shakedz

Hi,
First its very important to say I am not willing to promote the app here, therefore - please don't ask me for its name.
I would like to consult with you about an on demand bike insurance app we're launching.
They app is going to be very simple - you click to turn insurance cover on, click to turn insurance cover off.
We're thinking what would be the right price for our service - we were thinking 1$ per hour and maximum of 15$ monthly (if a customer reaches 15 hours he get free insurance until the end of the month).

1. Do you believe this is a fair pricing?
2. Would you personally use such on demand hourly insurance service?

Thank you!

TimothyH

What type of insurance?

Coverage for damage to my bike from crash?
Coverage for theft of my bike?
Coverage for personal injury?
Coverage for repairs?
Liability for other's property or injury?
Is there a decuctable?
What if there is a crash and I am found to be at fault?

We can't know a fair price unless we know what product you are selling.


-Tim-

Seattle Forrest

What Tim said.

shakedz

You are correct, I apologize.
Cover is worldwide for: Transit cover, Damage cover, Malicious damage, Custom parts damage, Personal accident cover, Third party bodily injury, Third party property damage cover.

fault doesn't matter, you will be covered anyway (as long as theres good faith of course).

Yes, there will be deductible amount not yet decided, probably 100$.

Seattle Forrest

What do you mean "as long as there's good faith?"

If my bike is damaged, what is the claims process like? Will you pay to replace the bike or for a repair? How long will it take?

shakedz

Good faith basically means that the bike were used reasonably, no one took them and used them as a hammer to put a nail in a wall or anything like that.
We will pay for repair when its enough (replacing parts etc) and to replace when necessary. We would like to make sure the process to be as easy and fast as possible of course. I can't guarantee right now to a certain time frame.

thin_concrete

Why would I pay for this over a separate rider I have on my homeowner's policy?

caloso

Does it cover racing?

TimothyH

Good questions above re racing and homeowner's overlap. To this I would add mountain biking which can sometimes be extreme.

Also "Personal accident" needs clarification. If this is personal injury protection (PIP) then I am covered under my private health insurance policy to a certain extent.

To answer the questions, I might consider using something similar to an auto "comprehensive" policy for a long trip far away from home. I'd pay 15$ to cover a very expensive bike against theft and damage if I were going from the US to cycle around Europe or South America for two weeks for example. This would have to be balanced against any insurance provided by a shipper such as bikeflights, liability assumed by a hotel which might provide storage for the bike, manufacturers crash replacement guarantee, etc. I would not pay $1/hour.

The third party property/injury sounds interesting. If we are talking about actual injury and property liability insurance then I'm not sure how important this is compared to automobile insurance - I'm not going to accidentally cause a chain reaction pile up on the interstate or take out telephone pole. It is interesting nonethless but I'm not sure that liability insurance can really be justified. A scenario where it would be used by a cyclist seems rare. Maybe Lucas Brunelle and his comrades would like this.

It would certainly be a case where the OP would have to do some old fashioned selling, convince me why it this is all needed.


-Tim-

02Giant 

Me thinks this has not been thoroughly thought through. I could be wrong, just basing off of the initial impression.

indyfabz

You're not wrong. Just look at the OP's last post. "I might consider...." Any maximum coverage limits? And deductible not yet decided? How could one begin to evaluate value without such crucial information?


Here is something else off the top of my head for the OP to consider: How would prevent against some types of fraud? Let's say I use the app one day and ride without incident. The next day I go for a ride without turning on the app, crash and damage my bike. Since I am such a slime ball and a cheapskate like many here on BF (, I claim the accident happened the day before, when I had the app on. Make it a condition of the policy that I report an accident the same day? O.k. What if I don't turn on the app, crash during a ride, turn the app on and claim the crash happened after I turned on the app?


Finally, have you looked into whether you would need to be licensed in every state where you offer this insurance?

02Giant 

Their idea hasn't been vetted by an Underwriter.

Leebo

Seems stupid. I need to know which hour my bike will be rear ended when on the back of my car, stolen or crashed? Coverage needs to be 24/7.

indyfabz

Eloquent in its brevity.

SugarMonkey

This seems like a take off of an ad I saw on Facebook for only having insurance for your car while it is actually being used. The ads show "paying/not paying" by having a car in drive and a car in park. And I'm not entirely sure that's even legal. I know my car has to have full coverage even just because it's not paid off yet as part of the finance company's rules.

I also feel like the OP's username looks like "shake down", but that's neither here nor there.

