Cyclesure issues

[Patchelicious]

One more attempt to illustrate my argument.

 

bmw1za buys an Ultegra specced bike. His premiums are based on the fact that his bike has Ultegra parts on it.

 

He crashes the bike and damages the Ultegra shifters. He puts in a claim for new Ultegra shifters. The insurance company comes along and says that his brand of bike no longer sell bikes with Ultegra, they only have Dura Ace bikes. They claim that he is under insured because the only model available only comes with Dura Ace.

 

He has paid a premium on Ultegra parts, he has damaged his Ultegra parts and has claimed on his Ultegra parts. How the he'll can he be under insured? He has claimed for what he has paid for, nothing more.

 

They need to.compare apples with apples. They cannot compare his Ultegra bike to a Dura Ace bike and then say he is under insured.

As soon as Ultegra was discontinued and the only alternative was DuraAce, the premium should have been adjusted to the replacement value of the item that it would need to be replaced with.

 

It doesn't matter how you try and paint it, insurance is one of the oldest industries around and these types of scenarios have been around for ages.

[Eugene]

Cars are not relevant here. They are insured at current market value or financed amount whichever is higher, not replacement value

Most reputable (I emphasise reputable) insurance companies pay full replacement cost if a new car is destroyed or stolen within the first year of ownership.

 

Hence my example.

[Patchelicious]

Most reputable (I emphasise reputable) insurance companies pay full replacement cost if a new car is destroyed or stolen within the first year of ownership.

 

Hence my example.

CycleSure doesn't insure cars.....

[Eugene]

As soon as Ultegra was discontinued and the only alternative was DuraAce, the premium should have been adjusted to the replacement value of the item that it would need to be replaced with.

 

It doesn't matter how you try and paint it, insurance is one of the oldest industries around and these types of scenarios have been around for ages.

I agree if Ultegra was discontinued, but it hasn't. You can walk into any bike shop and buy any Ultegra part. Hence my argument, he was insured for a bike with Ultegra, he has damaged his Ultegra and he should be able to claim for his Ultegra.

 

What happens in my personal situation? If my Raleigh Team is destroyed, how will the insurance compensate me, considering carbon fibre Raleighs are not available any longer.

[Patchelicious]

I agree if Ultegra was discontinued, but it hasn't. You can walk into any bike shop and buy any Ultegra part. Hence my argument, he was insured for a bike with Ultegra, he has damaged his Ultegra and he should be able to claim for his Ultegra.

 

What happens in my personal situation? If my Raleigh Team is destroyed, how will the insurance compensate me, considering carbon fibre Raleighs are not available any longer.

WTF your example says it was no longer available, I was responding to YOUR example.

 

If your Raleigh has been discontinued, you better adjust your insurance accordingly and insure it at replacement costs. If it is destroyed as you state, you will paid out for the current sum insured. But if you scratch the crank you can't go claim R10k for a new one if your bike is only insured for R15k.

 

Insure your bike correctly, this isn't a difficult concept.

[Mountain_Goat]

By reading the comments above in earlier posts, am I correct in understanding that if your bike is under insured you only get paid out a percentage of what your bike is insured for in the event of damages? And in the event of a total loss such as a write off, you get paid out the full amount that you have insured your bike for irrespective of replacement value?

[bmw1za]

seeking insight  .. 2 x di2 Ultegra Sti's to be replaced and 1 x di2 ultegra rear deraileur ... 

 

ignore other little bits for now..

 

The price of these very available parts are exactly the same whether its on a 20 k bike or a 200k bike 

 

Claim is under 15 k, insured amount is more than double that ... its hilarious and in the grand scheme of things ... I am under-insured so , Tail between the legs and fork out to fix everything..

 

Strangely i didn't even request that the saddle, bartape and other little bits be replaced, I did not want to seem petty 

 

Spanner in the works quickly... Is the increase in premiums every year not supposed to assist with compensation in spite of "said item" depreciating in value?

[bmw1za]

By reading the comments above in earlier posts, am I correct in understanding that if your bike is under insured you only get paid out a percentage of what your bike is insured for in the event of damages? And in the event of a total loss such as a write off, you get paid out the full amount that you have insured your bike for irrespective of replacement value?

That IS  Exactly What They Told Me !

[HBO]

Well, I'm a broker for close to 20 years and this must be the first time that I've heard that average is applicable to all risk items....then again I only deal with reputable insurers.

 

Although this is new to me I'm not surprised by this. All item-specific insurance products (niche products) whether it is for cell phones only, bicycles, motor bikes, boats etc. have "funny" clauses/ excesses in their policy wording. This is to justify the lower premium.

 

On a standard personal policy where your whole portfolio is insured you have low risk items (building and contents) that subsidise high/ higher risk items. Also there usually are more than 1 specified item or more than one vehicle, so there is no need for "funny" clauses or excesses.

 

OP, if average is a clause in the contract then I'm afraid there is nothing you can do. Your only recourse might be to approach the FAIS Ombud and claim that Cycle sure didn't advise you to adjust the value annually and/ or didn't explain average and it's consequences to you. The onus will be on you to proof this. If all your correspondence with them was telephonically, you can ask for the recordings.

