Naughty, naughty.

[Spurs]

Given the cost of bicycles and rapid depreciation should they still be insured at replacement value?

 

If I want to insure my 2013 Epic I just give a quote for a 2020 equivalent. But my bike is worth nothing now, it doesn't even have boost or a modern geometry.

 

This must be a reason for many bikes being stolen. For some it's not so much insurance as an upgrade policy.

 

Yes bikes need to be insured at the current replacement value.  I also have a 2013 epic and it's insured for 2020 replacement value.  

 

If you only insure to the value of your original bike, and you claim for an accident, for instance R5000 claim for certain parts to be replaced, they will only pay a % of that claim which is the comparison between your insured amount (R36k) and the total replacement amount, and in the instance of my Epic, it would likely be around 50%.

 

But agreed, constantly insuring for the latest model is certainly motivation for fraudsters to have their bikes "stolen".

 

EDIT: unless of course you choose to under insure and accept that you'll be paid out 50% of the value of the replacement parts and use that to find second hand parts etc.

Edited May 14, 2020 by Spurs

[Larry King]

Tronk toe

[Captain Fastbastard Mayhem]

wow I had no idea it could go this far !!

Yup. It's fraud. Plain and simple. 

[Steven Knoetze (sk27)]

Yes bikes need to be insured at the current replacement value.  I also have a 2013 epic and it's insured for 2020 replacement value.  

 

If you only insure to the value of your original bike, and you claim for an accident, for instance R5000 claim for certain parts to be replaced, they will only pay a % of that claim which is the comparison between your insured amount (R36k) and the total replacement amount, and in the instance of my Epic, it would likely be around 50%.

 

But agreed, constantly insuring for the latest model is certainly motivation for fraudsters to have their bikes "stolen".

 

EDIT: unless of course you choose to under insure and accept that you'll be paid out 50% of the value of the replacement parts and use that to find second hand parts etc.

 

I 100% do not agree, but am open to be explained why my understanding below may be wrong.

You should insure the bike for its replacement value, market related, not the equivalent new bicycle.

 

What you have described would be like insuring a 2013 VW polo for the value of a 2020 polo. 

You are paying too much in premiums firstly, but secondly the insurer will not pay that out. They will not even pay a percentage. They will get you to submit a quotation from a LBS for the cost of replacement for your 2013 bike. Any difference would be for your account.

 

The insurer is not there to put you in a better position than you were, i.e; on a 2020 spec bike.

[Captain Fastbastard Mayhem]

I 100% do not agree, but am open to be explained why my understanding below may be wrong.

You should insure the bike for its replacement value, market related, not the equivalent new bicycle.

 

What you have described would be like insuring a 2013 VW polo for the value of a 2020 polo. 

You are paying too much in premiums firstly, but secondly the insurer will not pay that out. They will not even pay a percentage. They will get you to submit a quotation from a LBS for the cost of replacement for your 2013 bike. Any difference would be for your account.

 

The insurer is not there to put you in a better position than you were, i.e; on a 2020 spec bike.

You're wrong. 

 

Bikes and other equipment, except for cars (and I think boats and maybe planes) are insured against their new replacement cost. That's SOP for short term insurance, and why companies have marketing drives to ensure you're properly insured for the item's replacement value. 

 

If your bike, tools, jewellery etc are stolen, insurers ask for a replacement quote from your LBS for the new / equivalent of the stolen model. 

 

You can CHOOSE to insure your bike for a % of its new replacement cost, but some insurers will "average" your claim and you'll only get a percentage of the underlying cost of the things that break, which is calculated on a ratio of insured value:replacement value. This means that the only time you'll get paid out in full (again, with certain insurers) is if there's a total loss. 

 

Cars (as said above) operate on a different model.

Edited May 14, 2020 by Captain Fastbastard Mayhem

[Patchelicious]

You're wrong.

 

Bikes and other equipment, except for cars (and I think boats and maybe planes) are insured against their new replacement cost. That's SOP for short term insurance, and why companies have marketing drives to ensure you're properly insured for the item's replacement value.

 

If your bike, tools, jewellery etc are stolen, insurers ask for a replacement quote from your LBS for the new / equivalent of the stolen model.

 

You can CHOOSE to insure your bike for a % of its new replacement cost, but some insurers will "average" your claim and you'll only get a percentage of the underlying cost of the things that break, which is calculated on a ratio of insured value:replacement value. This means that the only time you'll get paid out in full (again, with certain insurers) is if there's a total loss.

 

Cars (as said above) operate on a different model.

It is this under insuring and only getting the full pay out on total loss that causes people to drive over their own bike frames.

 

Just insure your bike for replacement value.

[Showtime]

I understand how short term insurance works. Was just wondering aloud whether a R100k bike is more like a diamond ring or more like a car with a book value.

 

Feels like it was grouped with cameras etc in a different era.

[Captain Fastbastard Mayhem]

I understand how short term insurance works. Was just wondering aloud whether a R100k bike is more like a diamond ring or more like a car with a book value.

 

Feels like it was grouped with cameras etc in a different era.

Cameras are the same. New Replacement Cost. 

 

So yeah, it's on the personal effects side of things, not the motorised transport side of things. 

[Showtime]

I 100% do not agree, but am open to be explained why my understanding below may be wrong.

You should insure the bike for its replacement value, market related, not the equivalent new bicycle.

