It is about the bike

Lance Arm­strong may have tried to con­vince the world it’s not about the bike, but his cred­i­bil­ity has gone down the tubes, and any­one who has re­cently re­paired or re­placed a bike will tell you – it is very much about the bike.

RISKSA Magazine - - CONTENTS - Christy van der Merwe

Bi­cy­cle in­sur­ance is be­com­ing ever more pop­u­lar as the cost of bikes sky­rocket, and the pop­u­lar­ity of road cy­cling and moun­tain bik­ing con­tinue to take hold. Bi­cy­cle in­sur­ance prod­ucts have also evolved to keep up with the re­quire­ments of these fast- paced adrenalin chasers. “The most ex­pen­sive bike on our books is R180 000,” says Cy­clesure MD, Fred Hen­nings, putting things into per­spec­tive for RISKSA. Chris Willemse Cy­cles Wil­low­bridge branch man­ager, Mar­nitz Au­camp, af­firms these fig­ures, not­ing that in the last week, the store has sold cus­tom built bi­cy­cles for R112 000 and R94 000. While the most ex­pen­sive bike sold re­cently was R140 000, Au­camp notes that the av­er­age cost of bikes sold is about R70 000. " Cy­cling has be­come a very pop­u­lar sport, and it is very pop­u­lar among fi­nan­cially savvy peo­ple – you can see this in the way peo­ple ne­go­ti­ate on price – and for this rea­son most peo­ple will insure their bikes," Au­camp adds. Sean Botha, MD of Pol­icy Provider, with its cy­cle spe­cific in­sur­ance prod­uct iCy­cle, tells RISKSA that the most ex­pen­sive bike it cov­ers is about R150 000. In­deed, these are not prices re­served for pro­fes­sional cy­clists, but rather the av­er­age busi­ness­man, as this is the sport that is seen to be over­tak­ing golf in pop­u­lar­ity among busi­ness peo­ple. The first bi­cy­cle spe­cific in­sur­ance prod­uct on the mar­ket in South Africa was from Cy­clesure, which opened doors in 1998. Backed by Hol­lard, Hen­nings notes that in the last three years the com­pany has seen a tremen­dous in­crease in up­take of the prod­uct. Sales con­sul­tants in stores will of­ten rec­om­mend that clients who spend more than R15 000 or R20 000 on bikes make sure that they have in­sur­ance. Bi­cy­cles can be added on to house­hold in­sur­ance poli­cies, which Au­camp

Blaze of glory

Get­ting bikes from around the coun­try to Cape Town in time for the Ar­gus cy­cle race is known to be quite a task, but for some cy­clists headed to the race this year, it turned out to be a dis­as­ter. Hen­ning ex­plains that a truck loaded with bikes specif­i­cally to be trans­ported to Cape Town for the Ar­gus caught fire on route. The en­tire cargo was de­stroyed. Cy­clesure in­sured six of the bikes on that truck, and Hen­ning notes that all six cy­clists were able to re­place their bikes be­fore the Ar­gus and were able to ride in the race. Un­for­tu­nately, not all of the own­ers of burned bikes were that lucky. In another tran­sit to Ar­gus story, Hen­ning ex­plains that four cy­clists were trav­el­ling to the race to­gether, and the trailer opened on the road at high speed and all four bikes went tum­bling out onto the road. Two of those bikes were in­sured with Cy­clesure, and those rid­ers were able to re­place their bikes and ride the Ar­gus. Hen­ning notes that dur­ing the Ar­gus, Cy­clesure has agree­ments with nearby deal­ers to be on standby 24 hours a day for po­ten­tial claims. The same goes for other big races na­tion­ally, in­clud­ing the 94.7 chal­lenge in Jo­han­nes­burg, and the Amashova in KwaZulu- Natal. Cy­clesure also has agree­ments with cy­cle deal­ers in­ter­na­tion­ally and can ar­range for re­pairs or re­place­ments over­seas as well, if need be. notes is worth­while be­cause the ma­jor­ity of in­sur­ance re­lated quotes re­ceived by this cy­cling store are to re­place stolen bikes. “In the past, hav­ing bikes in­sured un­der house­hold poli­cies was not an ideal way to do things, but I think the in­sur­ance in­dus­try has be­come a lot more clued up on cy­cling, and they have stepped up to the plate. I have been very im­pressed,” says Au­camp. Most in­sur­ers, in­clud­ing the likes of San­tam, Mu­tual & Fed­eral, Mo­men­tum, Dis­cov­ery, Auto & Gen­eral and so on, will cover bi­cy­cles, but this would have to be along­side a home and con­tents pol­icy for ex­am­ple. Pre­vi­ously, dam­age sus­tained in events or in tran­sit were not cov­ered, how­ever this is fast chang­ing as in­sur­ance providers un­der­stand that with­out this they will not have a com­pet­i­tive prod­uct. Di­rect in­sur­ers in the space in­clude Out­surance and Te­lesure’s MiWay. It is worth­while to ad­vise clients to ad­e­quately ap­praise the bike, par­tic­u­larly if it has been mod­i­fied and up­graded be­cause of­ten in­sur­ers will limit the value of the bike to no more than R70 000. Au­camp notes that if is­sues arise dur­ing the claims process, they are most of­ten with di­rect in­sur­ers. “Gen­er­ally we find that if a bro­ker is han­dling the in­sur­ance, they fight the fight for the client, and will take it to the Ombud if need be.” Bro­kers will also know that cy­cle spe­cific in­sur­ance of­fers wider cover than gen­eral house­hold in­sur­ance. If claims from cy­cling oc­cur more of­ten, this can also neg­a­tively im­pact the client’s ra­tio, and have a bad in­flu­ence on the over­all house­hold pre­mium. While com­plaints against in­sur­ers seem to pre­vail no mat­ter what as­set is be­ing cov­ered, Au­camp also notes that a lot of the time, the prob­lem is that cy­clists try to make un­eth­i­cal re­quests and take ad­van­tage of in­sur­ers ei­ther by un­derin­sur­ing or ask­ing for in­flated quotes. “This is frus­trat­ing as a re­tailer, be­cause it is sim­ply un­eth­i­cal,” states Au­camp.

