M&S renewal paperwork arrived today and I phoned them to clarify the £2k limit and how to work out the bike values for equipment and frames that are no longer in production.

Was told that it was up to me how much to value them but I mentioned the small print about bikes that are undervalued would not be insured so I’m wary of not under valuing them.

The bikes are an HL five spot and a prophet, both frames bought 2nd hand and built up with new & 2nd hand parts.

Should I quote the price I paid for the five spot frame and RRP of parts when new or go by the the RRP of a new DW link one?

For the prophet should I quote the RRP when new them work out the upgrades for parts……..?

Confused 🙂

I need to work out the values anyway so I can compare with other Insurance quotes.

TIA

I made a detailed spreadsheet of every item on every bike (up to and including Exposure light bracket – be detailed). Stated whether part was standard or upgraded, linked to RRP and cheaper source if possible (including a completed ebay sale for an old frame). For an older bike, I had a bike shop give me a quote for a new equivalent replacement. When I came to need it, the insurance company had no qualms about my claim at all – replacement of newer bikes was via Wheelies, the irreplaceable bikes were paid in cash. I did not need a single receipt. Take a photo of each bike and include it in the spreadsheet.

At the end of the day, you are trying to show that you are a reasonable person who has been the victim of a crime, and not claiming for 10K of bikes with evidence of only owning an Apollo.

Cheers for that. Still dont know if I should allow for the cost of a new five spot frame or the cost I paid for the 2nd hand one as M&S cover is new for old?

New cost. Irrespective of what you paid. Some of my bikes were second hand, but this was not an issue.

Any loss adjuster worth his or her salt will know what sort of bike you have. A mate of mine had his Maxlight with XTR groupset stolen. It was getting on a bit, 2005-6 at a guess, and he’d asked me to service it, so I knew what was on it. He’d bought it secondhand and it had obviously been built by a connoisseur, judging by the bombers and thudbuster……… but he asked me for my advice as to what to claim for. I put together a spec sheet with “trickle down” XT groupset at RRP, a new frame and Marzzochi XC forks, and they paid out without a grumble.

Claim new for old, but don’t take the piss is probably the best advice.

Ok thanks for replies.

I’ll have to do a few searches then for the the RRPs of an HL 5 spot frame and Pace forks for a start.

If it’s new for old then you’ll want to value it for what it will cost to replace purchased new at RRP. If the equivalent frame now costs more, I’d insure at that value at least, plus consider adding inflation each year if the policy isn’t index linked. That’s not to say the insurer might not source a replacement more cheaply, but with upgraded bikes it’s potentially cheaper to give you the money rather source a complete bike of at least equivalent spec.

Think of it like your buildings insurance as the cost to rebuild. This can be greater than the current value through additional costs such as demolition and potentially above inflation increases such as labour and materials.

work out the retail price it cost at the time for the bike and all the accessories….even if you got a discount on something always price this up for the full retail price it was back then…
if wheelies are involved i think this is how they also assess the value of the bike

Why back then?

If your bike or components are old, you can’t buy a new replacement for what they cost then, you will generally need to pay more, even if they’ve only gone up to cover inflation.

If the policy were like for like, only then could it be argued that the value has depreciated with age, but you’d need to find a 2nd hand replacement or top up the claim payment.

I can’t see the point of a new for old policy and the additional premium it should represent if you value according to the price you paid say 5 years ago.

Claim new for old, but don’t take the piss is probably the best advice.[/Quote]

+1

You could take the bikes original RRP, plus the RRP value of any upgrades maybe try and factor inflation since the bike was purchased too, but doing this it might start to tot up a bit on the high side and end up being challenged…
It gets tricky of course depending on what you’ve spent on upgrading it, Vs current equivalent off the peg bike prices which will probably work out cheaper…

Alternatively list the spec for your older bike not the part values or year models, and then shortlist 3 – 4 current off the peg bikes you consider to be of more or less equivalent spec’ and take the average of their RRP’s as a guideline replacement value…

An LBS valuation might carry some weight also, especially if it tally’s with your own estimates, but I’m sure the insurance company have their own preferred valuers for certain items…

Insurer’s aren’t mugs, they know you’ll more than likely go sale / 2nd hand shopping with any lump sum so its really about agreeing a reasonable like for like replacement value, rather than fleecing them, or you getting short changed.

It’s not so much fleecing them, it’s more about undervaluing the 5 spot and not getting paid out by them if the worse was to happen as M&S are new for old policy.

Not done the sums yet but pretty sure the complete build was under £2k using a mix of new and 2nd hand parts and I would be happy enough with that evaluation.

