Ringing a bell for bike insurance


Why is it that Lycraman riders on racing bikes don’t have cycle bells? Instead, they shout to warn other road users of their imminent presence.

I can understand that champions like Bradley Wiggins want to shave every gramme off their machines to reduce weight. But, fast though they are by my slouchy standards, most of the riders I see tearing around north London are not in the Tour de France category.

Bell critics say that “a polite shout” is better than a ring because pedestrians resent having to jump at the sound of a bell. This may be true on quiet country lanes. But it hardly applies on busy city streets, especially with the explosion in cycling triggered by the pandemic.

The law is a bit of a mess. Bikes must be sold with bells but may be ridden without. The Highway Code, currently under revision, says in both its old and proposed new version: “It is recommended that a bell be fitted.” 

I am not arguing for the UK to follow the Netherlands — where more of the population cycles than anywhere else — in making bells compulsory. The police already have too much to do.

But with more cyclists taking to the roads than in any period since the early 1980s, it is time perhaps for a publicity campaign for riders to take action themselves.

Admittedly, cyclists cause very few serious accidents, being responsible for just one or two out of about 1,800 road deaths annually. But more bells could help reduce near misses, cut down arguments and improve the sometimes fraught relations between riders and other road users.

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Even more important, in its way, is promoting bicycle insurance. While the Cycle to Work scheme to boost bike commuting through tax breaks is a seen as a success, too little has been done about insurance.

Nobody even knows how many of the estimated 4.5m Britons who cycle at least once a week are insured for theft, or for legal claims arising from accidents. While a bike is not a four-by-four, even a minor car door scrape can be expensive to fix.

Specialist cycle insurers are ready to help but are generally small. The sector is dominated by the big general insurance companies through their home and contents policies. These only cover around two-thirds of UK households, omitting most cyclists living in the other third.

Also, insurers’ terms vary. Some cover bikes only when they are home, and then only if they are securely locked, even in a garage. More generous policies cover bike thefts wherever they take place, but these often cost more.

Cyclist policyholders should read the fine print. For example, so-called third party liability cover — insurance which offers protection in the event of legal claims from other people — is sometimes limited to accidents around the house and sometimes not. 

Also, policyholders are usually required to pay an excess — in many budget policies this can be £500, a big amount in relation to the £400-£700 typical cost of a new bike.

At this point, I must declare an interest and say that I had my bike stolen from a locked garage at home this month. Axa, my insurer, dealt with the loss in a breathtakingly hassle-free way.

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However, the experience is not always so painless. Tobias Taupitz, a former insurance executive and founder of Laka Bicycle Insurance, a specialist provider, says. “Many people think they have been failed by insurers. They have a £750 bike stolen and find there is an £800 excess. They feel angry. They have paid a premium and think they have not got much in return.”

Mr Taupitz’s answer is a new form of bike insurance in which customers pay a variable monthly premium determined by the claims previously paid out to all clients, who currently number 7,000. This encourages riders to take more care, keep claims down and reduce everybody’s premium, he says. “They think they are looking after their own and other cyclists’ money, and not the insurer’s profits.”

But before cyclists even consider the likes of Laka or other specialists such as Cycleguard or PedalSure, they have to accept that they need insurance. This is the nub of the problem, especially for people without home insurance, who tend to be on lower incomes and therefore more likely to be hit hard by a loss. Steve Garidis, executive director of the Bicycle Association, the industry trade body, says: “Bicycle shops usually don’t offer insurance. They don’t want to spoil the experience of buying a bike by talking about something bad like theft. So cyclists just don’t think of it as something they need.”

The industry is adamantly against mandatory bike insurance. With good reason. As bikes are not compulsorily registered in Britain, cycle insurance would be much harder to enforce than motor insurance, which causes the police many headaches.

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But if compulsion is ruled out, the current voluntary approach needs to be seriously reinforced — and quickly, given the pandemic-linked surge in bike thefts.

First, insurers could do more to reach cyclists not covered by household insurance, often young people, frequently living in rented accommodation. Why not expand what is offered through retail websites? For example, the household insurance services arms of Sainsbury’s, Marks and Spencer and John Lewis all include specialist insurance for pets? Why not bikes?

Next, bike retailers need to be more involved. If they can sell helmets and locks, they can diversify into insurance. The regulatory hurdles in selling financial services cannot be insurmountable if supermarkets can offer pet protection.

As a quick start, the trade should do more to encourage buyers to list new bikes immediately on the police-backed national BikeRegister scheme, which makes stolen cycles easier to trace. Cyclists who think about registering may be more likely to consider insurance.

Finally, the government could offer a modest incentive. A temporary VAT cut on new bikes for those buying insurance could be added to the pandemic response package. It might sound arbitrary, but so was the Eat Out to Help Out discount scheme. And cycling would do more than trips to McDonald’s to encourage healthier lifestyles, a key policy goal.

Stefan Wagstyl is editor of FT Money. Email: stefan.wagstyl@ft.com. Twitter: @stefanwagstyl





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