cycle insurance companies

[WR 1.0]

but as Porky mentioned, there are always exceptions but option 2 would apply 99% of the time. The previously mentioned policy wording aka "Terma & Conditions" of your insurance policy ususally states that all items should be insured for their full replacement value. If you choose to underinsure, technically you are not complying with the terms of the contract, so why should the Insurer?

[rad006]

Ok so from the above 2 is correct is 1 correct as well?

My point is I dont want to be underinsured, as well as not being told that sorry you may have been paying for 30k and 30k is replacement but we paying you less. I know excess comes off but im talking what they will pay out.

[WR 1.0]

Ok so from the above 2 is correct is 1 correct as well?

My point is I dont want to be underinsured' date=' as well as not being told that sorry you may have been paying for 30k and 30k is replacement but we paying you less. I know excess comes off but im talking what they will pay out.

[/quote']

......but if you are paying R30k and replacement is R30k, you are correctly insured and no "average" is applied, so full value of claim less excess.

[rad006]

Ok so from the above 2 is correct is 1 correct as well?

My point is I dont want to be underinsured' date=' as well as not being told that sorry you may have been paying for 30k and 30k is replacement but we paying you less. I know excess comes off but im talking what they will pay out.

[/quote']

......but if you are paying R30k and replacement is R30k, you are correctly insured and no "average" is applied, so full value of claim less excess.

Thanks Ill make sure Im insured for proper amount now

[rad006]

Ok so from the above 2 is correct is 1 correct as well?

My point is I dont want to be underinsured' date=' as well as not being told that sorry you may have been paying for 30k and 30k is replacement but we paying you less. I know excess comes off but im talking what they will pay out.

[/quote']

......but if you are paying R30k and replacement is R30k, you are correctly insured and no "average" is applied, so full value of claim less excess.

Thanks Ill make sure Im insured for proper amount now

[porky]

Ok so from the above 2 is correct is 1 correct as well?

My point is I dont want to be underinsured' date=' as well as not being told that sorry you may have been paying for 30k and 30k is replacement but we paying you less. I know excess comes off but im talking what they will pay out.

[/quote']

......but if you are paying R30k and replacement is R30k, you are correctly insured and no "average" is applied, so full value of claim less excess.

Thanks Ill make sure Im insured for proper amount now

 

Get a few valuations on your particular bike (plus accessories if you want them insured as well) from a few cycle shops every year and check your insured value.

Submit these valuations to your insurer and ask them to insure to the HIGHEST stated value.

 

Insurers will usually apply a "rate of inflation" increase to your policy annually (ie) your bike is insured for 10k, the inflation rate is 10% so they will automatically increase value to 11k annually, and your monthly permium will also increase, unfortunately imported items tend to move up much faster than the std rate of inflation so your bike cost 10k two years ago but the rands devaluation has pushed up the REPLACEMENT value to 18k this year, well above the rate of inflation increase applied by the insurer.

 

 

[Minion]

 

Hold on....

1 If im insured for 30k my replacement is 30k will they pay out 30k?

2 If im insured for 30k my replacement is 60k so they will only pay out  only 15k and not the 30k even though im undervalued?

 

 

You are learning my friend. Count on NUMBER 2

 

I think you're wrong. From Mutual and Federal:

[quote=Underinsurance]

Average is applied for three main reasons:

?         To prevent underinsurance.

?         To obtain a full premium for the risk the insurer is carrying.  

?        To ensure that each party bears a fair share of each loss.

The formula determining average is as follows:

?         (Sum Insured / Value at Risk) x Amount of Loss

 

Example

 

CONTENTS CLAIM: 

A

machine is insured for R10 000. The actual replacement value of the

item is R20 000. If the machine was damaged by fire resulting in

repairs to the value of R5 000 in repairs' date=' the claims settlement would

be calculated as follows:

 

(R10 000 / R20 000) x R5 000 Amount payable : R2 500

 

BUILDING CLAIM: 

A

building is insured for R200 000. The actual reinstatement value of the

building is R300 000. If the building was damaged by a hail storm to

the value of R60 000 in repairs, the claims settlement would be

calculated as follows:

(R200 000 / R300 000) x R60 000 Amount payable : R40 000[/quote']

 

From Santam:

[quote name='Santam]In accordance with the average clause in your

policy' date=' the extent to which you are under insured will be applied to your claim.

