Posted : 01/14/2011
If you love to bicycle for pleasure or rely on two wheels for your livelihood, you may invest a lot of money in high-end bicycles and accessories. But are these pedal-powered splurges covered by insurance?
What happens if your bike is damaged or stolen? Or if you have an accident with a car? Do you need specific, additional coverage if you use a bicycle to deliver goods or services?
In most cases, your home insurance covers damage to your bicycle.
"For the average recreational rider with a couple bikes in the garage, bicycles are covered under a standard homeowners or renters policy," says Jeff McCollum, a spokesperson for State Farm Insurance.
The same applies for serious bikers who like to compete in triathlons or competitions.
McCollum says bicycles are covered for all the perils listed in your home insurance policy, including everything from fire and theft to tornado. Even if you back over your bicycle with a car, it's likely to be covered.
"(Those are) all situations where the bike would be covered but would be subject to the homeowner's deductible to repair or replace the bicycle," McCollum says.
Chicago-based Farmers Insurance agent John Crabbe says coverage may change a bit when you get away from your primary residence.
"There may be limitations and exclusions on this coverage if the bike is stolen or damaged from a secondary residence such as a vacation home," he says.
However, Tempe, Ariz.-based Farmers Insurance agent JR Couch says that if you're just visiting a friend for the day and your bike is stolen from the friend's house, "it would still be covered."
"If you're staying at a friend or relative's house for an extended period of time, depending on your state and policy, the bike might not be covered," Couch says. "It could be construed that your primary residence has changed and the coverage would need to be changed to the temporary housing."
How much will you be paid if your bike is stolen or damaged and needs to be replaced? The answer depends on whether you have a replacement cost or actual cash value policy.
If you have a home insurance policy that pays out at a replacement cost, expect to have the loss compensated at the same rate it would cost to replace a new, similar bike, minus your home insurance policy's deductible.
However, if you have an actual cash value policy, you'll only be reimbursed for the bike's depreciated value. In such cases, it might not be worth filing a claim, depending on the bicycle's age.
"A 5-year-old bicycle would be valued at the cost of a new bicycle minus five years' depreciation," Crabbe says. "That claim might not be worth filing because of the resulting potential increase in your renewal rates."
McCollum says some policyholders with actual cash value homeowners or renters policies cover expensive bikes by purchasing a personal articles policy (or PAP). A PAP covers only total loss (such as a theft or the bicycle being totaled), not minor damage.
"State Farm doesn't define or suggest what is expensive – that's in the mind of the consumer," he says. "However, we rarely encounter requests for this type of policy."
Crabbe says insurance companies don't typically sell bicycle insurance policies that offer specific coverage related to accidents, as auto insurance policies do.
"But there are various forms of insurance that may cover you while bicycling," he says.
For instance, if you're hit by a car and its driver is at fault, the driver's auto insurance should cover the loss or damage of your bicycle as well as any injuries you sustain, Crabbe says.
If you have auto insurance, Crabbe says that policy may cover your injuries or loss if you're hit by a car while bicycling. But the rules differ from state to state, so check your state's insurance laws.
If you're at fault due to hitting a car, person, mailbox or something else with your bike, your renters or homeowners insurance typically would cover the claims for damage to both party's property and injuries, says Crabbe.
If you're a business owner or independent contractor who uses a bicycle for work, McCollum says you probably need a business liability policy.
"State Farm doesn't offer coverage if you use your bicycle for work," McCollum adds.
A bike messenger will likely want general liability insurance to cover himself and any employees who get in an accident, cause damage or injury to themselves or someone else.
Other coverages also may apply to people who use bicycles for work. For example, a messenger who rides more than 100 feet from the business also needs "inland marine coverage" for the items he or she is transporting, McCollum says.
"This is similar coverage to what a delivery truck owner would have whether they are delivering furniture or groceries," says McCollum.
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