Does Velosurance depreciate the bike’s insured value?
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The answer is NO. The policy does not depreciate the bike’s insured value by deducting value from a claim reimbursement based on the age of the bike.
The type of policy that deducts value based on the age of the bike is known as an Actual Cash Value policy, often referred to as ACV. While the term “actual cash value” sounds good initially, it is in fact very unfavorable to the client when it comes to claim settlement. No one is ever happy with an ACV depreciation-adjusted claim.
Most ACV depreciation starts in the first model year of the bike and continues as the bike gets older. Depreciation is a hidden deductible that increases year after year.
The Velosurance policy is a replacement cost policy (RCP) with zero depreciation so the reimbursement for the same five-year-old bike will be $4700, factoring in the $300 deductible, which is a $2,200 difference.
Replacement cost policies present a far more beneficial loss reimbursement as can be seen in the example of the five-year-old bike where reimbursement is either $2,500 ACV versus $4,700 RCP and that $2,200 difference is why Velosurance is America’s Best Bike Insurance.
There is no substitute for value and value is remembered long after price is forgotten. Our policy might cost a little more but in the long run, if you ever suffer a loss, you will thank yourself for making a wise decision.
Why is no one ever happy with an ACV-adjusted claim? Please consider that a bike insured for $5,000 ACV that is now five model years old and suffers a theft or a total loss due to a crash will be reimbursed $2,800 ACV less the policy deductible of say $300, for a total reimbursement of $2,500. This amount is simply not sufficient to buy a comparable bike, even used. With a declared value policy from Velosurance, the claim reimbursement would be $5,000 minus the $300 deductible, or $4,700.
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