Therefore it sounds like I’ve got to work out what it would cost to replace it all as new?

Just look at what similar bikes with similar level kit sell for new.

If you can’t see a bike for £2k that you think would be a fair replacement then don’t put the value at £2k.

As long as the value is less than £4k then you may find it doesn’t affect premium much (didn’t for me).

I wouldn’t worry about overvaluing, your premium is the charge an insurer makes to transfer your risk of loss to them according to agreed terms. The worst case scenario is that they only pay out a depreciated or market value, but these policies have tended to be replaced by new for old in a competitive, mature insurance market. The definite no no from an insurer’s point of view is underinsurance where if you’re lucky they’ll pro rata the claim down but otherwise they might void it.

I work in insurance and people should know that the vast majority of claims are paid. So many people think that insurers try to avoid paying, but this isn’t really the case. Insurers generally need to work to the terms because they insure themselves against some of the risk they’ve taken on from you by taking out their own policies with a reinsurer. If your claim is partly paid by the reinsurer then the insurer has to abide by the terms or accept a loss. Here you need to be remember that the insurer is a business and that your premiums contribute to a pool from which the claims are paid. If more and greater value claims and ex gratia losses occur than charged for in the premiums then that pool decreases and so the premiums need to be increased. It’s not all profit either, insurers have to hold statutory funds and are relatively heavily regulated.

I’m with M&S and have just started the claims process after being broken into this week.
So far, it’s been fairly straightforward. I listed the bikes, upgraded parts and accesories to Wheelies who apparently validate the prices and then will advise M&S on a suitable settlement amount. I’ve said I don’t want Wheelies to replace the bikes. If I get another road bike, i’ll sort something else out.
Will be interesting to see how they payout on my Specialized Allez road bike. I paid £1000 for it back in 2009 and it came with Shimano 105. You don’t really see 105 on £1000 bikes anymore. Most at that price range now come with Tiagra.
The frame also had carbon rearstays which the new Allez doesn’t have….. maybe i’ll get lucky and they’ll pay out at the price of a carbon model.

Will be interesting to see how they payout on my Specialized Allez road bike.

They won’t exopect you to take an equipment downgrade IMO. I wouldn’t worry if I were you.

londonerinoz – i’m going from experience…had my 2002 Haro Dhr stolen last month…put a claim in to Halifax insurance who told me they would cover up to £2k for the bike as it was in the shed at the time of the theft…when i got the cover i told them the bike had cost me £3k to build but in fact it had cost me £3.5k… Halifax at the time told me the insurance would cover me up to a max of £3k without the premium being affected…
i sent all the spec list and pictures to wheelies who valued the bike at £2.7k leaving me short of £300 on the insured amount…i had prepared to accept a loss of the extra £500 the bike had cost me by not paying any more on my premium…
although the max they would pay out was £2k…wheelies were prepared to do me a deal where i could take any bike from them up to £2.6k (minus my excess) and they would do a discount for Halifax…
i decided against this as i still felt it was undervalued…and i also had a problem with the limited cover on the shed which i was never told about…i complained and Halifax reviewed the complaint and listened to the original sales call and found that i was in the right….
they then offered to pay £2k (consisting of £1.7k for the bike, £200 for another frame taken and £100 for the locks that also got pinched)…in addition to this they also paid a further £1300 to take the payout for the bike up to the full £3k which it had originally been insured for and a further £300 compensation for mis-selling the insurance to me…they never took into account any depreciation for a bike that was more than 10 years old…

gonzy, are you suggesting you’ve had a different experience to the various possibilities I’ve outlined? I don’t see any contradiction, but it’s hard to say for sure without evaluating the terms, some products are better than others but some sort of compromise needs to arrived at in the insurance product design to balance benefits and features against cost and exclusions. It sounds like the insurer honoured the standard terms initially, and then when you complained they acted responsibly in investigating that you were missold. Therefore the claim is getting fairly assessed for you and for all the other policy holders who’ve paid their premiums into the pool. That seems to me to demonstrate an example where the insurer has sought to pay the claim appropriately. Depending on how they handle applications they could have just pointed to your application declaration where you presumably agreed that you had read and understood the terms and conditions of the product, which would have included the shed maximum limit.

Funnily enough, I had multiple experiences of successful bike claims in London long before I came to work in insurance. I always listed out everything by current RRP on a spreadsheet and took photos. When I got run over by some nut which resulted in my frame and wheels being unrepairable, it was cheaper for them to let me choose an equivalent specced newer version of my old bike with some upgrades than go the frame only and wheel replacement route. Therefore everyone was happy and I had maintained the replacement value of my bikes in the valuations.