Suppose your home or house contents are insured for only 50 percent of the

replacement value and you submit a claim for R20 000. Only 50 percent of the

claim, that is R10 000, will be paid out.

[/quote']

 

[porky]

Edman, your post just re-enforces the point. I fail to understand where you see any discrepancy.  

[Minion]

 

You're saying that, if I insure my R50k bike for R25k and it is stolen and I claim R50k to replace it they will only pay out R25k x (R25k / R50k) = R12.5k.

 

I am claiming that they will pay out R50k x (R25k/R50k) = R25k.

 

Using the MF formula: in your scenario, the amount of loss is only R25k. In mine, the amount of loss is R50k.

 

Edman2009-06-17 13:29:20

[Dirty Twin]

http://www.osti.co.za/

 

All you need to know about insurance. No more speculation.

[KDEE]

Is there a scenario where you may nominate a value for an item?

 

So if I only want to insure my bike for 10K and pay the full premium for 10k. The risk to the insurer is only 10k and they are getting the premium for 10K.

 

I would obviously only claim up to 10K...

 

Irrespective that the value of the bike may be more than 10K.... no loss to the insurer... they are getting the premium they rated the risk on surely?

 

[rad006]

Is there a scenario where you may nominate a value for an item?

So if I only want to insure my bike for 10K and pay the full premium for 10k. The risk to the insurer is only 10k and they are getting the premium for 10K.

I would obviously only claim up to 10K...

Irrespective that the value of the bike may be more than 10K.... no loss to the insurer... they are getting the premium they rated the risk on surely?

Thats why I was getting confused...As if I know my replacement is more but I only want to insure it for X amount why should I get lower than X amount if I was only claiming for X amount and not Y

[AndreZA]

Is there a scenario where you may nominate a value for an item?So if I only want to insure my bike for 10K and pay the full premium for 10k. The risk to the insurer is only 10k and they are getting the premium for 10K.I would obviously only claim up to 10K...Irrespective that the value of the bike may be more than 10K.... no loss to the insurer... they are getting the premium they rated the risk on surely?

 

 

 

 

Okay, lets say you insure your 50k bike for 10k. You only expects to get 10k when it get totaled or stolen, fine. Now you fall and you only break the fork and bars. On a 50k bike that can easily be 8k. Do you expect to get the full 8k?

[Minion]

 

Okay' date=' lets say you insure your 50k bike for 10k. You only expects to get 10k when it get totaled or stolen, fine. Now you fall and you only break the fork and bars. On a 50k bike that can easily be 8k. Do you expect to get the full 8k?[/quote']

I would expect to get 20% of my claim i.e 1.6k since I only insured 20% of the value.

 

In the case of insuring a 50k bike for 10k, the risk to the insurer is still 50k - there are 50k worth of things that could go wrong that they have to cover. They are getting premiums on the assumption that there are only 10k worth of things that can go wrong.

 

What's confusing me is these:

You cannot claim R50 if R25k is your maximum indemnity. If your

replacement quote states R50k and you only insured for R25k' date=' expect to

get paid R12500 less excess.[/quote']

Yes' date=' it is quite correct - Insurers mostly all apply the

pro rata penalty valuation - in otherwords they will only pay a pro

-rata value for the bike - if its value is 20k and you are insured for

10k, they will pay 5k - the pro rata penalty value.[/quote']

In those examples, I am insuring 50% of the bike's actual value, but the company is only paying out 50% of the insured value i.e. 25% of the actual value.

 

 

 

[AndreZA]

 

In those examples' date=' I am insuring 50% of the bike's actual value, but the company is only paying out 50% of the insured value i.e. 25% of the actual value.[/quote']

 

 

 

That is correct. They will pay out the same percentage of what you insured for in relation to what it is worth. (I think )

[KDEE]

Mampara, the parts scenario makes sense...

 

Still think there is a opportunity for an insurer to cover just theft and write of for nominated value... Whether they will or wont is entirely another question