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Is Your Bike Really Insured?

Every play out a “what would I do if _________” scene in your head? Like, “what would I do if I caught someone in the act of stealing my bike?” As reported by Steve In A Speedo, one unlucky thief got to be on the other end of that experiment this spring in an attempt to procure pro jock David Thompson’s bike from his home. Long story short, DKT’s dog woke him up and he actual had time to lace up his boots before kicking down the thief and saving his bike from certain pawn shop doom.

I was not so lucky.

This will mark my fifth summer here in the Twin Cities and I am convinced it’s a town of thieves. I’m no snob either – my last two homes weren’t exactly on the nice side of the tracks. The first was in Hollyhood, I mean Hollywood, Florida. The second was a home I still sadly own back in Detroit (see “A” below) that’s only two blocks from the infamous 8 Mile and less than a mile from the record studio where Eminem recorded Slim Shady and the owner was gunned down in the studio shortly after I moved to the neighborhood.

Yet I never had an issue with these places. Since coming to Mpls two of my bikes have been stolen. The first was my mtb/commuter that was taken from the bike rack in front of the downtown YMCA (Kryptonite lock and all), the second from my girlfriend’s garage earlier this year. These experiences and my work many many moons ago as a Certified Financial Planner and insurance agent lead to this post. So, back to our title question, is your bike really insured? The answer: It depends.

You bike is considered personal property which means it is covered on your home or renters policy even if it is stolen from your car. To find the total amount of coverage you have, check out the Part C “Personal Property” coverage you have.

If you own a home there is a really good chance you’re covered there. If you have a rental insurance policy then anything is possible since you name the actual dollar amount. Assume that number in Part C is less then the cost of your bike (which it will be) you’re off to a good start. Then you need to find your deductible.


Finally, and perhaps most importantly, make sure you have “replacement cost” coverage.

The alternative would be an “actual cost” or “assessed value” policy. Most s***bag agents that would give you either of the two aforementioned policies have been run out of the insurance industry by now but if you buy online there’s no telling what they throw in to keep costs down. “Replacement Cost” is imperative because it gives you the cost to replace your bike with a new bike today. The following example will make it clear why this is important. Let’s say, hypothetically, you are a coach who sends lots of athletes to a bike shop and the shop owner gives you and your athletes lots of bro deals on bikes and stuff. So, you get a really nice Fuji Team Carbon on the cheap. Let’s also say that since your purchase the good people at Shimano completely change how their Ultegra shifters work and no longer make the older version. This means the newer version costs a lot more. So, again hypothetically, maybe the bike you bought for $1,700 three years ago is now worth $700 on craigslist but would now cost $3,500 to replace as new. A Replacement Cost policy gives you the $3,500, less the $500 deductible.

Other considerations: One, if you use the stolen item (i.e. your bike) to make money as a coach or pro athlete it needs to be covered under a business policy, not your personal homeowners policy. Two, never ever call your insurance company to see if making a claim would be worth it. Whether or not you end up making the claim, your policy will get dinged as if you did and possibly increase your rates further down the line.

While my own story doesn’t end with a sweet kick down to save the bike like David Thompson’s did, it ended up working out okay ….

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