FAQ: Bicycle value

While accredited carbon frame repair facilities restore the frame to its original safety specification and warranty said repairs, they cannot guarantee that the frame will retain the manufacturer’s warranty. A professionally performed composite repair will have a perfectly matched carbon layup, combined with the highest grade of resins, to retain the structural rigidity and the dampening qualities of the original frame. Such repairs are undetectable by the naked eye, thermographic imaging, and ultrasound

Many bike manufacturers perform similar repairs in-house, some recognize repairs performed by accredited repair facilities and even outsource their repairs to them, others do not. The truth is, unlike the automotive industry, where the manufacturer must accept repairs performed by ASE-certified mechanics, the cycling industry is unregulated.

Many major manufacturers have stated that they would not honor a warranty claim for the repaired area, however, they would honor a warranty claim for the remainder of the frame.

It is prudent that you, as a consumer, educate yourself on the nuances of the warranty contact from your bike’s manufacturer. Additionally, always make sure to understand your rights as a consumer. The Federal Trade Commission (FTC), the nation's consumer protection agency, says it’s illegal for a dealer to deny your warranty coverage simply because repairs were performed by someone else: the burden of proof that product failure resulted from previous repairs lies on them.

The concept of insurance is to make you whole again should you suffer a loss. You can insure your bike for the amount of money you spent buying the bike and adding accessories, such as a GPS, and upgrading components or the wheelset. Example; you purchased the bike for $3000 and added a $2000 wheelset, plus you upgraded the derailleur from mechanical to electrical at a cost of $750. You now have an insurable value of $5750.

The Velosurance policy, issued by Markel Specialty Insurance, is known as a “stated value-replacement cost" policy. This means that the client “states” the "replacement value" to be insured and that is the amount covered, subject to the client chosen deductible, with no deduction for depreciation.

You should insure the bike for its purchase price including any cycling accessories added after purchase and any component upgrades completed after the initial purchase. You can make value changes at any time during the policy period if you add accessories or make upgrades.

In a total loss situation (think theft) the policy will reimburse up to the insured amount that can be proven through documentation (receipts). Example: A bike purchased for $3000 with $500 worth of accessories has an insurable value of $3500 and in the case of a total loss you will be reimbursed $3500 less the deductible that you chose. Receipts will be required to prove the bike’s value.

In a partial loss situation where there is damage to the bike that is less than the insured amount, the policy will reimburse the retail cost of the damage, including labor, less the chosen deductible.

We are often asked about insuring a prior year bicycle for the current year's cost and the short answer is no. The intent of the policy is to make you whole again, and in the case of a total loss, that means reimbursement for the acquisition cost of the insured bicycle, and not a new, current year bicycle.

The cyclist policy states that you will be reimbursed for the amount necessary to repair or replace the insured bicycle with like kind and quality less the chosen deductible and up to the insured value shown on the Declaration Page for ‘Bicycle Physical Damage’. Deprecation is not factored into the calculations but understand that technology and pricing change.

FOR EXAMPLE, it may cost less to purchase a similar bike with the same quality components as the original insured bike, and in this particular case, the insured would be reimbursed for the cost to replace the insured bicycle less the deductible. If it costs more than the insured value to buy a bike with the same quality and characteristics of the insured bicycle, the maximum amount reimbursed would be the policy insured value, less the policy deductible. Along with other valuation tools, we may work with a reputable bicycle shop to determine the amount necessary to replace the stolen bicycle.

We know bikes can get pretty expensive and want to make sure we provide just the right coverage. We recommend you get a quote for the total cost of the purchase as well as upgrades and accessories added after purchase. There is no upper value limit when insuring a bicycle or e-bike.

You cannot insure just the frame because the policy covers the entire bike and insuring for less than the bike’s value would be considered “under insuring”, and it has an inherent downside.

Example: Complete bike build $7,000 that includes the frame cost of $3600. Client insured the bike for $3600 with a $100 deductible.

Scenario: Bicycle involved in a crash and the frame is broken beyond repair. No other damage to the bike, just the frame. Cost to replace the frame is $3600 which would be considered a total loss by the insurance company that would pay the full value of the insurance ($3600) less the deductible ($100). Claim paid $3500, and because this is a total loss the insurance company retains possession of the entire bicycle, not just the frame.

Outcome: Client ships the entire bike off to the insurance company and is left with $3500 to replace a $7000 bicycle.

Advice: Insure the bicycle for as close to MSRP as affordable.