Insurance payout for written off bike: new or secondhand value?

Hello,

I was hit, hard, by a car a few weeks ago (broken bike and broken spine). A bike shop has assessed the damage to the bike and recommended writing off the whole thing. My solicitor has mentioned that the car driver’s insurance company (who have accepted liability) are only obliged to pay out the value at the time of the incident, not the price of a new bike.

Now, my understanding (mainly from here!) is that generally speaking in this context, it is widely acknowledged that “replacement cost” means “price for a new one” rather than “amount that I’d have got if I had sold the bike on STW”. The reason being that (unlike with cars) it’s not possible to simply log on to e.g. eBay and find a truly equivalent bike (mine was a Litespeed titanium road bike with bits that I’d built up over several years) in the same size, specification, condition etc. Is that the case?

I understand that the premise of insurance replacements (in the absence of a specific new-for-old policy) is that you must be restored to as good a position as you were in before the loss. Since there’s no way to get an exact replacement, is it not fair that I should get enough to buy a new one? I really don’t want to be trawling eBay for months trying to find a bargain that’s nearly as good and nearly the same size / shape as my old bike!

Does anyone have any expert knowledge or personal experience here that might shed light on this? My solicitor has so far been good, so I don’t want to give him a hard time unreasonably, but I also don’t want to lose out and end up either with a crappier bike, or having to add a load of my money in order to get a decent one (which is what would actually end up happening).

Like you I’ve always thought with bikes it was the cost of a new bike you got. At least that’s what people i know have received. You wouldn’t want 50% for the first year then 10% per year applied 😯

Lots of trawls of paperwork to back up your case – eBay completed auctions, lists of parts.
The ‘doof’ factor as my boss used to call it, as in the sound the mound of paper makes when it hits their desk.

Invite them to source another s/h one of equivalent spec. ??

I believe that they need to indemnify you and to put you back in the situation you were at before their client ran you over. When herself was T-boned on her way home from work 18 months ago, we took her bike to a LBS who, for a fee, inspected and valued the damaged items (one of which was a carbon fibre frame and fork). After a certain amount of chasing she received a cheque for the value submitted.

I hope you went to your local LBS that you use regularly. They should be able to provide a detailed valuation of your bike that allows you to purchase just what you need. An assessment by them of market value should be all you need to provide. There can sometimes be a small fee-often its waived if you are a regular

Invite them to source another s/h one of equivalent spec. ??

this.

ask them where the second hand bike shops are these days….

its not a car FFS – they are trying it on.

I’m in the process at the moment and finding it a bit weird, this is a flood house contents claim. Some of their decision making seems to be a bit confusing. They’re giving me what amounts to new for old on items that are still available to buy. However, anything that’s not made anymore, they’re just offering me current ebay prices, rather than original price. So, my 10 yr old sofa with an ebay value of £150-£500, they’re offering me full new price of £2500, because it happens to be still available new. My 20yr old speakers, which were quite expensive (about £200), they’re offering £50 (second hand off ebay valuation), just because that model isn’t made anymore.

Glad things are at least moving along OP, hope the injuries are healing up, it’s a bugger being stuck inside on a sunny day!

I hope you went to your local LBS that you use regularly. They should be able to provide a detailed valuation of your bike that allows you to purchase just what you need. An assessment by them of market value should be all you need to provide. There can sometimes be a small fee-often its waived if you are a regular

I’m sure that sounded less condescending in your head.

Most insurers deal through wheelies anyway IIRC, hence why bike shops charge insurance estimates because 9/10 they don’t ever see the money anyway.

Glad things are at least moving along OP, hope the injuries are healing up, it’s a bugger being stuck inside on a sunny day!

I hope you went to your local LBS that you use regularly. They should be able to provide a detailed valuation of your bike that allows you to purchase just what you need. An assessment by them of market value should be all you need to provide. There can sometimes be a small fee-often its waived if you are a regular
I’m sure that sounded less condescending in your head.

Most insurers deal through wheelies anyway IIRC, hence why bike shops charge insurance estimates because 9/10 they don’t ever see the money anyway.

Sorry wasn’t meant to be condescending at all. Having been through the process ( along with a number of others) a valuation of damage/market value from a bike shop was all that has been required.

