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silky666 |
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silky666 Captain Rulebook
Joined: 28 Aug 2006 Karma :
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Posted: 20:22 - 28 Dec 2016 Post subject: Bike Insurance - Confused |
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I have recently bought a rather expensive mountain bike.
Always owned good bikes ... but this one is a little bit special.
New it is approx. £7500 ... but of course The Silky obtained it second hand for a 'steal' say no more etc. etc.
The issue I have is that when insuring the scamming bastard insurance companies all want to insure 'new for old'.
eg: I have to enter the new cost , which immediately generates a quote that is higher than my motorcycle or car.
But if it gets stolen I DONT want a new bike.. I simply want to buy a second hand one of the same spec for around £2000
So what I need is a 'market value' insurance policy.
Does anyone have any experience with insurance or similar issues ?
Thanks in advance,
Uncle Silky ____________________ There's nothing that shouts "Poor Workmanship" more than wrinkles in the Gaffa tape.
Gaffa tape is like "the force" - it has a light side, a dark side, and it holds the universe together. |
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stinkwheel |
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stinkwheel Bovine Proctologist
Joined: 12 Jul 2004 Karma :
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Posted: 01:39 - 29 Dec 2016 Post subject: |
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Agreed value under your household insurance.
If required, pass your LBS a tenner to do you a valuation.
John Lewis home insurance take my word for it providing I keep photos on file.
Or just enter the "new for old" value as whatever you want to get for it if it's stolen. ____________________ “Rule one: Always stick around for one more drink. That's when things happen. That's when you find out everything you want to know.”
I did the 2010 Round Britain Rally on my 350 Bullet. 89 landmarks, 3 months, 9,500 miles. |
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silky666 |
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silky666 Captain Rulebook
Joined: 28 Aug 2006 Karma :
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G |
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G The Voice of Reason
Joined: 02 Feb 2002 Karma :
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Ste |
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Ste Not Work Safe
Joined: 01 Sep 2002 Karma :
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Posted: 14:08 - 29 Dec 2016 Post subject: |
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LBS... Local bike shop.
You're wanting an insurance policy with an agreed value for your bike. A quick look on Google tells me that these people do that: www.cycleguard.co.uk (not a recommendation) |
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stinkwheel |
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stinkwheel Bovine Proctologist
Joined: 12 Jul 2004 Karma :
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sickpup |
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sickpup Old Timer
Joined: 21 Apr 2004 Karma :
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silky666 |
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silky666 Captain Rulebook
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silky666 |
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silky666 Captain Rulebook
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arry |
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arry Super Spammer
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silky666 |
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silky666 Captain Rulebook
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arry |
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arry Super Spammer
Joined: 03 Jan 2009 Karma :
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Posted: 15:34 - 30 Dec 2016 Post subject: |
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Exactly
Hang on, I'll grab the tablet as it's easier to type and I'll give you some examples. |
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arry |
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arry Super Spammer
Joined: 03 Jan 2009 Karma :
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Posted: 15:57 - 30 Dec 2016 Post subject: |
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Right, here goes.
The condition of average, or the underinsurance condition, is a policy wording condition which makes you responsible for accurately setting your sum insured (what the item insured is worth if you were to replace it new for old); should you not do so correctly, then the insurer would deduct a proportionate percentage from the claim payout they give you - their view being, you've not paid a full premium, so you won't get a full claim payout.
In example - for a partial loss:
I build a house - it cost £2m to build.
I insure the house for a maximum sum insured of £1m.
A flood occurs, and there's £100,000 worth of damage.
The insurer then applies the average condition to the loss, which works on the formula ((sum insured / true value) x loss) so in this instance
£1m divided by £2m = 0.5 (ie 50% as expressed as a percentage)
The loss being £100,000 multiplied by the rateable proportion of 50% = £50,000.
The formula is a simple one and remembering it is where the usual insurance advisers go wrong. What they tend to do is substitute the meaning of The Loss to be the total sum insured when there's a total loss of the item insured. In the next example you'll see what that does in practice.
In example - total loss:
I build a house - it cost £2m to build.
