Commuting - Don’t Count on Your Homeowner’s Insurance to Replace Your Stolen Bikes

A few weeks ago, a work buddy, with whom I regularly ride, had three bikes stolen out of his garage early one morning (You have to love Memphis, TN. I topped him a couple of weeks ago by witnessing a drive-by shooting on my block as my kids played in the front yard). Of course, he filed a police report, knowing that they would not nor could not do anything to recover his bikes. Once he received the completed police report, he contacted his insurance company, in this case State Farm, to determine if he should file a claim. Here’s how the math came out:

Bikes’ Worth: $1495

Deductible: $500

Loss of “No Claims”
Discount x 3 Years: $1131

Net Insurance
Payout: -$136 dollars

Yep, that’s right. My friend would have to pay the insurance company $1631 over three years to buy replacement bikes worth $1495, netting my friend the loss of 3 bikes plus $136 to the insurance company. After rejecting their offer to file a claim and pay them more money while still having lost his bikes, he asked what kind of insurance should he have had to protect against the loss of the bikes. They stated that he could purchase Personal Insurance on any item in the house but that the value of the item would have to exceed $3000 in order to qualify.

Take-away Message: Your homeowner’s insurance does not cover your bikes. If you rely on your bike(s) as transportation as I do, lock it up in your home or garage to an immovable object just as you do on the street.

http://www.biketofeel.com/main-blog/2010/06/23/don%E2%80%99t-count-on-your-homeowner%E2%80%99s-insurance-to-replace-your-stolen-bikes/

Just a little reminder in case anyone thought that the insurance companies are there for any reason other than to make money off of you......

Just a little reminder in case anyone thought that the insurance companies are there for any reason other than to make money off of you......

Yeah, seriously.

Elvis stole it. :)



It is Elvis impersonation time of the year again in Memphis.

Sorry for your friend's hard time. Homeowner's insurance is pretty much designed to only be useful for a 5+figure claim. I've kept our deductible as high as I could get it (the broker tells me the bank holding our mortgage won't let us have a higher deductible than we do).

I had a low level MTB stolen from my garage a number of years back. Called State Farm to file a claim. Stated replacement cost of bike, accessories on it and a check was sent for entire amount less $250 deductible. The lady even told me to call back if I found out the prices I'd given were too low to cover replacement. Never saw an increase in premiums because of it.

This prompted me to call my insurance company, Allstate. It seems I am fully covered for the replacement cost of the bike less the deductible, which for me is currently $500. This coverage is personal property so it is valid for theft from my home, or at work or some other place. I hope I do not need to use it, and I could lower the deductible at the cost of increased premiums, but I think this is fine for me...

Just a little reminder in case anyone thought that the insurance companies are there for any reason other than to make money off of you......

Yep, just like 'Lost Wages' (Las Vegas). They're in business to take your money.

This prompted me to call my insurance company, Allstate. It seems I am fully covered for the replacement cost of the bike less the deductible, which for me is currently $500. This coverage is personal property so it is valid for theft from my home, or at work or some other place. I hope I do not need to use it, and I could lower the deductible at the cost of increased premiums, but I think this is fine for me...

I see the OP factored in one thing you may not have though. He appears to be losing a substantial existing premium discount as a result of the claim. Policy isn't going up, but the discount is lost, which is just as effective for an increase. And the insurance company can say "premuim won't rise" because in reality it isn't

Sucks really.

Take-away Message: Your homeowner’s insurance does not cover your bikes. If you rely on your bike(s) as transportation as I do, lock it up in your home or garage to an immovable object just as you do on the street



How did you reach this conclusion? It sounds to me like the insurance company was willing to pay the claim.

That buying insurance costs more than self-insuring... well, that's prettymuch common sense as well.

Being in the business I can tell you to schedule your bikes separately. That way your contents can have a $500 deductible but the scheduled bikes can be at $0. Disgruntled State Farm customers are my best friend. You can't believe how many I write every week for exactly what the OP said.

You need to understand that homeowners insurance is really just for losses that would wipe you out, like having the whole structure burn down. For this reason, I keep the maximum deductible possible because I know I would never file a claim on a loss of less than about $10,000.

Similarly, I drop collision and comprehensive on my cars once they reach a value of about $7000. In essence I am self-insuring for losses in this range.

The idea of filing a claim on a $1500 loss is ludicrous. Insurance policies designed to cover every little bad thing that ever happens would be prohibitively expensive.

The Insurance trap...YOUR IGNORANCE

Insurance should be considered catastrophic use only. Even health insurance. Under $500 should be paid out of pocket. Example: The demand for insurance to cover $50 and $70 visits for colds and minor issues is a major part of what drives the cost up and people just cant grasp the fact that when you take a rate plan to get $25 deductible/copay you are going to have higher premiums that are likely to exceed what it would cost for 10 minor visits a year at $50 each.