My solicitor has mentioned that the car driver’s insurance company (who have accepted liability) are only obliged to pay out the value at the time of the incident, not the price of a new bike.

He’s right (in a way)

If a second hand bike were available to buy that was the same as yours, that’s all they obliged to pay for.

It is unlikely they can find one though, so they may have to spend more and buy new.

“because it happens to be still available new. My 20yr old speakers, which were quite expensive (about £200), they’re offering £50 (second hand off ebay valuation), just because that model isn’t made anymore.”

thats because the operative at the other end typing your information into google only has the ebay price to go on – items with a new price are easy to price – the new price comes up doesnt it …..what are they supposed to put for a value for an item they cant find for sale ?

My Whyte T-130 Works was on the back of my car when someone ran into the back of me at a red light, despite only minor damage being apparent they paid me the full replacement value for a brand new bike. I guess it helped that Whyte said they wouldn’t warrant the frame as it had been in an accident.

I’d expect the insurance company to pay for a new bike to the same spec as your old one even if strictly they aren’t obliged in las to do so. To be fair the cost of replacing the bike will be minor compared to the potential costs of the personal injury payout on a broken back, my advice is don’t settle too soon as the true long term affects of the damage might take a while to manifest themselves.

A lot of talk of payout, can’t you flip it?
Send them a picture of your bike, your address and tell them to send you exactly the same (fully built). Let them know that if any part is not of equal quality or condition as yours were, it’ll be getting sent back.

OK, think about it logically. Let’s say you broke your arm. No insurer can give you a new arm, so you get a money value, as the law recognises that “to be put back into the position of the loss” is both desired, but often impractical. So your bike is valued, and you get that value. If you had a 20 year old bike,worth £100 new (RPI now being say £170) you’d not expect a new one, would you? You get a parcel of cash that financially puts you back where you were. Your argument about the bike is the same as some irreplaceable item of heirloom, a specific optioned car, or your radius! Just because you can’t replace it practicably,you can at least go forth and have a similar asset of the same value.

Legally he’s right – where the value is the amount it would cost to buy exactly the same thing in the s/h market. However you and others are also correct that you’re required to be put back in the same position you were before the accident, and that it’s simply not possible to buy expensive bikes to a given spec s/h – it’s not like a Focus where you can just go and buy another one much the same. In practice my experience is that they will pay out the new replacement value for anything broken based on a bike shop quote – I suspect because it’s more hassle than it’s worth for them to argue about it, particularly in your case where the cost of replacing the bike (yes even a Litespeed) will be dwarfed by the other compensation they’re paying you. I’ve twice got a payout on somebody else’s insurance involving compensation for injury – one involved lengthy legal proceedings just stopping short of going to court – and both times they just agreed to the bike repair costs without even commenting (AFAIK – my solicitor dealt with all that, but nothing ever made its way back to me).

For claims on your own insurance maybe – not generally the case for claiming off motorists or other insurance I don’t think. At least not in my cases where I just got cash payouts (I didn’t actually replace much on the first one, but spent far more than that quote at the same bike shop from the wodge I got from the second one).

I would instruct your solicitor that you won’t be accepting a cash settlement for the bike that’s less than required to cover a new replacement bike. If the other party’s insurer is able to provide a like for like second-hand replacement then you’re willing to see what’s offered but will reject it if it’s in anyway worse than what you were riding at the time of the accident.

If they insist on second hand value, send them an estimation for the hours that it’ll take you to trawl through ebay finding these no longer made, or custom made parts and the labour cost of assembling it.
Then the rental cost of an equivalent bike to ride while you spend time finding stuff that might only come up once or twice a year on ebay uk. Or they can pay US postage.

Then some sort of an indemnity to cover the fact that none of it will have a warranty as it’s second hand. Or fake. (some of your stuff is still in warranty isn’t it?)

Three or four grand should cover it.

Some insurers really do take the piss.

