srw
It's a bit more complicated than that...
*snigger*
Cycling insurance
- Thread starter Thegreatthor
- Start date
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*snigger*
srw
It's a bit more complicated than that...
And since some people seem to be looking at posts through "new posts" rather than forum by forum, they might have missed https://www.cyclechat.net/threads/insurance-and-cycling.118438/, which is still reasonably up-to-date.
srw
It's a bit more complicated than that...
Likewise. And that's with a high-spec high-net-worth home insurance policy with quite a generous wording, and full accidental damage cover.
vickster
Legendary Member
@Thegreatthor how did you get on with your insurance company?
confusedcyclist
Veteran
The reaction people give when you challenge their dogma's, always give me a chuckle! Insurance is perfectly ok for catastrophic loss, but to cover the cost of bicycle loss theft or damage? Seriously?
"We have been paying for bicycle insurance for so long we cannot remember why we do it, but we do it anyway, all alternatives are codswallop".
I merely suggest an alternative train of thought. If you don't think through the alternatives before making up your own mind up are sadly falling in to a trap that many others before you have. I don't claim to make sweeping statements that my approach works for everyone, or everyone should carry investments. Even if you keep your self-insurance assets in an current account, as many do, you are still the price of the insurance premium better off every year nothing happens to your bike. Which by the way, in extremely unlikely if you take proper precautions and avoid unnecessary risks.
Sorry I didn’t realise CC had a branch of the Investing Gestapo. I’ll get my coat then… or maybe not. Have you got something against investing, or do you just dislike others’ opinions?
Every time you spend money it comes with an opportunity cost, for some, an insurance premium is an acceptable loss, but for those who seek financial advice, it’s a warning that IMO it is wasteful. The OP came here asking how to save a few quid, I gave him an alternative strategy where he would be in financial surplus, not a deficit for a service that is arguably a waste of money.
mythste
Veteran
- Location
- Manchester
You're talking about opportunity cost but completely ignoring people's utility investment in their cycles? My Propensity to purchase insurance is directly proportional to my utility derived from using my bicycle and my utility lost from losing it.
I think the issue being taken here is that whilst I've no doubt your logic is nothing short of reasonable you're catastrophically underestimating a certain human factor with your posts thus far and for some people that's, understandably, insulting.
Usual caveats about IMO YMMV etc apply.
confusedcyclist
Veteran
A second bike would help here, or you could always just buy another bike. No doubt that would be much quicker than settling an insurance claim. Yet another downside of insurance. 
Yes my strategy requires financial discpline. But it is perfectly attainable.
Yes my strategy requires financial discpline. But it is perfectly attainable.
vickster
Legendary Member
I have 4 bikes, and although they are safely locked away, they could still be stolen. I can afford the £50 a year to insure them (plus any excess), but I wouldn't want to have to find £4-5k to replace them
I have had a bike stolen, I replaced it, and quickly received a cheque covering the cost
What do you do for a living by the way?
I have had a bike stolen, I replaced it, and quickly received a cheque covering the cost
What do you do for a living by the way?
confusedcyclist
Veteran
I am not denying that insurance is not a valid stratergy to replace a stolen bike. But by holding savings you will usually benefit from the returns in the long run, despite the cost of replacing the odd bike here or there.
I dont know the circumstances of your theft, but the risk can be managed down considerably Using two different locks of high quality and by parking in safer locations.
In order to work out if it is wotthwhile in your case I would be interested to hear what type of lock(s) were used, how it was locked & what to, where the bike was when it was stolen, what the payout was, the bikes value, what the bike cost to replace (assuming like for like was purchased)?
I work in health care, but have an interest in personal finance as I intend to retire in my 30s. I've done my research on investments. Retiring in your 30 requires very deliberately thinking about your expenses and insurance starts to make less sense when you accumulate significant assetts.
Without harping on, one should seriously consider only buying what they can afford to lose. Maybe living pay cheque to pay cheque suits many people, and in these circumstances I understand the appeal of insurance, as the individual is highly unlikely to have significant liquid savings.
I dont know the circumstances of your theft, but the risk can be managed down considerably Using two different locks of high quality and by parking in safer locations.
In order to work out if it is wotthwhile in your case I would be interested to hear what type of lock(s) were used, how it was locked & what to, where the bike was when it was stolen, what the payout was, the bikes value, what the bike cost to replace (assuming like for like was purchased)?
I work in health care, but have an interest in personal finance as I intend to retire in my 30s. I've done my research on investments. Retiring in your 30 requires very deliberately thinking about your expenses and insurance starts to make less sense when you accumulate significant assetts.
