Few bike policies good for new bikes

[Whealie]

Insurance policy wording comparison firm Defaqto says only about half of bike insurance policies will automatically replace a brand new vehicle if substantially damaged. This compares with 92% of car polices, suggesting bike insurance is an inferior product to car insurance.

And most policies that do buy new bikes, only replace a bike less than six months old compared with a full year for most car policies. And car policies would replace a vehicle if the cost of repair was 50%, or more commonly 60%, of the new price. For bike insurance this is 60% or 70%.

Defaqto’s analysis found:

• 48% of bike policies do not include 'new bike replacement cover'
• 8% of car policies did not include 'new car replacement cover'

Of those that do provide a new vehicle:

• 8% of bike policies apply a 60% cost of repair threshold
• 92% of bike policies apply a 70% cost of repair threshold
• 10% of car policies apply a 50% cost of repair threshold
• 82% of car policies apply a 60% cost of repair threshold
• Only one bike insurer (8%) KGM, provides 'new bike replacement' cover for bike less than 1 year old
• 92% provide cover for bikes less than 6 months old
• Two insurers (1%) NFU Mutual and Saga, provide 'new car replacement' cover for cars less than 2 years old
• 99% provide cover for cars less than 1 year old

Defaqto warned that even policies that do offer brand new bikes may not pay out of the bike was pre-registered by the dealer or start the six month clock ticking at the date it was pre-registered not the date it was bought.

Michael Powell, insight analyst for general insurance said: “We have analysed 25 motorcycle products on which these calculation has been based. The message to consumers is check the policy wording to confirm the conditions on which cover for 'new bike replacement' is provided.”

Compare like with like
The key here is that when buying bike insurance, going for the cheapest is rarely the best option. As you are not comparing like with like. Cheap insurance is almost always inferior insurance, with more exclusions, higher excesses and restrictive and slower claims handling.

The best bet is to use an insurance broker. The specialist biker brokers are going to have the best range of policies available. Use one.

Links (new windows)
Defaqto

[Austin]

"Only one bike insurer (8%)" that means only 12 insurance policies were compared. That means either there isn't enough competition in the Market to drive out differentiation and provide proper choice to the consumer or the survey is invalid.
The bullet that "2 insurers (1%) " means that there were around 200 car policies included.

I ret my case - not enough competition to drive out value.

[Whealie]

25 polices covered, of which 52% - read 13 - did provide this cover. Of those 13 only 1 firm (technically 7.69%, rounded up to 8%).

Of the entire 25, of course, that one firm represents 4%.

25 firms offering bike insurance is a significant market for what is a niche insurance product.

If you were a business buying trade credit insurance you'd dream of having 25 insurers you could buy from.