I insure the house for a maximum sum insured of £1m.
A fire occurs, and a total loss of the property occurs. The loss is therefore £2m.
The insurer then applies the average condition to the loss, which works on the formula ((sum insured / true value) x loss) so in this instance
£1m divided by £2m = 0.5 (ie 50% as expressed as a percentage)
The loss being £2m multiplied by the rateable proportion of 50% = £1m.
This is the way it should work - the insured has become their own insurer for the rateable proportion over and above the sum insured. That is to say:
Insured has set value to be insured at 50% of the true reinstatement cost.
Insurer is therefore liable for 50% of the total loss, which is £1m.
The insured is therefore liable for 50% of the total loss, which is £1m
£1m + £1m = £2m, ie the total of the total loss.
But what the insurer thinks the loss is, is the sum insured, so they say (£1m / £2m) x loss = £500,000. This is entirely incorrect.
In other words, if you lost the bike entirely, they'd be liable for the sum insured, regardless of what % of the bike's true value you decided to set at the sum insured.
Example:
Bike worth £10k.
You insure it for £5k.
Bike goes missing. Total loss is £10k.
Insurer is liable for 50% rateable proportion - £5k (oh look, the sum insured)
You are liable for 50% rateable proportion - £5k (but that doesn't matter as you don't want to buy new to reinstate, you'll get what yu need from the £5k they'll give you).
But, in the event of partial loss:
Bike worth £10k.
You insure it for £5k.
Bike has wheels stolen. Total loss is £1k.
Insurer is liable for 50% rateable proportion - £500
You are liable for 50% rateable proportion - £500
So in this example you would be out of pocket - but again, you'd just find second hand wheels at the money you have available.
However, as stated already - at least the big 3, Axa, Allianz, Aviva have deleted the Condition of Average from their wordings entirely. So this may be a completely moot point. |
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silky666 |
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silky666 Captain Rulebook
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Ste |
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Ste Not Work Safe
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J4mes |
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J4mes World Chat Champion
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arry |
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arry Super Spammer
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arry |
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arry Super Spammer
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arry |
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arry Super Spammer
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Ste |
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Ste Not Work Safe
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J4mes |
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J4mes World Chat Champion
Joined: 18 Mar 2011 Karma :
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Posted: 17:05 - 30 Dec 2016 Post subject: |
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I only ask because when I was looking for caravan insurance last year the option of old for new came up. It was 3x the price of normal insurance, but even so it looked like a great deal...until you read the T&C's - You must be the original owner of the van and have owned it constantly from new, van must be less than 3 years old, must be able to provide original sales invoice.
And there was me thinking I was going to torch my 9 year old 10K van and get a £30K one in return |
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G |
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G The Voice of Reason
Joined: 02 Feb 2002 Karma :
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Posted: 17:12 - 30 Dec 2016 Post subject: |
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On the new for old thing; I had a Boardman FS Comp which was stolen.
I'd paid just over £500 barely used. (Quite common with Halfords bikes oddly enough.)
I think I had the receipt for this at this price, or at least e-bay communications etc.
Insured under M&S household insurance.
New price was £850.
I'd have been fine with enough to replace it with another low-use secondhand. But they insisted on using their assigned company.
They offered me a few options, but eventually agreed on a cash settlment of £1130 or something!... as that was what they valued a bike with those components.
I didn't complain too much . |
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silky666 |
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silky666 Captain Rulebook
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Ste |
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Ste Not Work Safe
Joined: 01 Sep 2002 Karma :
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Posted: 14:21 - 05 Jan 2017 Post subject: |
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20% off insurance with Wiggle using the code JANSALE. |
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Wafer_Thin_Ham |
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Wafer_Thin_Ham Super Spammer
Joined: 18 Nov 2005 Karma :
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Posted: 21:50 - 05 Jan 2017 Post subject: |
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Just keep it in the house. My road bike lives in the spare room. ____________________ My Flickr |
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Old Thread Alert!
The last post was made 7 years, 113 days ago. Instead of replying here, would creating a new thread be more useful? |
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