Without harping on, one should seriously consider only buying what they can afford to lose. Maybe living pay cheque to pay cheque suits many people, and in these circumstances I understand the appeal of insurance, as the individual is highly unlikely to have significant liquid savings.
vickster
Legendary Member
Why do you want to retire in your 30s? What do you plan to do for the next 50 years? That's a lot of rounds of golf!
I'm thinking you don't have a wife and kids to support! And don't plan to
I had the bike stolen because I was foolish enough to leave it locked with a cable on a busy London street on a Sunday afternoon. I now use a D Lock (+ cable if necessary)
The payout covered the cost of the bike plus accessories attached less the excess. I think I got about £500 which bought a new equivalent bike (indeed a newer version, next model up)
I have significant liquid savings, but I am still happy to pay a £50 annual premium to have all my bikes properly insured so I don't have to use those significant savings to replace a £1500 bike
I'm thinking you don't have a wife and kids to support! And don't plan to
I had the bike stolen because I was foolish enough to leave it locked with a cable on a busy London street on a Sunday afternoon. I now use a D Lock (+ cable if necessary)
The payout covered the cost of the bike plus accessories attached less the excess. I think I got about £500 which bought a new equivalent bike (indeed a newer version, next model up)
I have significant liquid savings, but I am still happy to pay a £50 annual premium to have all my bikes properly insured so I don't have to use those significant savings to replace a £1500 bike
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confusedcyclist
Veteran
I haven't nailed down what I will do every day, but I have a pretty long bucket list of things I'd rather do than get up in the dark and go to work
. I figure I will do a lot more of 
Sounds like it was a lesson learnt and you are now much less likely to have your bike stolen! The insurer needs only to take premiums from 10 other customers to be able to cover the cost, but in reality there will be many more people that year who paid and did not have a theft. This is their turnover, and after costs this is the profit made. It serves to highlight that if the risk is managed correctly, the likelihood of have your bike stolen can be quite low, if it wasn't your insurer would go bust or have to inflate premiums. If you practice self insurance, you would benefit from carefully managing your risks. I already do this anyway as the inconvenience of returning to find my bike stolen is motivation enough!
I am suprised they payed out if the lock was one of those cheapo cable locks! It seems you beat the system that year, but don't assume your quids in just yet...
£50 payment, annually over a typical lifetime (83 years, assuming you deduct your non-working years when you cannot afford to insure your bike) = £50 * 65(years) = £3250. Now instead of spending it on a premium, invest your £50 annually, at a conservative (it could be higher) 6% return rate with compounding interest and you would have £32,135.35 after 63 years. This is your opportunity cost of not investing, but spending. £32,135.35 buys a lot of bikes. Now, we need to cover the value of the bike if it is lost so we can pay out immediately, if you don't have £1500 right now to replace it, insurance makes sense, but if you do. Invest and hold.
Over 63 years, £1500 invested grows to £62,961.71.
People need to realise that having the mindset that each little expense costs them nothing in the long run , or its worth it to me because... is short sighted. I know I'd rather be £62,961.71 better off. If the oppertunity cost is worth it to you, you're either frivolous, don't care about money (but you must if you wish to buy expensive bikes?) or are a multi-millionaire and the hassle of buying insurance is beyond you.
This is in no way a criticism of those that chose to manage their finances differently, but a reminder that there is another way that doesn't involve paying someone else to manage your risk.
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Sara_H
Guru
I've literally just come off the phone from my insurance company after asking them to cover my Brompton on my home contents policy. They've only charged an additional 3.83, which I found a bit difficult to believe, but the chap I spoke to seemed quite confident.
When it came to time to pay, they waived the payment anyway as it was such a small amount.
Waiting for the updated documentation to come through with baited breath as it seems a bit too good to be true.
When it came to time to pay, they waived the payment anyway as it was such a small amount.
Waiting for the updated documentation to come through with baited breath as it seems a bit too good to be true.
cisamcgu
Legendary Member
- Location
- Merseyside-ish
mythste
Veteran
- Location
- Manchester
But that figure is making so many assumptions of which you just cant accommodate for. Its a mathematically sound statement, for sure, but I'm sure there are economists that would vehemently disagree (and rightfully so, IMO!)
I suspect @confusedcyclist derives an awful lot of utility from being liquid and having reserves, I suspect many others derive more utility from the things they buy instead.
One way is fine, the other way is fine also. After all, can't take it with us!
