Bike insurance premiums may rise, warns insurer

Increasing popularity of carbon fibre driving payout costs up

Cyclists have been warned that bike insurance premiums might rise because the growing popularity of carbon fibre bikes – cheaper to write off than repair after a potentially damaging crash – is leading to bigger payout costs for insurers. The warning comes from Adrian Scott, head of the Cycleguard insurance company. 

“The more carbon bikes we’re insuring – which will go up – inevitably [means] the cost of accidental damage claims will increase with it,” Scott told BikeRadar. “So inevitably it will have an impact. It’s a growing factor that we have to consider and the industry needs to come up with a suitable repair process. Hopefully it might offset itself with the cost of the frames coming down but a repair is still a tenth of the cost of the replacement.” 

Halfords told BikeRadar they had seen a 39 percent increase in carbon bike sales by volume year on year. Insuring a bike worth £1,750 – a popular price point for many more serious riders – in central London varies, but we sourced quotes varying from £138 to £185 a year.  

Scott said it was difficult to predict if and when premiums might increase, but believes that within three years carbon “will almost certainly be a level with most intermediate cyclists”.

As well as hoped-for reductions in frame costs, Scott said decreases in bike thefts – which currently account for about 70 percent of Cycleguard’s payouts – could play a role in offsetting premium increases. They also want to increase the number of carbon bikes sent for repair, but there are challenges. Repairing carbon – and providing a guarantee for the fix – is tricky for insurers, said Scott, and is usually not a viable alternative to writing off a frame and providing a new one.

He added: “There’s reluctance in the whole industry to accept repairs. Independent cycle shops won’t touch it and they provide similar feedback to the customer, so the customer has a real unwillingness to go against the advice of their trusted expert in this sector.”

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