Cycling insurance

[confusedcyclist]

@mythste even if the figures are not right and the market returns a dismal 1% return from now until the day we die, you are still better off holding the cash.
Rather in my pocket than in the insurance fat cats, and your're right, we can't take it with us, but my progeny will certainly benefit!

 

[Sara_H]

@Sara_H - who is your insurance with, if I may ask ?

Andrew

Legal and General. Deal seems to be tooo good to be true, so am waiting with baited breath to see what ot says in the paperwork. I asked the call handler if they would accept a photo of my locks as prrof that I had them as I didn't have the receipts anymore and he said they would accept my word!!!

 

[confusedcyclist]

@Sara_H One thing to consider, if you make a claim on your home insurance policy, you will pay for the claim in the long run due to hiked premiums, house insurance cover is not something to skimp on.

Is it worth it?

 

[Sara_H]

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

Which company was that Vickster?

 

[Sara_H]

@Sara_H One thing to consider, if you make a claim on your home insurance policy, you will pay for the claim in the long run due to hiked premiums, house insurance cover is not something to skimp on.

Is it worth it?

Probably not. When I looked for wuotes for my Brompton they were quite pricey. If I could find one for a similar price to the one Vickster had, I'd be happy.

 

[confusedcyclist]

If you take a Brompton indoors I imagine the risk of theft is minimal! It is a high value bike though which explains the premiums. You would do well to consider self insurance

 

[Sara_H]

If you take a Brompton indoors I imagine the risk of theft is minimal! It is a high value bike though which explains the premiums. You would do well to consider self insurance

I have't ever left it outdoors yet, but I'm preparing myself for an occasion where I may need to leave it locked somewhere (eek). Also, not that I'm super paranoid or anything (!) but I've read of a couple of cases recently where folks have been mugged for their bikes - which would make me cry!

 

[mythste]

@mythste even if the figures are not right and the market returns a dismal 1% return from now until the day we die, you are still better off holding the cash.
Rather in my pocket than in the insurance fat cats, and your're right, we can't take it with us, but my progeny will certainly benefit!

There we go again, define better off!

(Economics grad/pedantic **** - also enjoying this)

 

[confusedcyclist]

All other expenses aside, In simplest terms an annual 1% return on 1500 will shift your net worth up while an annual expense of 50 will move it the other direction.

 

[vickster]

Which company was that Vickster?

Sheila's Wheels (esure). I'm now with Zurich I think through the AA

 

[vickster]

£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 opportunity 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.

WTF I am not going to be insuring bicycles until I am 83 (I don't even plan to live that long)

 

[400bhp]

WTF I am not going to be insuring bicycles until I am 83 (I don't even plan to live that long)

And you start saving that £50 from birth

And then WTF do you do with the cash @83

 

[vickster]

My point is that the peace of mind I derive from £50 to insure my bikes (and that's a guess as to what the bikes add to my premium, it might be nowhere near that) is well worth it. £50 really isn't much over the course of a year. I've easily spent double that eating out in the last week. You may think that's frivolous but I've caught up with 10 really good friends while doing so (and probably gained a couple of pounds while spending those pounds )

 

[400bhp]

My point is that the peace of mind I derive from £50 to insure my bikes (and that's a guess as to what the bikes add to my premium, it might be nowhere near that) is well worth it. £50 really isn't much over the course of a year. I've easily spent double that eating out in the last week. You may think that's frivolous but I've caught up with 10 really good friends while doing so (and probably gained a couple of pounds while spending those pounds )

It's not frivolous at all.

You are paying the insurance company to pool the risk of your bikes being stolen with other people doing the same thing..

You may never have a bike stolen, or you may have umpteen stolen in one year, then none the next year and so on.

What you are doing is passing on the risk (and hence the volatility of you having to fork out on a new bike with cash) to the insurer. You are paying a known £50 for this transfer of risk. The term "risk" and what it means to you is very specific. As someone alluded to above, it's dependant upon how much value (or utility) that risk entails for you.

 

[mythste]

My point is that the peace of mind I derive from £50 to insure my bikes (and that's a guess as to what the bikes add to my premium, it might be nowhere near that) is well worth it. £50 really isn't much over the course of a year. I've easily spent double that eating out in the last week. You may think that's frivolous but I've caught up with 10 really good friends while doing so (and probably gained a couple of pounds while spending those pounds )

This is that utility thing that I banged on about. Spend what makes you happy - until diminishing returns kick in and you start to loath the pounds youve spent putting on those pounds!