Bike Insurance for your E-Bike
When buying an expensive bike, it’s a good idea to consider whether insurance is the right answer for you. Especially as the bike becomes a core part of your daily transportation, insurance can provide peace of mind for keeping rolling in the unfortunate circumstance where a bike is stolen.
Overall: If you have a high-value bike that you use as part of my daily transportation, consider a bike-specific insurance policy from a Markel reseller like Velosurance.
Using Homeowner’s Insurance: Usually Not the Right Choice
Many folks will seek to add the bike to an existing policy, such as a homeowner’s policy or renter’s policy. In general, we recommend against this choice, especially for homeowner’s insurance. The reason for this is related to how homeowner’s policies typically work: making a claim against your policy will typically result in increased premiums; two claims in a single year may result in you being dropped from your homeowner’s policy altogether, and needing to buy very expensive alternative insurance (and since most homeowners are required to have insurance, opting out is usually not an option).
This problem stems from the types of claims typically made against homeowner’s policies: Because many claims are large, there is a bias in the system towards hefty premium increases when a claim is made.
While homeowner’s policies may offer the most affordable option for monthly premiums, and may provide sufficient coverage, the risks around using them for relatively smaller claims like those stemming from bike theft may put you at risk of premium increases that wipe out any savings from the insurance claim in the first place.
If you are going to use your homeowner’s insurance as your way to insure your bike, check specifically that your policy covers your bike (and specifically check with your policy/agent that it covers e-bikes in particular); and ask what the impact of a claim would be on your premiums and insurability going forward. This may be an acceptable choice for some folks, but if you’re likely to make a claim, bike specific policies are probably a good idea.
Specific Bike Policies
Most of the bike-specific insurance policies in the market are various companies wrapping a service around insurance provided by Markel Insurance. This includes Velosurance, Oyster, and buying the product from Markel, so buying from any of these vendors should likely provide the same coverage.
What is different between them is mostly in how they manage the policy and practices. For example, Velosurance tends to offer the cheapest rate on the insurance product; however, they also attach pretty hefty fees to paying monthly, which can eliminate any benefit over their competitors if you are paying monthly.
This insurance provides coverage for bikes that are “secured” when stolen. One of the risks that has unfortunately caused insurance policies to not pay out is when bikes stored in a closed, but unlocked, garage, are stolen from the garage. If you are buying a policy, make sure that you have a good understanding of when you are covered to ensure that you can make a claim if needed. Generally speaking, insurance companies will want evidence that something was broken in order to steal the bike – not just opened or disassembled.
Alternative Insurance: BikeInsure
BikeInsure is an alternative insurance policy (backed by Great American Insurance). The aim of the BikeInsure product is to provide a no-hassle policy, with a fixed price, to simplify the insurance product. In principle, this might provide a good value for some owners at a fixed $25/month. However, the insurance it offers is not replacement/stated value insurance (like Markel/Velosurance’s policies), but instead “actual cash value” insurance, which pays the current, depreciated price of a stolen bike.
In some markets, this is a reasonable insurance product–if you can buy another bike in similar condition to the one which was stolen, then you might be okay with this. However, given the very limited secondary market for e-bikes, and especially e-cargo-bikes, this policy has a good chance of providing you a payout which is substantially below your replacement cost, since to get a new bike in a timely manner will likely involve buying a new bike rather than a used bike.
We do not recommend BikeInsure for most folks looking for bike-specific insurance.
Is Insurance Worth It?
For a $5000 bike, insurance will cost around $25/month, or $300/year. The naive math on this might suggest that for most buyers, this isn’t an obvious correct choice–after all, the overall bike theft rate is likely significantly below 5% for most owners. There are two factors that may still encourage you to look at insurance, despite this:
Some owners simply have a higher than average risk profile. This will typically be related to your use case and where you store the bike. If you work in an area that is likely to be higher risk; have bad bike storage options at work or home, or are storing the bike overnight in shared space, your risk level is likely higher than others.
Of the thefts of appropriately locked bikes we have seen in the Camberville area in particular, they are typically thefts in shared parking overnight, such as in shared bike parking in apartment buildings.
Consider your ability to replace the bike on short notice if it were stolen. Many people will stretch to make an initial e-bike purchase, so making a second one–especially if the bike is stolen relatively soon after purchase–may be a financial challenge. Families buying cargo bikes will tend to integrate the bikes quickly into their daily routines; being without the bike for even a couple weeks can be a major drain. Insurance can spread this pain out over a longer timeline.
Whether insurance is worth it is going to be up to the individual, but I think that for most owners of higher end e-bikes, the value of insurance is likely to be worth the peace of mind of having a way to get back riding again in the case of a theft.
For the E-Bike Library, we choose to insure all bikes in our fleet with a value of more than $3000; this way if one is stolen, we will be able to replace it and keep borrowers borrowing. (Our current cost to insure the bikes in the library is $175/month; if you’d like to help support the library so we can keep insuring our bikes, you can donate here.)