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Electric Bike Insurance - How Much Bicycle Insurance Costs, How it Works and What it Covers - YouTube
Channel: All Bike Update
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>> Court: Ah, David Williams, you're the CEO
and co-founder of Velosurance.
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You're one of the original players and it
sounds like you're nation wide.
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Can you just, you know, expand on that a little
bit and give me a quick, like, history of
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the company?
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>> Dave: Bicycle insurance is not a new concept.
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It's new in the US, it's very big in the UK
and it's very big in Australia.
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We had dealt with Markel in general insurance
for over 15 years and when I conceived the
[36]
idea of Velosurance I took the idea to Markel
and Markel liked the concept, they ran with
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it and it took them over three years to get
the policy accepted by all of the insurance
[54]
departments in every state.
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>> Court: So, you know I... there are all
these questions floating through my mind.
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I've had cars, a regular car, and you like
have to get insurance in a lot of states because
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it's such a big thing and not only is it expensive
and it could get damaged, you could damage
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other peoples' property.
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Now when we're talking about electric bikes
now specifically, you know as I run ElectricBikeReview.com
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right so that's kind of where I'm interested,
and they're more expensive so you're spending
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like $3,000 for a bike.
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I mean that's like a used car right there,
so you know, what does the product offer and
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how does this work.
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>> Dave: Congress considers a pedal assist
or an electric assist bike up to 750 watts,
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still remains a bicycle.
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>> Court: Yeah.
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>> Dave: The homeowner companies and renter
companies, if its got a motor, they don't
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want to know about it.
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>> Court: There's this new movement towards
like, speed pedelec bikes that can hit like
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28 miles per hour when you're pedaling.
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Right, the idea being like, well you can pedal
that fast so why can't the bike help you.
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And you've got like the Specialized Turbo,
Stromer ebikes and some of the IZIP bikes
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like the E3 Dash.
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Are those covered under your policies too?
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>> Dave: Yes, it's up to 750 watts.
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After 750 watts we're out of the game.
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>> Court: In addition to the bike, like can
you also, does it also cover accessories and
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stuff?
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I mean, I've poked around the website and
you can spend a lot on lights and GPS units
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and you know, different things like that on
your bike.
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>> Court: Yeah, well that's one of the biggest
questions we get asked is "How much should
[155]
I insure my bike for?"
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I paid $3K for it but now I've added a whole
bunch of stuff to it.
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And our answer is, when you get ready to step
on that bike, how much is it worth at that
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time.
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And that's how much you should insure it for.
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>> Court: Okay, can we do like a buildout
scenario?
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>> Dave: Depending on where you are, the country's
divided into three tiers.
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Southern, where you can ride 12 months of
the year.
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Central, where you can probably ride twelve
months of the year but there may be some days
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you don't want to step out the front door.
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And Northern, where you spend six months riding
and six months ice fishing.
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>> Court: Yeah!
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Got it.
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>> Dave: So, it really depends on where you
are but if you were in North Carolina, $100
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would buy you a policy on about a $1,200 to
$1,500 bike.
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So, you know if, to use a ballpark figure
for everywhere in the country I would say
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7% or seven and a half percent of the value
of the bike.
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So, if you've got a $3,000 bike, somewhere
around $200 a year to insure the bike against
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physical damage and theft.
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Okay, what about the whole, you know that
liability piece because for me, let's say
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I have a $1,500 entry level bike.
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If, I don't, you know that's replaceable but
if I like scrape someone's car or something
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or I hit someone on the bike path like, that
could be a big deal.
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>> Dave: The technical aspect of liability
is for, we will pay on your behalf those sums
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that you have become legally liable for.
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Now, when someone says legally liable for.
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Okay, now that brings a court room into it
or at least a lawsuit into it.
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So, in order for you to, in order for liability
to kick in there is attorneys involved at
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that point.
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>> Court: Okay >> Dave: So, yeah you're riding
down the road.
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You crash into the guy's $300,000 Ferrari
and his insurance company pays for him but
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says "Hey, who is this guy that crashed into
you and whats he got?"
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They came after you for $12,000 repair, and
here's where it gets weird.
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If you were on your regular Trek pedal bicycle
and you did that, your homeowners insurance
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company would step in and pay it for you.
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>> Court: Hmm, that's cool.
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>> Dave: But, because your bike now has a
motor, we'll find that a lot of homeowners
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companies will either exclude it or deny your
coverage because you didn't tell them that
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it had a motor.
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You know, insurance companies, with the exception
of Markel of course, insurance companies are
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not kind and benevolent companies.
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They have a bottom line that they have to
meet.
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They have shareholders that they have to make
money for.
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So, they're very persistent about what they
will and won't pay.
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And if their contract doesn't specifically
say that they're going to pay for your electric
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bike damage, they're not going to.
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>> Court: So, but you guys would in that case,
like with the $12K. >> Dave: Yeah, it's about
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$42 per year to buy ~$25,000 in cycling liability.
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It only covers you when you're riding the
bike itself.
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But the most important thing about buying
liability is that you're buying a defense.
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>> Court: Yeah.
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>> Dave: I don't know about you but I can't
afford a $400 an hour attorney.
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Car insurance companies don't want to cover
it because it doesn't have a VIN number.
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>> Court: Oh, I see.
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>> Dave: And homeowners insurance companies
won't cover it because they consider it like
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a motorcycle or a scooter that should be insured
by your car insurance company.
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So, you're caught between these two companies
that have these rules that won't allow them
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to insure something as sensible as a bicycle
with an electric assist motor in it.
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>> Court: It is sort of a gray area and yeah,
people want to be safe and cover themselves.