Seattle Forrest

The devil is always in the details.

What your customers are going to want to know before they hand their $15 over to you is: when they need their bike fixed or replaced, will you say no because whatever happened was "anything like that?"

Maelochs

While i don't think the OP is anywhere near actually offering a product, the basic Idea makes sense----if I can insure my bike very cheaply just for when I ride, .... but ... it would have to be really good insurance, much better than an insurance rider which also might cost about $200 per year or less.

It is up to the seller to prevent fraud ... i am sure there could be some simple requirement to use a GPS function so that the insurer knows where the bike was at any time the insurance was activated. Whatever .... not my problem.

I'd have to weight things like, how much deductible vs. annual cost, how much damage do I actually do /have happen to my bikes in any given year .... (usually only consumables .... but if I start riding my MTB a lot ... )

Also, the bike I'd be most interested in insuring is my Workswell ... how are they going to value that? How are they going to value the time I sdpent researching, finding partsat a good price, and how are they going to value the time and effort of assembly?

The other big issue I have with all insurance is that they never pay what the vehicle is worth. I am sure we all know the stories or have lived them .... someone has a great old car in great shape, low mileage super reliable .... but when it gets wrecked they use their depreciation tables to prove that this car was worth some pittance so minor you couldn't even buy a Wal-Mart bike to replace it.

I have been there---trying to explain that Any reliable, well-maintained car, no matter how old, is worth a given amount of money Just Because it Runs ... while the insurance company is willing to pay about enough to replace two tires. Really? A Reliable Running car is worth $400? of course you can't even buy a barely running car for that ... and this is after having paid thousands and thousands for "insurance coverage."

Sio ... i can see paying $200 per year for this insurance, then some guy steals my 2014 Dawes or 1983 Cannondale from in front of a store ... and after they work their magic, the value of the Dawes is about $125 .... the Cannondale is about $65 ... less my deductible, I get Zero on that bike, even though the bike is solid, strong, a great reliable daily rider which I have rebuilt and maintain constantly.

Of course, they will offer "specialized" coverage for C&V ... which means I pay even more insurance, and still don't get more than a fraction of the value of the bike back ... so they make out even better. The Dawes? Forget the new drive train, stem, seat post, seat, rack, lights, wheels, saddle bag, tools, refinish .... Blue Book says it excellent shape it is a $100 bike, which just happens to be the deductible.

I am pretty sure there is no way for an insurance company to survive unless it is a scam playing on people's fears and knowing up front it will never pay what anything is worth ---- the profit margin would be too low.

jefnvk

I'm not sold on the turn/turn off feature. For a max of $15 a month, why wouldn't I just want it on all the time? Seems like a great way for me to forget to turn it on before a ride, have my bike stolen then, and have the insurance be completely pointless.

Also, why would I pay the same rate on my $27 Schwinn as someone else would on a $12k CF wonderbike?

Milton Keynes

I've never heard of any insurance being used by the hour, at whatever time the insured chooses. Makes far more sense to insure 24/7 against loss or theft, just like an automobile.

kevindsingleton 

How would the insurer even know I own the bike for which I'm filing a claim? I'll be happy to send pictures, of course. Ignore the bike shop in the background, and the tags hanging from the handlebars. I did actually buy that bike; it's not just a test ride!

jorglueke

I don't know about other States but I'm covered by my auto insurance for accident related coverage on the road. Of course not everyone has a car. As someone else has mentions theft is or can be added to a homeowners policy though renters wouldn't often have that. Kind of like the guy asking about documentaries, I would start more focused with a specific niche and then work up from that.

You need a lot of cash to legally start an insurance business though, you have to have reserves to cover any potential claims. It's not something you can launch for $1000.

Ajkollme

I don't really understand the hourly concept. Most avid cyclists who have a bike worth insuring are probably riding more than 15 hours / month and would just elect to have 24/7 coverage, especially as theft usually happens when you are not with the bike.


How will you ensure that people don't just turn on coverage when the bike is stolen? No way to prove when exactly the bike was stolen.


Also, $15/month is too high.

I-Like-To-Bike

Hospice patients would buy a lot of term life insurance with such an on-demand insurance scheme.

AlexCyclistRoch

Sounds like a really stupid idea. I hope you haven't invested too much time or money in this hare-brained scheme.

Sangetsu

In Japan I have bicycle insurance through AU, which is a cellphone service provider. The policy is for personal injury and liability, it costs about $30 per year. Theft would be covered by my household insurance.