 

 

Just to explain average to you- that analogy of the gamblers confused me- lets say you have 2 guys buying a bike in 2014 for R 32 k each. Exact same bike.

 

A insures with Santam through a broker because he sees the benefit in that- he don't want hassles. B insures direct because he believes he will save some ZAR by cutting out the middle man and.. how difficult can insurance be, right? Both pays a premium of R 100 p.m.

 

A got reminded by his broker on annual renewal to adjust the value of his bike to replacement value. He does so and now in 2016 his bike is insured for R 72 k and he pays R 200.00 p.m.

B didn't get reminded and are still insured for R 32 k and pays R 120 p.m.- there was inflation increases.

 

Now both had an accident and has the exact same damage (parts) and the repair cost is R 15 k each. Now then, is it fair that both get reimbursed R 15 k although A paid a higher premium, or is it fair that B get reimbursed proportionally to the premium he paid and sum he insured? Just asking.

 

Now if you were insured with Santam- where I am, they would have settled R 15k. End of story. Average is not applicable to all risk items, only buildings and contents. If it was a total loss they would've paid R 32 k. The difference between R 32 k and R 72 k is for your own account.

 

OP what is not clear to me is whether you had Ultegra and now their replacement is for Dura Ace? I will definitely fight them on this, but it depends on how their policy is worded and how your bike is specified. I did not read through all the posts.

 

You can PM me if you are interested, but obviously I would like a fair opportunity to quote on your total portfolio. Business is business. 

 

edit: sorry for the long post

[HBO]

By reading the comments above in earlier posts, am I correct in understanding that if your bike is under insured you only get paid out a percentage of what your bike is insured for in the event of damages? And in the event of a total loss such as a write off, you get paid out the full amount that you have insured your bike for irrespective of replacement value?

Not right. If average applies then in case of total loss you will also get reimbursed proportionally as well. In this case about R 16 k less excess.

[Rocket-Boy]

I would have expected that they pay you out the R32k minus excess and make the shortfall your problem.

The formula they use seems like extortion.

[Rocket-Boy]

Well, I'm a broker for close to 20 years and this must be the first time that I've heard that average is applicable to all risk items....then again I only deal with reputable insurers.

 

Although this is new to me I'm not surprised by this. All item-specific insurance products (niche products) whether it is for cell phones only, bicycles, motor bikes, boats etc. have "funny" clauses/ excesses in their policy wording. This is to justify the lower premium.

 

On a standard personal policy where your whole portfolio is insured you have low risk items (building and contents) that subsidise high/ higher risk items. Also there usually are more than 1 specified item or more than one vehicle, so there is no need for "funny" clauses or excesses.

 

OP, if average is a clause in the contract then I'm afraid there is nothing you can do. Your only recourse might be to approach the FAIS Ombud and claim that Cycle sure didn't advise you to adjust the value annually and/ or didn't explain average and it's consequences to you. The onus will be on you to proof this. If all your correspondence with them was telephonically, you can ask for the recordings.

 

 

Just to explain average to you- that analogy of the gamblers confused me- lets say you have 2 guys buying a bike in 2014 for R 32 k each. Exact same bike.

 

A insures with Santam through a broker because he sees the benefit in that- he don't want hassles. B insures direct because he believes he will save some ZAR by cutting out the middle man and.. how difficult can insurance be, right? Both pays a premium of R 100 p.m.

 

A got reminded by his broker on annual renewal to adjust the value of his bike to replacement value. He does so and now in 2016 his bike is insured for R 72 k and he pays R 200.00 p.m.

B didn't get reminded and are still insured for R 32 k and pays R 120 p.m.- there was inflation increases.

 

Now both had an accident and has the exact same damage (parts) and the repair cost is R 15 k each. Now then, is it fair that both get reimbursed R 15 k although A paid a higher premium, or is it fair that B get reimbursed proportionally to the premium he paid and sum he insured? Just asking.

 

Now if you were insured with Santam- where I am, they would have settled R 15k. End of story. Average is not applicable to all risk items, only buildings and contents. If it was a total loss they would've paid R 32 k. The difference between R 32 k and R 72 k is for your own account.

 

OP what is not clear to me is whether you had Ultegra and now their replacement is for Dura Ace? I will definitely fight them on this, but it depends on how their policy is worded and how your bike is specified. I did not read through all the posts.

 

You can PM me if you are interested, but obviously I would like a fair opportunity to quote on your total portfolio. Business is business. 

 

edit: sorry for the long post

It doesnt explain that he was paying a monthly premium based on R32k though and they are not paying him out for that less excess. That part still doesnt make sense to me, but then it doesnt really need to, I have a broker to handle those things.

[Patchelicious]

Well, I'm a broker for close to 20 years and this must be the first time that I've heard that average is applicable to all risk items....then again I only deal with reputable insurers.

