“The repair estimate for your client’s bicycle is for more than the value of my car.”
Insurance Adjusters have said this to me while I’m attempting to settle bicycle property damage claims – due to their insured’s negligence. Adjusters are skeptical of claims for expensive bicycles.
Adjusters don’t want to overpay. Their files are audited and they must justify a decision to settle. So, here are four tips to maximize your property damage settlement.
Tip 1: The general rule is that you’re entitled to reasonable compensation for damage to your bike and clothes, i.e. the difference in the fair market value of the bike immediately before and after the accident.
This formula is used when your bike is “totaled”. Have an experienced mechanic estimate if it’s cost effective to repair the damaged bike or total it out. Photograph the damage to support your claim.
I recently had a bike mechanic use a tool to show the degree the frame was bent. I photographed the measuring tool next to the bent frame to prove the loss.
Now, compare the photos of your prized bike just before the crash. Pull up e-bay prices for similar bikes to prove the reasonable market value before the crash (Your purchase receipt helps set a watermark in negotiations.)
This is a reasonable method to validate your claim.
Tip 2: Say your bike isn’t totaled. The law allows you to “repair” the bike, so it’s restored to the fair market value as it existed immediately before the accident. This includes the cost of parts and making the repairs, i.e. labor.
Here, you’re usually fixing potato chipped wheels, bent handle bars or paint damages, as opposed to frame damage.
Tip 3: You can also recover the “depreciation” in value of a damaged bike. However, if the cost of repair is less than the depreciated amount, you may only recover the lesser sum – the repairs.
For example, if you’re unable to restore your classic Masi or Colnago bike without using genuine parts or paint without suffering a big drop in value, then recovering the depreciated amount is proper because it’s less than deeming it a total loss. To economically bring the bike back to it’s pre-crash condition, this may require you to ship your bike to the factory to paint or straighten the frame. Totaling the bike would be wasteful, and a quick fix with after market products won’t restore the value to the condition immediately before the crash. Thus, it makes sense to factor in depreciation when calculating your damages so you are made whole.
Tip 4: While your bike is being repaired you’ve lost the “use” of it. This loss is compensable during the time “reasonably necessary” to repair the damage caused by the accident. Insurance adjusters may fight you on this “head of damages”. They’re accustomed to paying for the loss of use of a car, but not a bike. So, analogize your loss of use to paying for a Enterprise rental car; there’s not much difference.
In case you have a race, you can rent a comparable bike. Most shops rent bikes. Just make sure you’re diligent in mitigating your losses. Keep a log of when you’ve notified the insurance company by phone (followed up by an e-mail or fax) of your reasonable losses. This starts the clock ticking for loss of use since they now have notice to either pay for the totaled bike or the repairs without delay…. or suffer the “loss of use” cost to rent a comparable bike. Then, factor in your “loss of use” costs into your total property damage settlement negotiations.
There you have it, four tips to get back on the road when your bicycle is damaged. Ride Safe – Ride Strong!