Cycling enthusiasts everywhere are watching what might be the world’s most famous bicycling event – the Tour de France – this month. They are also watching some of the world’s most expensive bicycles, which often cost as much as a small vehicle.
Pro-cylists are not the only ones buying high-dollar cycles. The U.S. bicycle industry rang in sales of $6.2 billion in 2015 – bicycles, related parts and accessories – through all channels of distribution. The overall size of the industry has remained strong since 2003, with sales between $5.8 billion and $6.1 billion each year.
The growth in the cycling industry and a need to find specialized coverage for high-valued bikes, led to the creation of Velosurance, a national insurance agency founded by two cyclists to address the insurance needs of bicycle riders nationwide.
Dave Williams, co-founder of Velosurance and a mountain biking enthusiast, said after a homeowners insurance client suffered a less than satisfying claims experience with a bicycle theft, he knew something needed to change. “The straw that broke the camel’s back was a client whose $2,000 bike was stolen,” Williams said. “His homeowners insurance company paid the claim, but depreciated the value of the bike, and then took away his deductible, and sent him a check for $183.”
While frustrated with the loss, Williams’ client remained understanding until he received his homeowners insurance renewal policy – $400 higher than the previous year, thanks to the claim.
“We started thinking that maybe there was some coverage out there that would work better, but there really wasn’t,” he said. That’s when Williams reached out to Markel.
“Markel liked the idea of creating a specialty product for bicycles and ran with it,” he said. “We started issuing policies in November 2012 and have been growing every year.”
Now, “all we do is sell bicycle insurance,” he said.
Most business comes directly from consumers but Velosurance also partners with about 2,000 bicycle shops nationwide. The product is licensed in all states except, Hawaii, N.D., S.D. and W. Va.
Williams said there’s “often a misconception about coverage” and owners of high-end bikes often do not understand what they have.
For example, a bike can be scheduled on a homeowners policy but it’s typically actual cash value coverage and will not cover the bike for everything that can happen to it. “Often that coverage costs more than what it would cost through Velosurance.”
The Velosurance policy provides broader coverage including while in transit by airline and other shipping companies, or when carried in or on a car. Also, while covering the bike for theft and accidental damage, the policy extends coverage to cycling apparel, spare parts and accessories – such as a racing wheelset or a bike computer – and provides race fee and rental bike expense reimbursement for those situations where the bike is lost or damaged before an event. Medical coverage is also an option.
It’s not just for high value bikes. “We have $300, $400, $500-bike owners who own policies. The minimum premium is $100 and the minimum deductible is $100.”
Williams welcomes referrals from other independent agents. “Because all we insure are bicycles we are not a threat to an independent agent. If there is an agent who has a client that has high value bikes they can send them over to us knowing that we are not going to prospect their client.”
For more information visit www.velosurance.com.
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