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silky666
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Joined: 28 Aug 2006
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PostPosted: 20:22 - 28 Dec 2016    Post subject: Bike Insurance - Confused Reply with quote

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' Wink 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
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stinkwheel
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PostPosted: 01:39 - 29 Dec 2016    Post subject: Reply with quote

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.
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silky666
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PostPosted: 13:41 - 29 Dec 2016    Post subject: Reply with quote

Household insurance will only insure bikes up to £500.

What does LBS mean ?

Cant do the 'what I want for it' method ... as the 5 insurance companies I rang all said that they would devalue the value by the amount I devalue it .
eg: if an 6k bike, and I just want 3k to cover 2nd hand model - then they will only give me 1.5k !!!!


still need help.
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Gaffa tape is like "the force" - it has a light side, a dark side, and it holds the universe together.
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G
The Voice of Reason



Joined: 02 Feb 2002
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PostPosted: 14:05 - 29 Dec 2016    Post subject: Reply with quote

Local Bike Shop.

Change home insurance?

It's a bit late now, but some one seems to have stolen your garage, with the right insurance that might have been covered.
So keep it in your bedroom instead.

Have you tried BCF's insurance?
(https://www.britishcycling.org.uk/bikeinsurance of course!)
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Ste
Not Work Safe



Joined: 01 Sep 2002
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PostPosted: 14:08 - 29 Dec 2016    Post subject: Reply with quote

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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PostPosted: 16:29 - 29 Dec 2016    Post subject: Reply with quote

Pretty sure my John Lewis specialist only had to specify cycles over £1500. I only had to list the wifes titanium road bike specifically.
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sickpup
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PostPosted: 08:48 - 30 Dec 2016    Post subject: Re: Bike Insurance - Confused Reply with quote

silky666 wrote:
The Silky obtained it second hand for a 'steal' Wink say no more etc. etc.


Words of advice, if it is stolen as you suggest it is then don't even think of getting it insured unless you want a little holiday for theft, handling stolen goods, potentially fraud etc.
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silky666
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PostPosted: 13:33 - 30 Dec 2016    Post subject: Re: Bike Insurance - Confused Reply with quote

sickpup wrote:
silky666 wrote:
The Silky obtained it second hand for a 'steal' Wink say no more etc. etc.


Words of advice, if it is stolen as you suggest it is then don't even think of getting it insured unless you want a little holiday for theft, handling stolen goods, potentially fraud etc.


Don't worry .... Its not stolen.
But it was 'a steal'.
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Gaffa tape is like "the force" - it has a light side, a dark side, and it holds the universe together.
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silky666
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PostPosted: 14:28 - 30 Dec 2016    Post subject: Reply with quote

Ste wrote:
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)


Just rang them, and despite me quoting their own web site front page ("we tailor the quote to suit you") , and telling them that "Ste has googled it and knows a thing or two about the internets" - they informed me that they only do new for old. eg: I have to take out insurance for £7500 , which will be more per year than my motors.
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Gaffa tape is like "the force" - it has a light side, a dark side, and it holds the universe together.
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arry
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PostPosted: 15:16 - 30 Dec 2016    Post subject: Reply with quote

silky666 wrote:

Cant do the 'what I want for it' method ... as the 5 insurance companies I rang all said that they would devalue the value by the amount I devalue it .
eg: if an 6k bike, and I just want 3k to cover 2nd hand model - then they will only give me 1.5k !!!!


still need help.


That's called the underinsurance condition, or average. And they're bang wrong as it happens - in reality the thing you're going to claim for is a total loss, ie theft. In the event of a total loss they'd be liable for the sum insured. You'd be your own insurer for the rateable proportion over and above. That's your percentage of the loss. However, in the event of a partial loss (extremely unlikely) then if average is within the policy then you would end up with a percentage deduction.

Believe it or not the application of average is something I put into all of my competency testing when employing new staff. The most basic of principles and even ACII candidates screw it up royally. Such a shame.

Anyway, since CIDRA reforms a lot of household insurers have dropped the condition of average as it's not easy for a customer to understand and could therefore be seen to be unfair. Which insurer are you talking to and have you any of their policy wordings?
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silky666
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PostPosted: 15:33 - 30 Dec 2016    Post subject: Reply with quote

arry wrote:
silky666 wrote:

Cant do the 'what I want for it' method ... as the 5 insurance companies I rang all said that they would devalue the value by the amount I devalue it .
eg: if an 6k bike, and I just want 3k to cover 2nd hand model - then they will only give me 1.5k !!!!


still need help.