Home owners insurance is the same deal. There is a threshold where you need to just pay out of pocket or expect a raise in premiums that will exceed your short term pay out from the claim.

The Insurance trap...YOUR IGNORANCE

Insurance should be considered catastrophic use only. Even health insurance. Under $500 should be paid out of pocket. Example: The demand for insurance to cover $50 and $70 visits for colds and minor issues is a major part of what drives the cost up and people just cant grasp the fact that when you take a rate plan to get $25 deductible/copay you are going to have higher premiums that are likely to exceed what it would cost for 10 minor visits a year at $50 each.

Only 10 visits a year? You must not have kids! :)

Insurance should be considered catastrophic use only. Even health insurance. Under $500 should be paid out of pocket.

Actually, health insurance is the one that has paid claims both big and small for me. Maybe not all health insurance plans are equivalent, but if I was playing the first $500 out of pocket every time I'd be unnecessarily in a hole. The Big Picture for health insurance might be a mess, but as a healthy dude who's always paid in that's not MY fault.

Only 10 visits a year? You must not have kids! :)
Two and I have had a heart attack and have three stents. Insurance paid out nearly $100K on me in a 6 month period 6 years ago.
My whole family has been maybe 5 times in the last 12 months.
People go to the doctor too often. MRSA is a result of people going to the doctor too often and abusing antibiotics to the point that we have caused super bugs and infections. It circumvents our body's design to build immunity when we don't let colds and such run their course. Antibiotics need to be used when the body is failing to get rid of the problem on its own after that point.

My only trips to doctor office (not to see the actual doctor) in the last 3 years is flue shots, Blood tests because I am on statins and I am due for a physical. I am on group plan and I have no choice about the fact that I have a $25 copay. I would gladly take a lower premium amount to have a $70 copay. Unfortunately people are so hooked on that low copay they cant see the bigger picture that it cost them more in the long run in the cost of the premiums.

Yet when we have an issue like the bikes being stolen and somebody shows them the math it opens their eyes. The Health insurance is no different just MUCH more abused and people just don't do the math beyond "every time my kid has a runny nose I can go to the doctor for $25" and in the process weaken their immunity and cause more frequent illness that they run to the doctor for and do it all over again.

I get sick about once a year most years. It happens every spring. It is triggered by allergies. Lasts 3-4 days. I'm done with it. Nothing that the doctor is going to do is going to change the fact that I am going to be sick for 3-4 days. They are just going to prescribe drugs to hide the symptoms while my body takes care of the problem. I can buy OTC drugs that do the same thing. Why bother with the doctor?


but if I was playing the first $500 out of pocket every time I'd be unnecessarily in a hole. I am not saying that you should pay up to $500 each visit I am saying you should come out of pocket that much a year before the insurance starts paying at 80/20 up to say a $2500 max out of pocket. That would make a HUGE dent in the cost to everybody

Two and I have had a heart attack and have three stents. Insurance paid out nearly $100K on me in a 6 month period 6 years ago.[SNIP]
I get sick about once a year most years. It happens every spring. It is triggered by allergies. Lasts 3-4 days. I'm done with it. Nothing that the doctor is going to do is going to change the fact that I am going to be sick for 3-4 days. They are just going to prescribe drugs to hide the symptoms while my body takes care of the problem. I can buy OTC drugs that do the same thing. Why bother with the doctor?
Why didn't you follow your own medical advice and just let your body take care of your heart problem? Whatz up wit all those expensive stents? Maybe other people go to doctors because they need to.

My renter's insurance is awesome. Its through a company that our new complex has a deal with. We pay $12/mo. I called the company to ask about things like this, and our premiums won't rise and there aren't any hidden discounts or anything like that. We pay the $250 deductible, and they cover the rest.

Not that my bikes are worth much more than $250 to begin with...

About 18 yrs ago my daughter's $600 MTB was stolen from her workplace. My homeowners insurance paid $350, no hassle with no impact on premium.

State Farm is probably the worse large firm. Their coverage is awful and the example of how much it goes up (actually losing ths discount) is horrible. Take a look at Consumers Report for comparison among companies.

Once he received the completed police report, he contacted his insurance company, in this case State Farm, to determine if he should file a claim. Here’s how the math came out:

Bikes’ Worth: $1495

Net Insurance
Payout: -$136 dollars

You're in good hands with State Farm. :mad:

I learned long ago when I lived in Houston, keep the garage door down and leave nothing portable and valuable like a quality bike in the garage. My bikes live in the house.

I'd take the payment and switch insurers.

I would also take the payment and switch insurance companies. The Bs they are feeding you is a scare tactic. Take they money that is what you paid your money for. If they boost your rate switch.