Reading this with great interest. I’ve just been talking to an insurance company who depreciate bikes over two years. However, they’re not sure what to tell me as bits of my bike are over two years old but some are new/nearly new.

Come across that situation Londonerinoz?

are you suggesting you’ve had a different experience to the various possibilities I’ve outlined?

not really. no…all i’m saying is from my experience i managed to get the full payout from my insurers…like i said the bike was 10 years old but had cost me that amount at that time to build…over the years other parts were upgraded and changed…which i reflected in the amount insured…the insurer could have said the bike was worth less given its age and depreciation etc..but they didnt so hats off to them…my total cost for the bike was what i paid for the frame and parts at that time…of course i got some good discounts on quite a few parts from my LBS but that was between me and the shop…i still went with the RRP price of each part…
that is the point i was trying to make with my first comment…that’s how i did my claim and i got the full settlement…
as regards the small print…yes i should have read it as it was there…but my point to the insurer was that the agent said my bikes would be covered for the full amount anywhere on the property and made no exception of the shed, and therefore had misled me to believe the shed was covered to the full amount…from my point of view if they had told me about the limited cover on the shed i would have gladly paid more on my premium to cover the bikes for their full amounts…but like i said they had misled me into believing that the standard contents cover included each bike up to £3k anywhere on the property…
which brings me to my second point…if anyone is getting bike insurance under their home contents insurance please make sure they are being clear on how the bike is covered and what if any limitations are…

Onzadog, your example demonstrates why new for old is a superior product IMO, it’s far more likely to satisfy the insured, it’s far easier to administrate and settle, and you avoid all this depreciation nonsense which is really an accounting treatment for claiming tax deductions on assets. But it should cost more in premium because the benefit isn’t decreasing over time. That said depreciation has its place in reducing premiums but you need to realise that you’re going to need to top up the settlement to purchase a new and equivalent replacement. If the likelihood of a claim is low and you can afford to top up, then it can work, but personally I’d seek out new for old and pay the premium, or at least include the bikes as specified items where you might pay additional premium to ensure your coverage, backed up with your spreadsheets and photos of course. Some insurers have the flexibility, others don’t, either due to the product and pricing design, or whether the staff are trained and authorised to give advice.

Overall, insurance requires a loss to occur, but the different styles of product are indicative of differing perspectives on what loss has been suffered. With depreciation the perspective is that you’ve lost the current market value, and that the settlement will meet the cost of a similar 2nd hand replacement. New for old recognises how much it will cost to replace your loss with a similar new replacement. Really it exceeds your genuine loss, you profit from the loss, but you invested in the benefit through the additional premium you paid, so you receive a lifestyle benefit. As you can imagine this is relatively new thinking, it addresses the sensibilities of our consumer culture, the benefit is easy to understand and the insurer can reduce their administrative costs through the simplification so that the premium doesn’t need to increase as much as it should. It avoids much of the valuation and settlement difficulties, variations, and disputes. Such issues also reinforce your position even with a depreciation based benefit because the enthusiast cyclist building and upgrading bikes makes it really awkward for them to apply their rules, much more so than most other items that aren’t normally considered as valued according to their components.

As you can tell though I no longer live in the UK and much may have changed in the years since I emigrated. Sorry if I’d bored you but it’s evident to me every day that most people don’t really understand insurance, so perhaps with a little background explanation you’ll be better placed to evaluate your options.

That’s actually really helpful, thank you.

Just to confuse myself even more I phoned wheelies earlier to get some advice on how to go about valuing the 5 spot as M&S use them, ie new frame equivalent or cost of what I paid for my 2nd hand frame.

Pretty sure I was told that they would do their own valuation and wouldn’t necessarily cost the price of a replacement 5 spot frame but one of ‘similar’ build material…..ie, same grade of aluminium…
So does that mean they can quote for a much cheaper standard HL type make frame….My heads spinning!!

If this helps anyone else out in a similar situation I’ve just had an email reply from M&S and they have said that for valuating my bikes I should use the costs of what I paid for the 2nd hand frames and mix of new and used parts to work out the total value.
They would then offer a bike of similar type/value or discuss a cash settlement.

Seem fair enough to me and also saves me overpaying for the insurance.

I’m pretty sure that the M&S policy for pedal cycles specifies a £1k limit per cycle….

Daffy, that’s why people are going through this process. Bikes now need to be specified.

Daffy, for new customers it is but existing customers it’s a £2k limit.