That's called the underinsurance condition, or average. And they're bang wrong as it happens - in reality the thing you're going to claim for is a total loss, ie theft. In the event of a total loss they'd be liable for the sum insured. You'd be your own insurer for the rateable proportion over and above. That's your percentage of the loss. However, in the event of a partial loss (extremely unlikely) then if average is within the policy then you would end up with a percentage deduction.

Believe it or not the application of average is something I put into all of my competency testing when employing new staff. The most basic of principles and even ACII candidates screw it up royally. Such a shame.

Anyway, since CIDRA reforms a lot of household insurers have dropped the condition of average as it's not easy for a customer to understand and could therefore be seen to be unfair. Which insurer are you talking to and have you any of their policy wordings?


huh !?
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Gaffa tape is like "the force" - it has a light side, a dark side, and it holds the universe together.
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arry
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PostPosted: 15:34 - 30 Dec 2016    Post subject: Reply with quote

Exactly Laughing

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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PostPosted: 15:57 - 30 Dec 2016    Post subject: Reply with quote

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
Captain Rulebook



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PostPosted: 16:13 - 30 Dec 2016    Post subject: Reply with quote

arry wrote:
. lots of complicated words that mean something , but not to The Silky, who prefers things a little simplerer. .


so! are you saying that out there somewhere there is an insurance company that will insure my bike for the 2nd hand price ?
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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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Ste
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PostPosted: 16:25 - 30 Dec 2016    Post subject: Reply with quote

Isn't new for old quite a good deal on a bike worth £7,500 when you paid nearly a quarter of that price?
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J4mes
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PostPosted: 16:28 - 30 Dec 2016    Post subject: Reply with quote

Ste wrote:
Isn't new for old quite a good deal on a bike worth £7,500 when you paid nearly a quarter of that price?


Not unless you've got a receipt showing £7500 paid I should imagine?

Arry?

Does it apply to second hand goods?
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arry
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PostPosted: 16:50 - 30 Dec 2016    Post subject: Reply with quote

silky666 wrote:

so! are you saying that out there somewhere there is an insurance company that will insure my bike for the 2nd hand price ?


Not quite; they will still be providing you insurance on a new for old basis, but in reality for all practicable purposes you'll get the amount you insure it for. Unless in some very, highly unlikely circumstance you happen to partially destroy or have parts of the bike stolen. At which point there might be some shortfall, but unlikely as long as you want to replace with second hand parts anyway.
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arry
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PostPosted: 16:52 - 30 Dec 2016    Post subject: Reply with quote

J4mes wrote:
Ste wrote:
Isn't new for old quite a good deal on a bike worth £7,500 when you paid nearly a quarter of that price?


Not unless you've got a receipt showing £7500 paid I should imagine?

Arry?

Does it apply to second hand goods?


Doesn't matter if it's second hand or not; or what you paid for it. Just what it would cost to reinstate for a new item.

Some insurers do stipulate that you must have proof of purchase, ie for my more expensive watches I must have the receipt for them (which is gonna get really interesting if there's a fire in my house....). You'd need to read the conditions carefully.
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arry
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PostPosted: 16:54 - 30 Dec 2016    Post subject: Reply with quote

stinkwheel wrote:

Or just enter the "new for old" value as whatever you want to get for it if it's stolen.


Or simply put Silky; that is very much likely to work out fine.
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Ste
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PostPosted: 16:55 - 30 Dec 2016    Post subject: Reply with quote

J4mes wrote:
Not unless you've got a receipt showing £7500 paid I should imagine?

Arry?

Does it apply to second hand goods?

What you paid for it is besides the point.

The insurance company buys you a new one if it gets stolen and a new one costs £7,500 regardless of if you had paid £5 or £10,000 for your one.
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J4mes
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PostPosted: 17:05 - 30 Dec 2016    Post subject: Reply with quote

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 Laughing
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G
The Voice of Reason



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PostPosted: 17:12 - 30 Dec 2016    Post subject: Reply with quote

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 Smile.
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silky666
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PostPosted: 18:57 - 30 Dec 2016    Post subject: Reply with quote

Ste wrote:
Isn't new for old quite a good deal on a bike worth £7,500 when you paid nearly a quarter of that price?


Fuck it. I am just buying a big dog.
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Gaffa tape is like "the force" - it has a light side, a dark side, and it holds the universe together.
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Ste
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PostPosted: 14:21 - 05 Jan 2017    Post subject: Reply with quote

20% off insurance with Wiggle using the code JANSALE. Thumbs Up
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Wafer_Thin_Ham
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PostPosted: 21:50 - 05 Jan 2017    Post subject: Reply with quote

Just keep it in the house. My road bike lives in the spare room. Thumbs Up
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