 

Although this is new to me I'm not surprised by this. All item-specific insurance products (niche products) whether it is for cell phones only, bicycles, motor bikes, boats etc. have "funny" clauses/ excesses in their policy wording. This is to justify the lower premium.

 

On a standard personal policy where your whole portfolio is insured you have low risk items (building and contents) that subsidise high/ higher risk items. Also there usually are more than 1 specified item or more than one vehicle, so there is no need for "funny" clauses or excesses.

 

OP, if average is a clause in the contract then I'm afraid there is nothing you can do. Your only recourse might be to approach the FAIS Ombud and claim that Cycle sure didn't advise you to adjust the value annually and/ or didn't explain average and it's consequences to you. The onus will be on you to proof this. If all your correspondence with them was telephonically, you can ask for the recordings.

 

 

Just to explain average to you- that analogy of the gamblers confused me- lets say you have 2 guys buying a bike in 2014 for R 32 k each. Exact same bike.

 

A insures with Santam through a broker because he sees the benefit in that- he don't want hassles. B insures direct because he believes he will save some ZAR by cutting out the middle man and.. how difficult can insurance be, right? Both pays a premium of R 100 p.m.

 

A got reminded by his broker on annual renewal to adjust the value of his bike to replacement value. He does so and now in 2016 his bike is insured for R 72 k and he pays R 200.00 p.m.

B didn't get reminded and are still insured for R 32 k and pays R 120 p.m.- there was inflation increases.

 

Now both had an accident and has the exact same damage (parts) and the repair cost is R 15 k each. Now then, is it fair that both get reimbursed R 15 k although A paid a higher premium, or is it fair that B get reimbursed proportionally to the premium he paid and sum he insured? Just asking.

 

Now if you were insured with Santam- where I am, they would have settled R 15k. End of story. Average is not applicable to all risk items, only buildings and contents. If it was a total loss they would've paid R 32 k. The difference between R 32 k and R 72 k is for your own account.

 

OP what is not clear to me is whether you had Ultegra and now their replacement is for Dura Ace? I will definitely fight them on this, but it depends on how their policy is worded and how your bike is specified. I did not read through all the posts.

 

You can PM me if you are interested, but obviously I would like a fair opportunity to quote on your total portfolio. Business is business.

 

edit: sorry for the long post

Just remember that CycleSure is a niche product and not an all risks one. As a UMA the product must have been sold to OP via a broker, so the onus was not on CycleSure to advise the client, advice would have been with a broker?

 

This isn't a Santam vs Hollard UMA thing, this is an advice thing. If his bike was covered under all risk on a standard house hold policy wth other underwriters they probably would have been paid similarly to what you said.

 

Would he have had the same bicycle specific cover for other things specifically cycling related? Perhaps not, hence the existence of product specialists.

 

As an independent broker, surely you cannot just say that Santam is the underwriter, nevermind the specific product that OP must choose, without doing a needs analysis of his required cover. Edit: we have had this discussion before.

[Seal]

Just remember that CycleSure is a niche product and not an all risks one. As a UMA the product must have been sold to OP via a broker, so the onus was not on CycleSure to advise the client, advice would have been with a broker?

This isn't a Santam vs Hollard UMA thing, this is an advice thing. If his bike was covered under all risk on a standard house hold policy wth other underwriters they probably would have been paid similarly to what you said.

Would he have had the same bicycle specific cover for other things specifically cycling related? Perhaps not, hence the existence of product specialists.

As an independent broker, surely you cannot just say that Santam is the underwriter, nevermind the specific product that OP must choose, without doing a needs analysis of his required cover. Edit: we have had this discussion before.

[eddy]

It doesnt explain that he was paying a monthly premium based on R32k though and they are not paying him out for that less excess. That part still doesnt make sense to me,

Maybe look at it this way even though it is a simplification.

 

Assume the R32k was made up out of R16k for the frame and R16k for the build kit. You pay a monthly premium of say R320. So, broadly R16 for the frame and R16 for the rest.

 

Break the frame and your R16 premium buys you a new R16k frame.

 

Next year the complete bike costs R64k but you maintain your premium as above.

 

If you break the frame, you still only have paid a premium for a R16k frame and you cannot argue that because you paid a premium to cover an entire bicycle for R32k, they should pay you the full assured value for the frame only (ie. For only half a bike).

 

It is only right that they pay 50%.

[Rocket-Boy]

Maybe look at it this way even though it is a simplification.

 

Assume the R32k was made up out of R16k for the frame and R16k for the build kit. You pay a monthly premium of say R320. So, broadly R16 for the frame and R16 for the rest.

 

Break the frame and your R16 premium buys you a new R16k frame.

 

Next year the complete bike costs R64k but you maintain your premium as above.

 

If you break the frame, you still only have paid a premium for a R16k frame and you cannot argue that because you paid a premium to cover an entire bicycle for R32k, they should pay you the full assured value for the frame only (ie. For only half a bike).

 

It is only right that they pay 50%.

Ok that makes sense. So if he say had the bike stolen they would pay out the R32k less excess then?