To be fair, at this point it seems the solicitor is just suggesting that the insurance company could take the piss. The only worrying thing is the implication that your solicitor might let the insurance company take the piss rather than fight as hard as possible (though again in context, if he rolls over on the bike, but does an excellent job on the injuries you’ll probably be up).

wot aracer said
i think your solicitor is warning you of what could happen, and thus covering his back side/ managing your expectations.
It hasn’t happened yet, but if it does you are for armed

Thanks all. Yes – the insurers have not yet adopted a position on the bike – this is just my solicitor stating their obligations. I just wanted to confirm that my stance on this wasn’t contrary to others’ understanding and experiences.

To those who have suggested that having something of equivalent ‘value’ is the fair outcome – I essentially agree. However, in this scenario, there is no appropriate and universal definition of value. Supposing my bike were worth about £4k new, but is a few years old. I might only be able to get £1500 for it if I were selling, but the point is that I don’t /didn’t want to sell it. If someone offered me £3k for it I’d probably have say no ta. I’d have to get spectacularly lucky to find something that is equivalent (to me) for the same price as I could sell it for, or even a bit more. The real actual reality is that if they gave me £1500, then what I’d end up doing is adding a load of my money and buying a decent new bike, because riding someone else’s old bike is not going to be the same or as good as having mine (objectively, not sentimentally), and buying a new one for £1500 is not going to be as good either. So from my perspective the ‘value’ is what I would have accepted for it on that day if you waved cash in my face, which is maybe 90% of the new price. If they offer me that then I’ll be fine.

I would really much rather this hadn’t happened – I’m not rubbing my hands together thinking “mm, new bike”. This bike fitted me nicely, was comfy, not much heavier than others, and I rather liked it. In some ways even buying a brand new one will be a bit of a pain. I’ve thought about getting a new one in recent years but haven’t, because mine was already so nice.

I’ve no idea how much the compensation for the broken back will be. It hurt a tad, and I now have titanium holding it together, but I’m optimistic for a full recovery. Similarly though, if someone offered me a few hundred grand for going through that (and my family going through it!) then there’s no way I’d sign up. Compensation won’t be on that basis though, obviously, so I imagine it’ll be a few grand, which should at least pay for a nice holiday for all of us once I’m better.

Oh and regarding being nice to LBSs – I’m relatively new to this area (well, 4 years or so), and haven’t had much need of an LBS in that time. Turns out they are nice people though, so it’s very likely that they will end up getting some new bike business from me once all this is sorted out. Regardless, when asking them to assess the damage etc, I was quite clear that I expected to pay for their time.

I claimed new for old on my own policy and left the company to chase the driver’s insurance.

I’d say you can accept a used bike assuming that they can find one with the exact same spec and can be sure that it is safe and does not have previous crash damage etc that may have weakened it. Also if yours was new when you got it and under warranty still then explain that you would want that same cover.

They can’t achieve all the above without frame xrays etc and you should get a new one.

Some people appear completely unrealistic and missing the point.

Your bike has a value. You lost that value. They provide funds to give you back that value. That was your loss. No more, No less. You lost a bike worth say £1500 (and not the £4k new) you get £1500. Now, how about all those people who “scooped a bargain”,ie picked up a bike for say £1k on ebay, that was really worth £1500. And it gets stolen. Is paying you £500 less than it’s true worth, just because thats somehow related to what you paid, and not its market replacement cost, really fair?

To the OP, ignore all the daft nonsense here about what people “would or wouldnt accept” such as replacement bikes to exact spec. If you “refuse”, they’re not going to change their mind. All you can do is go to Court to try and compell them to comply with your wishes. But regrettably it would take a most barmy judge to find for you, as well worn and laid down principles will guide his judgement, such as “it was worth x, they offered you x, so you can replace it” and find against you.

Or to extrapolate further – your auntie dies and you “inherit” her car. It gets stolen. If the insurer rang you and said “well, you paid nothing for it, so we’re paying you nothing” really on? Or is it the “replacement” value. No one can make Aunties vintage Morris Minor which had the rosy glow of sentimental feelings come back, but you can be given a cash sum to get another Morris Minor as close to Aunties as you can find.

Already explained,many things are not “directly” replacable,which is why your loss is generally a cash value of the loss. No one is required to “replace” an item with another. As stated – you can’t “replace” items which are unique or one off items.

