopefully you're OK but you could damage both your cycle and the car; or when riding on a shared pathway you knock someone over accidentally as you attempt to pass. In these examples insurance could lessen the hassle and damage to your finances.
Some more risks
Here are a few more potential risks that might be present and be costly without insurance:
- Property (not just your bike) damaged in an accident, yours and others;
- Damaging bikes while attached to the car, such as driving into the garage with your bikes still on the roof rack
- Theft (at home or elsewhere);
- Injury to someone as a result of your actions while riding – you touch another rider’s wheel at the lights and they fall and break their wrist for example.
There are plenty more but you get the idea.
Insurance you may already have
Start by seeing if your Home and Contents insurance covers theft of cycles and check on the specifics and your excess. Your car insurance may also provide a measure of protection while the bike is in transit, but watch out for the limits and terms like market value.
If you are a member of a cycling organisation such as Bicycle Network, Bicycle Queensland or Cycling Australia you may also already have some cover. If you are travelling and have insurance then your travel insurance may protect against damage or loss of your cycle.
Read the PDS of any cover you have to find out what’s covered, the limits and excess information.
Cyclist Liability Insurance
If you are covered for loss and damage, you may wish to consider taking out Cyclist Liability Insurance to cover you for third party damage and injury. This is similar to how motorists have liability cover to protect themselves from liability where they are at fault.
Joining your local cycling association may provide you most of the cover you need. Insurance is usually offered as one of the benefits of membership and covers injury, liability and income protection but generally not theft. Read the conditions for the insurance cover available with membership carefully.
Racing and Insurance
Most insurers will have options to cover against ‘non-professional’ racing on policies so discuss this with your insurer to find out how much this will affect your premium and remember to ask for written clarity on their definition of non-professional racing.
For professional racing you could opt to join Cycling Australia which provides cover for members with a range of bundled insurance options for racing cover. Read more about their membership benefits here.
What to look out for
The problem with insurance is that all policies will be different and they are complicated. It is critical that you do not rely on marketing materials or any generalised policy statements. Never make a decision without obtaining the full policy wording.
What sort of cover
Decide exactly what cover you need and find a policy that matches this need. Try not to choose cover purely based on the premium. Choose on the level of cover the policy provides. Of course if you have simple needs then your premium will be lower than someone with more expensive requirements.
The sort of questions to ask any insurer:
- 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 injury and property damage?
- Am I covered for damage as well as theft (decrease your chances with a tough bike lock)
- Am I covered while racing?
- Am I covered if I am overseas?
- Will this policy provide income protection?
- What are my excess obligations?
- Will the policy work on agreed value or market value or new for old?
Agreed vs market value
Agreed value is an amount you agree with the insurer to insure your bike for, and includes any modifications, options or accessories you have – carbon wheels for example.
Whether you have a fixie or an electric bike, market value is your insurer’s assessment of the bike’s value at the time of damage or loss. Market value may be significantly below what you think it is worth.
New for Old
Your policy may also have a ‘new for old’ replacement clause, so you will be paid out for a new replacement. However there is usually a restriction on the age of the bike. Again, you must read the PDS to decide if this is right for you.
Do not be afraid of insurance companies and if you do not understand ask them to explain. Take the time to find a policy, or create one, which provides cover to suits your needs. Take your time reading the PDS before committing, and if you don’t understand it seek help.
If you do take insurance, answer the declarations carefully as any detail that is not correct could influence the likelihood of cover when needed. Also, make sure that you take photos of your property, record serial numbers, keep receipts and/or record costs.
Editor’s note: This article is about providing you with some facts to help you decide if insurance if right for you. The article does not contain specifics on insurers or their policies as we are not qualified to give you financial or legal advice.