Cy­cle spe­cific

While gen­eral short- term in­sur­ers con­tinue to im­prove their of­fer­ings in this space, avid cy­clists, and bro­kers can­vassed by RISKSA, agree that cy­cle- spe­cific in­sur­ance par­tic­u­larly for cus­tom bikes is worth­while. It is an arena where in­sur­ers and bro­kers have lit­tle room for er­ror, be­cause this is a tech- savvy and well- ed­u­cated mar­ket, with ac­tive on­line com­mu­ni­ties mak­ing rec­om­men­da­tions, and post­ing warn­ings about brands and prod­ucts. Cy­clesure is the well es­tab­lished brand on the mar­ket, and will cover for events, in train­ing, theft or dam­age in tran­sit while at home or if stay­ing away from home at a guest house for ex­am­ple. The com­pany also pro­vides li­a­bil­ity

cover, in the event of a cy­clist caus­ing an ac­ci­dent, as well as spe­cial ac­ci­dent and death or dis­abil­ity cover. Cy­clesure also pro­vides trauma cover for cases of vi­o­lent theft or hi­jack­ing of bikes. There is also the Cy­clesure ER24 SweatSafe emer­gency med­i­cal pro­tec­tion ben­e­fit, which al­lows for emer­gency evac­u­a­tion, and med­i­cal ex­penses cov­er­age. The com­pany also pro­vides event li­a­bil­ity cover for race or­gan­is­ers. Cy­clesure is look­ing at ways to en­hance its prod­ucts, and prides it­self on its 24 hour claims turn­around once pa­per­work has been re­ceived. “Our ser­vice is what dif­fer­en­ti­ates us, we are all cy­clists, so we un­der­stand how im­por­tant it is to get back on the bike and not in­ter­rupt train­ing,” says Hen­ning. All Cy­clesure staff go on me­chan­ics cour­ses, so that they know ex­actly how to un­der­write prop­erly be­cause they un­der­stand how the bikes work, ex­actly what com­po­nents are im­por­tant and what they cost. This is also use­ful in the claims de­part­ment. A new­comer to the mar­ket is i- Cy­cle In­sur­ance, a prod­uct from UMA Pol­icy Provider, which is un­der­writ­ten by Gen­ric In­sur­ance. Op­er­a­tional for two years now, Pol­icy Provider MD Sean Botha, says that the growth over this pe­riod, al­beit off a small base, has been phe­nom­e­nal. He reit­er­ates that iCy­cle truly un­der­stands cy­cling, and builds this into poli­cies, for ex­am­ple, where sets and pairs may not be un­der­stood in reg­u­lar do­mes­tic in­sur­ance, leav­ing the client with two dif­fer­ent rims, be­cause they are only will­ing to re­place the one that is dam­aged. Botha notes that iCy­cle is also build­ing in a num­ber of prod­uct en­hance­ments such as a no claims cash­back bonus, and ex­cess buy­back, and, at this stage will cover bikes stolen with no signs of forcible en­try. The com­pany is also in dis­cus­sions to align the prod­uct with a med­i­cal aid well­ness pro­gramme, which could de­liver mu­tual ben­e­fits.

Crim­i­nal minds

Hen­ning says that there was a spike in vi­o­lent cy­cling re­lated crimes about six years ago. How­ever, in the last 18 months, these seem to be in­creas­ing again. The ex­pen­sive bikes are usu­ally taken out of the coun­try, to Mozam­bique or Zim­babwe, for ex­am­ple, be­cause us­ing them in South Africa would likely at­tract at­ten­tion, and no rep­utable cy­cle dealer would buy a stolen bike. De­spite the in­creas­ing cost of bikes, it is in­ter­est­ing to note that there is not much of an in­crease in use of track­ing de­vices on bi­cy­cles, largely be­cause the cost of re­cov­ery, and de­ploy­ing he­li­copters and so on to re­cover the bikes es would out­weigh the cost of the bike. The is­sue ssue of where to put a tracker on the bike, as well as the fact that if it is eas­ily e viewed, and could uld be eas­ily re­moved, also mean that this is not a very vi­able op­tion.

Tips for bro­kers

Ric­cardo Ster­min, ac­counts ex­ec­u­tive at Phoenix Phoen Risk So­lu­tions, which pro­motes in­sur­ance for cy­clists through Pedal­cy­cle In­sur­ance, says that it is worth­while go­ing with a cy­cle spe­cific in­sur­ance prod­uct, be­cause they un­der­stand the mar­ket. “Make sure your clients know about the re­stric­tions, so that they will know where they stand when it comes to claims. It is worth re­mind­ing them to make sure trans­port is ex­tra se­cure, and never leave the unat­tended bikes un­chained, that way there are no sur­prises at claims stage,” he con­cludes. As with most things, keep proof of pur­chase and get the bike ap­praised.

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