And to all those that somehow instead of sending you a cheque, the insurer should somehow be obliged to “go shopping” for you, can you not see how impractical that idea is. Or more to the point, if you want to quadruple claims staff, claims costs, and therefore premiums, go ahead, because ultimately people will have to pay for the service of surfing ebay for tatty old bikes. And if they did, people would complain that they’d rather have the money anyway to spend it on what they want!

Some people appear completely unrealistic and missing the point.

They do indeed.
The OP didn’t lose £1500. They lost a bike, and in particular a custom specced Liteville. It’s resale (and indeed original) monetary value is completely irrelevant unless there is an identically specced bike with exactly the same age and wear for sale out there. That would realistically be the only acceptable way to ensure that the OP is left no worse off. Just because his bike may have sold for an amount, it doesn’t mean he can buy a replacement for that.

And to all those that somehow instead of sending you a cheque, the insurer should somehow be obliged to “go shopping” for you, can you not see how impractical that idea is.

It’s not exactly practical for the Op to do it either. Why is their time worth more than his and how else could they prove the value of his bike?

Gray,

Snap. That was the sound of my shoulder being relocated last June 16th following something similar happening.

Knocked off by a myopic old git, while going up a short rise on the road on my Ti Jones, in full sun. I was going too fast apparently. 😕

Also using CTC solicitors and it’s dragging on a fair bit-feels like it’s going no where.

My LBS inspected the bike and said was written off- buckled downtube and splayed truss fork, crisped front wheel etc. So I submitted a claim for the bike hoping to get a payout for this and back on the road.

Initially I was offered a derisory, ridiculous, laughable amount back in September last year, which I rejected. CTC/S&G organised an independent inspection with a switched on loss adjuster. The value he placed on it was fair, not as much as I’d put on it, but reasonable. To get things moving, and get me back on a bike, I accepted this. More dragging of feet and inactivity from S&G, but eventually the cheque arrived a couple of weeks ago….with a 10% reduction for salvage!

Told S&G that I’m less than happy and want them to go back to the other side and get my 10% back or let me know where they get the slightly bonkers £150ish/kg for scrap titanium.

Slightly worried as we haven’t got to the loss of earnings/damages negotiation yet. Beginning to wonder if I should have not gone for a limited fee solicitor rather than the take-it-all carrot offered by the CTC. So 8 months later I still haven’t got any cash for the bike and don’t seem to be even close to settling the whole case.

Hope this doesn’t depress you too much, I might just be having a string of bad luck.

Glad to hear you’re on the mend, go easy, you’ve only got one back.

@wrecker I couldn’t have put it better myself.

Nobody has said “I paid x so I should get x back”. We’re simply saying the the ‘value’ should be “how much it costs to get something as good” rather than “how much you’d have got for it in the classifieds”.

If it’s not possible in practice to buy something secondhand that is equivalent, but it IS possible to buy one new, then it is reasonable to expect the insurance company to pay up for that. It’s nothing to do with sentimentality, it’s that I chose each and every component to suit my needs. It’s not like Auntie Doris’s undercrackers, it’s more like having an expensive tailor-made suit that would cost £1000 to replace with new. It might have had a low resale value, since it wouldn’t be bespoke for anyone else. But if an insurance company said “you’d only have got £100 for that on eBay, so here you go, get yourself off to TopShop” then that wouldn’t be fair. It *could* be replaced with an equivalent. That would cost a grand. So that’s the replacement value. In my opinion, anyway.

If they could track down secondhand bits in the same condition, and pay someone to build it all up for me then fine. I don’t think I should do it though – it’s not my fault that some **** drove through me. I’m not going to feel guilty about costs to the insurance company – there’s only one person to blame for that.

@clump: thanks, that’s interesting. Sounds rubbish for you – sorry to hear it. Hope it gets sorted soon. I’m amazed by the salvage thing – that’s nuts. If you accept an amount, then they shouldn’t just arbitrarily decide to reduce it. If they want the frame back for salvage then they should arrange someone to come and collect it from you!

My thoughts too.
Does look good on the wall of the garage though.

My daughter is in a similar position, a car pulled across in front of her, knocking her off, breaking her leg and writing off her bike.
She’s been offered second hand value, but has the added difficulty of living in Bucharest and dealing with dodgey Romanians.