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And being responsible here, it's just it's
interesting, I'd heard a story about someone
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who there was a flood near their house and
the flood wrecked the house but like a tree
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fell over on their house and the insurance
company was like "Oh, we don't cover trees
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falling on your house."
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You know, it was like "Ahh!
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What do you mean, the tree fell because of
the flood."
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Or, you know so, anyway, that's just a side
note but it's nice to feel like there's a
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company out there that's focused on this.
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And then the other thing was travel, because
a lot of people with the folding electric
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bikes, they put them on their boats, their
RV's, they take them on planes and then, now
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they're not "home" right.
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Is that covered?
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>> Dave: Yeah, we can do word, we do worldwide
coverage.
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Um, it runs about 10% of the premium.
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So, you know, if you have a $250 premium,
to insure your bike that you're going to take
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to England and tour around the countryside
on would cost you another $25.
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>> Court: Okay, and that's worldwide.
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What if you're just in the US.
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Like, I live in Colorado, if I go to Arizona
on a trip, do I need the worldwide coverage
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or?
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>> Dave: No, you don't need to tell us.
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You're automatically covered in the USA and
Canada.
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>> Court: I noticed on the website, you know
I was reading through your frequently asked
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questions, it's a pretty cool page.
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And it said, you know, you're covered for
racing.
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I don't know too many people who do electric
bike racing at this stage but you're also
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just like regular bicycle insurance and there
are a lot of athletes who do triathlons so
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that was nice to see.
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The other thing I noticed in that section
was that like, if you're a bicycle messenger,
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say in New York City where you've got a lot
of of people who actually do use electric
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bikes, and there's legal controversy, if you're
using it for professional means like then
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it's not covered.
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Is that right?
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>> Dave: That's right, we are strictly personal
use coverage.
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The risk of commercial use is dramatically
different than someone who's a weekend fitness
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rider.
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We just can't cover that risk.
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>> Court: There's another type of bike out
there, it's not a full electric bike, it's
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an electric trailer.
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It's called the Ridekick, and I think there
are others too but would that be covered somehow?
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>> Dave: We're still working on that.
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If it could be considered an accessory that
is connected to the bike then it will be insured.
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But, it's still something that, we've only
just become aware of the Ridekick and we're
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working with the underwriters to see how and
if it will be covered.
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>> Court: So what's your process like if a
bike is stolen or wrecked or something?
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>> Dave: So, when you have a damage, the first
thing you do is you call Velosurance.
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We handle all the claims through our office.
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You call us, we know what the claims department
at Markel needs.
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So, we put the claim package together.
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So, when we send it to them it's complete.
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They don't need to ask for anything else.
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We have everything in your file, we send it
to them with a statement and a loss notice.
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So, you damage your bike, take it to a trusted
partner shop, they give you a repair estimate,
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give the repair estimate to us with photographs
of the damage, that becomes part of your claim
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file that gets sent to the insurance company.
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The bike is covered for any type of direct
physical loss.
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If you lay your bike down, you hit a rock,
you hit a tree, you hit something else, you
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damage the bike - that was accidental, it's
covered.
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If your tires wear out, that's not accidental,
we knew they were going to wear out the day
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we bought them.
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So, that sort of stuff is not covered.
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>> Court: Is the original value of your bike
insured and do you get that money, can you
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explain how that works?
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>> Dave: Yeah, if it's $4,000 today and it
goes away in five years time, it's still $4K.
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We do not depreciate the value of the bike
over time.
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>> Court: What is the deductible on these
plans too, is that?
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>> Dave: It's, you have a choice of $100,
$200, $300 or $500.
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The $300 deductible is the best deal, it's
where you see the best savings.
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Of course, the $500 deductible is the lowest
premium but, if it's only $20 difference between
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$500 and $300 and ever had a claim and you've
got a $200 difference.
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That's 10 years, you have to dig out of that
$200 hole at $20 a year.
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>> Court: What about friends riding the bikes?
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>> Dave: The policy is permissive use policy.
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Which means, you can loan your bike to anyone
you want to.
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If you have liability, if you have medical
then they are insured as if they were the
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owner of the bike.
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>> Court: That's awesome, and I call that
out with regards to electric bikes specifically
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because, since they're still kind of a new
technology in America and people are like
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"What is that!"
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you know, I just know that there are more
of these situations where you're like "Give
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it a try!" and they're like "Ahhh!" and they,
you know...
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So, it's great to hear that.
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I think that that alone is a really great
benefit of the product.
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>> Dave: One of the most important coverages
for anyone who rides a bike to have, if they
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have an auto policy, is to have uninsured
motorist coverage on the auto policy.
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Not many people know that the uninsured motorist
coverage on an auto policy covers you, no
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matter what you're doing.
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In order for your uninsured motorist to kick
in, there has to be contact between you and
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the other car and the other car has to have
no insurance, little insurance or be a hit
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and run.
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And, that other car, if they hang around,
has to receive a ticket in order for you to
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show that it was their fault.
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For those people who don't own cars, and who
don't have uninsured motorist, our policy
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has an optional coverage called vehicle contact
protection which is medical payments up to
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$25,000 if you are, once again, injured by
contact with the car.
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Everyone at Volosurance is a cyclist.
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We all know what you're talking about, we
look at every quote request that comes in,
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we look at it and analyze it.
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And we make sure that no one is ever quoted
on a policy that could duplicate coverages
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that they already own somewhere else.
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In other words, if we look at your application
and you've requested vehicle contact protection
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but you live in California where you more
than likely own a car, we would take that
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out of the quote and then send you an email
and tell you what we've done and ask you to
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tell us if we did the right thing.
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>> Court: I appreciate the time!
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>> Dave: Okay Court, good to see you!
[837]
Good to talk with you and thanks for hanging
out with Velosurance.
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