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How To Insure Your E-Bike

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    #16
    Interesting that this comes up. I'm an insurance agent myself, licensed in I think 46 U.S. states and transacting business in the collector/exotic automobile world. I do a lot of work on the regulatory side of the business, working with the various states in what are known as 'filings' which are the documents that, once approved by a state's regulatory authority, allow us to do business there in the manner they have allowed.

    So, at some point I wound up looking very carefully at Markel and their managing agent, Velosurance. I went so far as to gather up a specimen of the policy and to read all of their underwriting rules. One of the things I was most concerned about was their value basis on their policy. Frankly I could have sworn the policy I originally read was a Stated Value policy (which means the value you state determines the premium you pay and has no bearing on the amount you will be paid in the event of a loss). But the specimen I read today was Actual Cash Value (ACV)-based. Frankly my memory could be off and thats what I saw before. Either way, since you are stating a value as the basis for your premium, and the policy is openly ACV, meaning the company's adjuster decides how much your bike is worth after the loss, it is effectively a Stated Value policy; with depreciation being a typical part of the valuation.

    So after I read the policy, I got on the phone with Velosurance and spoke to one of their senior guys. We had a long and detailed discussion and frankly, despite what I noted above I would be comfortable doing business with them as a consumer.

    Essentially, they are not getting into detailed depreciation schedules etc. These bikes are by and large small potatoes insofar as individual physical damage losses are concerned and generally if the company / agent accepts the value in the first place thats the loss amount they will pay. As someone who contracts for 3rd party claims administration services I know this is actually good business as its a low-dollar expenditure. The alternative is to pay an expensive licensed adjuster to do a workup and then keep legal on staff to write nastygrams back and forth if a dispute gets ugly.

    Its cheaper to pay claims promptly, have happy customers -- and do your homework on the front end, not letting in any losers in the first place. commuter ebikes believe it or not this is the sort of business practice you see with smaller specialty carriers where reputation and happy customers talking over the web mean the world to your business model. To the geckos of the world not so much perhaps. But the 'boutique' companies are a different ball game.

    A couple more details on this policy:
    - If its stolen, it has to have been locked up to something substantial with a locking device or there's no coverage.
    - The only thing the company is presently looking at is the rating on the motor. They are not doing the math on the volts and amps. No they are not stupid they know how ebikes work.
    - The bike must conform to the *federal* standard. That means 750w and 20 mph throttle-only.

    In my case, I did not do business with them. Partly because I am a licensed insurance agent and while it is unlikely, I could lose my licenses for pretending my bike is within the CPSC rules and then filing an insurance claim, where such compliance is a prerequisite for coverage. As an ordinary citizen who isn't regulated like I am, you are probably in much better shape. But a HD with a Ludi controller sold as an off-road-only vehicle DOES leave the claims department with a big out if you somehow manage to make some enormous screwup that is going to initiate a big liability claim. Thats not on the insurance company if you fib to get in the door and get caught.
    Last edited by MoneyPit; 1 week ago.

    Comment


      #17
      So I have a question about the "off Road" portion and motor size....So what's the difference between insuring said type ebike and say ATV insurance? Or will it be just one of those things that even if you do get it insured like that if its involved in an incident on the road it would not be covered because its not "off road"?

      Comment


      • MoneyPit
        MoneyPit commented
        Editing a comment
        You would have to actually compare the two policies to get a truly straight answer. However, wouldn't an ATV policy a) specifically exclude coverage while riding on the road and b) be physical damage only and provide no Liability coverage? the fact that Velosurance provides liability while running down the road is kind of a big deal. For example you hit a pedestrian.

      • pure_mahem
        pure_mahem commented
        Editing a comment
        I think its all going to be a grey area until states recognize ebikes as a vehicle class. Unfortunately for all of us that going to bring about more bureaucracy, regulations and limitations.

      • MoneyPit
        MoneyPit commented
        Editing a comment
        I think that has pretty much already happened, although not everywhere. For every state with the 3-class system that is the case for sure. Others do as well> I've read a bunch of states' vehicle codes with respect to ebikes and they usually have a place to fit, even though they may be still regulated as if they were 'motorized' by an ICE.

      #18
      Originally posted by MoneyPit View Post
      Interesting that this comes up. I'm an insurance agent myself, licensed in I think 46 U.S. states and transacting business in the collector/exotic automobile world. I do a lot of work on the regulatory side of the business, working with the various states in what are known as 'filings' which are the documents that, once approved by a state's regulatory authority, allow us to do business there in the manner they have allowed.

