As an insurance agent and a person that loves bikes, you may want to consider adding your trusty bike as a separate item on your homeowners or renters insurance policy when purchasing a $1,500 or $9,000 bicycle. This is called “scheduled personal property”. There are a couple of reasons to do this:
- No deductible applies when scheduling personal property. Your current policy will cover most losses to your bicycle under the current policy (such as damage caused by home fire, theft, or even a car smashing into your bike) but you will have to pay your deductible first. Most homeowners policies have a 1% deductible, so if the average home price is $150,000, then you’re left paying a $1500 deductible before the insurance kicks in a single dollar.
- There may be limits of coverage under your standard policy. More common reasons people schedule – or specifically list certain items of value would be to insure the $7,000 wedding ring which would exceed the standard limit of $1500 that most policies will pay towards fine jewelry. Collectibles, art, camera equipment, guns, and furs are some of the items to be considered as well under this category that often have specific limits of coverage under a standard homeowners policy since they are easily portable and valuable (burglar’s delight). Not many people get their couches or refrigerators stolen in a typical home theft as you might imagine.
- Standard homeowners or renters policies will only cover the ACV (actual cash value). ACV means the cost to replace minus depreciation which end up being pretty minimal coverage. I always recommend replacement cost coverage for personal property to my clients, but this still subjects you to the deductible on the policy which might be prohibitive when filing a claim on a $2000 bicycle. For example, that $2,000 road bike you bought 7 years ago that is in immaculate condition might only be covered for $400 ACV since it has “depreciated”. What you want is replacement cost coverage which provides you enough funds to purchase another bike of the same value today.
Most homeowners or renters policies will cover your personal property anywhere in the world so you can relax when traveling with your bike. Wear and tear – also known as crashing on a trail, falling on a slick road with no cars involved would not be covered under any policy. Give me a call today at 940-268-5112 or email me your questions if you need more information about insuring your valuables.