BY LINDA BAKER
Last month I wrote a story about BikeTrak, a Portland startup working on anti-theft device for cyclists — a kind of LoJack for cars. Now, within six months of each other, two separate companies have decided to roll out another car-bike crossover product: bike insurance, or “auto insurance for bikes,” as Craig Dawson puts it.
Dawson is the owner of Laguna Beach-based Sports Insurance Solutions, a company that launched its “Spoke Bicycle Insurance” product this past February. Spoke is available for purchase by individual cyclists and is currently available in eight states, including Oregon.
On July 1, Portland’s Gales Creek Insurance, a division of JD Fulwiler, will unveil “Bikeon,” a product that initially will be available only through the Better World Club, a roadside assistance and auto club that also provides services for cyclists.
Bikeon is a “mission of love” for Gales Creek executive vice president, Jeff Lang, a longtime bike commuter who has been working on the project for 14 years — ever since his good friend Rex Burkholder, a Metro Councilor and cofounder of the Bicycle Transportation Alliance returned from a trip to Holland and showed Lang an individual bike insurance policy he had translated from the Dutch.
Asked Burkholder: “Why don’t we have this in the U.S?"
I asked Lang a different question: Why do we need bike insurance in the U.S? If I’m in a crash, God forbid, my health insurance will cover my hospital bills. If my bike gets stolen, my homeowner’s policy will cover (some) of the replacement cost.
Not so fast, says Lang. First, about half of all cyclists who commute to work don’t have a homeowner’s policy. For the other half, high deductibles and depreciation mean that few will end up recouping the cost of a bike if it's stolen. As for health insurance — well, enough said. Millions of Americans just don’t have it.
Bikeon is comprised of three elements, including a packaged insurance policy that will provide liability in case of an accident or property damage and accident insurance for those who get hit by an uninsured motorist or who don’t have health insurance. The latter is Lang’s real mission of love: Every week around the country, there are cyclists who end up the emergency room. "Some are at fault" he says. "Some are not at fault.” Either way, most will incur enormous medical bills.
“It’s for those people we’ve been working so hard to get this product to market.”
Bikeon's third piece is property damage, which provides replacement coverage should the bike incur damage or get stolen.
How much does all this cost?
When Bikeon launches next month, it will be available only through the Better World Club. The latter will offer the accident and liability piece as part of its regular bike roadside assistant membership fee. Members who want to purchase property coverage can elect to pay extra, says Megan Emerson, the Better World Club’s publication manager.
Lang is currently in coversation with other membership-based cycling groups such as the Bicycle Transportation Alliance and the League of California Cyclists about offering Bikeon. He says his overarching goal was to create an affordable insurance product for cyclists, and that rolling out individual insurance product proved to be too costly at this (early) stage in the game. But if you break down the charges, Bikeon costs about $12 per year for the liability and the accident insurance, a cost that Better World Club appears to be absorbing, at least in the roll out phase. The property piece starts at $35 a year and goes up in increments of $10 for each additional thousand dollars of value.
An individual insurance product, Spoke is significantly more expensive. Dawson says the cheapest policy costs about $25 per month for bikes valued up to $2,500. That includes theft, damage and liability. “I’d love to say insurance was going to cost everyone $30 a year, but that’s just not going to happen,” Dawson says.
Anybody who buys insurance knows that the devil is in the details, caveat emptor, etc. There are significant differences between the Spoke and Bikeon products. But the bigger takeaway is the same.
Today, fewer people are buying homes and fewer people are buying cars. More people are riding bikes. Bikes, like cars, can get stolen or damaged, or cause damage. Cyclists, like drivers, can get hurt and need to go to the hospital. They can sue or be sued.
The United States is still a far cry from Holland, but transportation and housing trends are changing, and the insurance industry, apparently, has responded.
Linda Baker is managing editor of Oregon Business.