 

What you have described would be like insuring a 2013 VW polo for the value of a 2020 polo.

You are paying too much in premiums firstly, but secondly the insurer will not pay that out. They will not even pay a percentage. They will get you to submit a quotation from a LBS for the cost of replacement for your 2013 bike. Any difference would be for your account.

 

The insurer is not there to put you in a better position than you were, i.e; on a 2020 spec bike.

I agree with your thinking. But the second hand car market is a well established and understood industry so current value can be defined based on age and miles.

 

For bikes it can best be described as "very little" or "it depends".

 

But insurance that puts you in a hugely better position than before will encourage fraud.

Edited May 14, 2020 by Showtime

[Sbloomer]

That's why I scan every invoice for everything worth insuring, or have in writing about or photographs of stuff I have bought second hand.

 

It also helps when you forget about stuff you should have claimed for.

 

I had my garage raided and luckily the insurance paid out for everything I claimed for, until I needed that hugely expensive Torque Wrench, when working on my car, or that set of router bits (and forgot to claim for)

 

But I hear you.  the OP makes me laugh

 

I know I shouldn't be laughing, but I am. Loud, and hard. 

 

Fkers like this are why our premiums are so high, and why I'm likely to get a grilling by the assessor that's going to be coming to see me next week after my garage got broken into and 50k plus of tools, kids bikes and sound system got swiped. 

 

Luckily they left some of the carry cases behind, but as I've inherited a shedload of tools that DIDN'T have carry-cases, that side of things is gonna be difficult to prove ownership. 

[Sbloomer]

It is much much more than that.

 

Here is a snippet of a slide I did. Fraud is so big that we have multiple eco-system partners that exist solely to try and drive claims fraud down. It is one of the biggest growth areas of AI in insurance at the moment, both at client acquisitions stage (to drive down chance of having fraudsters on book) and at claims registration.

 

If you submit a claim, with some of this tech, it will return a % likely hood of fraud on that claim, by looking at hundreds of data points, bureaus, social media, payment histories etc..... we have even started intergrating the use of Luis (Microsoft's AI super computer) to use congnitive services to score the chances of you lying when you submit your claim by video.

 

You must be with Naked?

[DieselnDust]

Given the cost of bicycles and rapid depreciation should they still be insured at replacement value?

 

If I want to insure my 2013 Epic I just give a quote for a 2020 equivalent. But my bike is worth nothing now, it doesn't even have boost or a modern geometry.

 

This must be a reason for many bikes being stolen. For some it's not so much insurance as an upgrade policy.

 

 

it's really up to the insurer to manage this via asking for an invoice for the bike and a serial number.

If yo over insure they charge you as per a new bikes premium. Often they will flag that you over insured an old bike and only pay out what your risk was i.e the market value of the old bike. Overinsuring isn't a crime. Making something happen to your old bike to get a new one well that's going to be a problem.

Edited May 14, 2020 by DieselnDust

[DJR]

It is much much more than that.

 

Here is a snippet of a slide I did. Fraud is so big that we have multiple eco-system partners that exist solely to try and drive claims fraud down. It is one of the biggest growth areas of AI in insurance at the moment, both at client acquisitions stage (to drive down chance of having fraudsters on book) and at claims registration.

 

If you submit a claim, with some of this tech, it will return a % likely hood of fraud on that claim, by looking at hundreds of data points, bureaus, social media, payment histories etc..... we have even started intergrating the use of Luis (Microsoft's AI super computer) to use congnitive services to score the chances of you lying when you submit your claim by video.

I wish they would do that for medical aid / insurance claims too. It will probably improve health services more than any national health scheme ever could. Assess truthfulness before accepting a client, even use the AI version of a polygraph test, then monitor claims intelligently to reduce fraud, both on the provider and the user side. Catch fraudster once, end contact, lay criminal charge, banned for life with all insurers. The honest people will score. Costs will come down, more will be able to afford it.

[Captain Fastbastard Mayhem]

I wish they would do that for medical aid / insurance claims too. It will probably improve health services more than any national health scheme ever could. Assess truthfulness before accepting a client, even use the AI version of a polygraph test, then monitor claims intelligently to reduce fraud, both on the provider and the user side. Catch fraudster once, end contact, lay criminal charge, banned for life with all insurers. The honest people will score. Costs will come down, more will be able to afford it.

Oh, they do. Fraudulent claims all over the place, D. It's a mega problem. But that's why there's the records that each insurer sends to the central body. For things like this to catch non-disclosure, fraud etc. 

[Patchelicious]

You must be with Naked?

No I am not. But I do know them and their backers.

 

They have an interesting proposition. 

[DieselnDust]

I agree with your thinking. But the second hand car market is a well established and understood industry so current value can be defined based on age and miles.

 

For bikes it can best be described as "very little" or "it depends".

 

But insurance that puts you in a hugely better position than before will encourage fraud.

 

 

Bingo!

 

hence every year you have to submit a new quote for your bikes current value and that has to come from a trusted bike shop. Trust me assessors know who the honest ones are and who the scammers are. Use a scammer for a quote and they wil go and get their own quote from someone they trust plus you will get snaaied for trying to pull a fast one.

Just be honest. Buy an expensive bike, insure your risk for what is it and if something happens, no problem they will pay,

Buy a turd and polish it on the insurance policy...........papa wag