THE BOOMING popularity of cycling is changing the range of bikes on the market and even the design of urban transit.
Electric bikes in particular are increasingly popular with commuters, aging baby-boomers and students who can’t afford cars.
Insurers, however, have been slower to embrace the new technology. Many seem content to offer limited coverages under home policies or endorsements to cover the loss of expensive bikes.
A few innovative brokers and underwriters are offering standalone policies covering conventional or electric-assisted bikes.
National and provincial cycling associations offer insurance to their members, but such policies — typically covering damage to the bike and some liability — generally apply to sanctioned events such as competitions or rallies.
Nowhere is pedalling more popular than in B.C., home to almost a quarter of Canada’s cycling specialty stores. Cycling BC members who compete in road-racing events are insured through Jones Brown, whose Vancouver VP, Bill Semrau, is a competitive cyclist himself.
So far Cycling BC coverage includes liability and out-of-pocket medical expenses anywhere in the world — for event organizers and for individuals participating in a sanctioned event.
Starting next year, though, Jones Brown will offer association members theft coverage. “A standard homeowner’s market typically has a (theft) limit that can be as low as $300 up to $1,000,” Mr. Semrau said.
“In the road scene, especially in triathlon, it’s not unusual to have a $10,000 to $15,000 bike.” So next year his firm will offer association members theft coverage with separate rates for values up to $5,000, $10,000 or $15,000. For individual owners of expensive bikes, Mr. Semrau’s advice is to negotiate coverage through a home policy.
“Most home insurance policies will allow you to schedule bicycles, so there’s no deductible, which is nice.” “But typically the premiums can be a couple of hundred bucks each,” Mr. Semrau said. “Typically a client who has, say, three or four $10,000 bikes —their lifestyle is going to fit into a high net worth market anyways, so you wouldn’t need to look at scheduling the bikes outside that.”
When Mr. Semrau is not competing, he and his wife cycle recreationally. She rides an e-bike to keep up, “and then, when the road tips uphill, she just takes off on me.”
He was quick to add that husbands, boyfriends and coaches of female racers also rely on e-bikes to keep pace. But because Cycling BC has no competitions for e-bikes, they are not covered by the group’s insurance.
“Over time underwriters will catch up,” Mr. Semrau said.
Among the few purveyors of policies to individual cyclists is Oasis Outdoor Adventure & Sport Insurance Solutions Inc., a national MGA based in North Battleford, Sask. Through its online Pedal Power brand Oasis offers provides coverage for e-bikes as well as conventional road and mountain bikes.
“When we created the Pedal Power website in the first place, it was not our plan to go into e-bikes,” Oasis principal Keith Bossaer said.
“But the consumer was telling us there was a need for it, because it wasn’t available in Canada.”
He reckons that Oasis has seen 50% growth in each of the five years it has marketed bike insurance online at pedalpowerinsurance.ca.
“I truly think this area, including the e-bikes, is really growing,” Mr. Bossaer said. “Consumers have become a little more aware that a lot of their home insurance doesn’t cover high-value pedal bikes, e-bike or not. A lot of them might not cover business-use-related use of pedal or e-bikes.”
Those policies that do cover the loss of a $2,000 bike might carry a $1,000 deductible — and a claim could end a discount on home insurance. That makes stand-alone bike insurance appealing to many consumers, he said.
A Pedal Power policy might have a $250 deductible on a total loss of an e-bike worth $1,800, with no effect on the owner’s home policy.
Mr. Bossaer said it can be hard to persuade underwriters that stand-alone bike insurance is a viable product.
“A lot of them don’t want to touch it,” he said. “They don’t believe that you could ever create a genuine, true program that could show the prospects of profitability in the long term.”
He said Pedal Power is underwritten mainly, although not exclusively, through Lloyd’s syndicates.
“We started off pursuing the very high-value (bike owners) only, assuming that those were going to be the only ones quite interested. “We eventually had the syndicates move it down to $3,500, then to $2,500 and now to $1,000.”
Even people with $400 bikes might “really need and want liability coverage because they are commuting to work.”
Mr. Bossaer estimated that liability and theft coverage on a $3,500 e-bike, owned by a member of a mountain biking association, would run just over $202.
“We’re trying to offer it to Canadians . . . whether they’re the member of a club or not.”
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