My mate had his bike pinched in Swindon just before Christmas, all insured so he thought no problem. Instead of getting a cheque for a replacement they want to buy him a bike off the peg and get it delivered to his house. I dont see the problem but he wants to have the pleasure of building his replacement. They are adamant that they do not send out money.

Is this normal or is he being a twit.

It's normalish I think, though if you phone them up and explain that it wasn't an off-the-peg bike that was stolen and that you can't just buy a replacement from a bike shop as it's a specialist race configuration, then they are normally ok about sending a cheque out. Of course if it was an off-the-peg bike stolen, then that's a different matter entirely 🙂

My bike was stolen a few months ago – built myself. Sent insurance company an honest list of the equivalent replacement parts and a cheque for the fill amount (less excess) arrived within a week.

Well chuffed.

It's fairly normal but you do have the right to refuse, although they don't like it as they don't get their discounts.

The Ombudsman says: –

"Policyholders should be allowed to choose where they purchase a replacement and they are entitled to a cash settlement if they cannot find an acceptable alternative. In such circumstances, we would not regard it as reasonable for the insurer to make a deduction from the cash settlement to represent any discount it would have got if the policyholder had bought a replacement from one of the insurer’s nominated suppliers. Nor would it necessarily be appropriate for the insurer to offer vouchers to the policyholder. If the option of replacement is not available, then the only way in which the insurer can indemnify a claimant is by a cash settlement.
In some cases, policyholders may not wish to purchase a replacement for the damaged or stolen goods. This may be, for example, because their circumstances have changed, or the object had sentimental value. Where this is the case, we will normally ask the insurer to agree a cash settlement".

Its worth seeing what the offer is for direct replacement as some of the direct replacement companies are a bit over-keen to up-value your replacement. But refuse if its not what you want. I had a bunch of tools stolen, some were just B&Q own brand guff, the direct replacement stuff obviously can't source other peoples own brand gear so offered me makita and electra-beckum stuff of four or five times the value in the hope it 'would be acceptable'. Eventually I caved in 🙂