      So, at some point I wound up looking very carefully at Markel and their managing agent, Velosurance. I went so far as to gather up a specimen of the policy and to read all of their underwriting rules. One of the things I was most concerned about was their value basis on their policy. Frankly I could have sworn the policy I originally read was a Stated Value policy (which means the value you state determines the premium you pay and has no bearing on the amount you will be paid in the event of a loss). But the specimen I read today was Actual Cash Value (ACV)-based. Frankly my memory could be off and thats what I saw before. Either way, since you are stating a value as the basis for your premium, and the policy is openly ACV, meaning the company's adjuster decides how much your bike is worth after the loss, it is effectively a Stated Value policy; with depreciation being a typical part of the valuation.

      So after I read the policy, I got on the phone with Velosurance and spoke to one of their senior guys. We had a long and detailed discussion and frankly, despite what I noted above I would be comfortable doing business with them as a consumer.

      Essentially, they are not getting into detailed depreciation schedules etc. These bikes are by and large small potatoes insofar as individual physical damage losses are concerned and generally if the company / agent accepts the value in the first place thats the loss amount they will pay. As someone who contracts for 3rd party claims administration services I know this is actually good business as its a low-dollar expenditure. The alternative is to pay an expensive licensed adjuster to do a workup and then keep legal on staff to write nastygrams back and forth if a dispute gets ugly.

      Its cheaper to pay claims promptly, have happy customers -- and do your homework on the front end, not letting in any losers in the first place. commuter ebikes believe it or not this is the sort of business practice you see with smaller specialty carriers where reputation and happy customers talking over the web mean the world to your business model. To the geckos of the world not so much perhaps. But the 'boutique' companies are a different ball game.

      A couple more details on this policy:
      - If its stolen, it has to have been locked up to something substantial with a locking device or there's no coverage.
      - The only thing the company is presently looking at is the rating on the motor. They are not doing the math on the volts and amps. No they are not stupid they know how ebikes work.
      - The bike must conform to the *federal* standard. That means 750w and 20 mph throttle-only.

      In my case, I did not do business with them. Partly because I am a licensed insurance agent and while it is unlikely, I could lose my licenses for pretending my bike is within the CPSC rules and then filing an insurance claim, where such compliance is a prerequisite for coverage. As an ordinary citizen who isn't regulated like I am, you are probably in much better shape. But a HD with a Ludi controller sold as an off-road-only vehicle DOES leave the claims department with a big out if you somehow manage to make some enormous screwup that is going to initiate a big liability claim. Thats not on the insurance company if you fib to get in the door and get caught.
      That is an insightful interpretation, thank you for helping to make this clearer. All of it, but the bolded, especially, IMO. Emphasis mine.

      I'm no insurance expert, but this makes sense to me. When we buy insurance, we buy a very specific set of protection. Assuming coverage exists, for things not actually covered, is a very common mistake, from the claims experiences I've seen. Burned homes and such, family/friends. That's where the gaps perceived by policyholders seem to show up, after losses occur, I think.

      This is one reason I like to have a local Insurance Agent I can ask, who checks such details for me, rather than potentially cheaper but less-well supported 'online insurance'. I feel he looks out for me, being a paid agent, and in the past he's recommended some smart changes I didn't catch on my own.

      Thanks for doing a bit of that kind of thing, for all of us.
      Fabrication is fun! Build something today. Show someone. Let them help. Inspire and share. Spread the desire.

      Comment


      • MoneyPit
        MoneyPit commented
        Editing a comment
        You bet. Another good reason to have an INDEPENDENT insurance agent is this: An agent has a fiduciary responsibility to give you proper, expert advice and also to look out for your interests, not the interests of the insurance company. s/he is YOUR agent and not a company employee. If an agent screws up and/or gives bad advice, which you act upon to your subsequent detriment, then they are often liable to you for damages under their Errors & Omissions policy. E&O is to insurance agents what 'malpractice' is to doctors, to put it in a more commonly understood term.

        Notice I said 'independent' all in caps above. If you do business with a 'direct writer' like say GEICO or Progressive, you have vastly less protection. Same with some companies who use 'agents' but the agent is in fact representing just the one company (i.e. Sate Farm or Farmers)... the multiple companies thing is where the 'independent' comes in. You want an agent who has a legally binding obligation to put your interests first and that is never going to happen when dealing with a company employee.

        Plus, you want the added fallback of that E&O policy in case you get hosed.
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