If you insure your bike for less than the new replacement cost then this means that you're not paying your fair share to the collective and so we may have to reduce the value of your claim. This is called underinsurance.

(see our article on how to select the insured value of your bike or accessories here)

If you’ve underinsured your gear we’ll have to reduce the value of your claim in line with the difference between the sum insured you have chosen and the new replacement value of the item of your insured gear at the time of your claim. That way we make sure that no cyclist in the collective can benefit unfairly.

Example 1 - Theft Claim

Say your bike is insured with Laka for £2,000 but that model is only available to buy today for £4,000.

If your bike were to get stolen, then the collective would only ever pay out up to £2,000.

This means that your replacement bike would not be the same model as the one that was stolen. We would replace your bike with the closest available equivalent at a cost of no more than £2,000.

Example 2 - Damage Claim

Say your bike is insured with Laka for £2,000 but that model is only available to buy today for £4,000.

If you were to have a crash in which you damaged your top-spec race wheels and they were going to cost £1,000 to replace, the collective would only pay out up to £500.

How we calculate what the collective will pay

Here's how we work out what the collective will pay when there is a case of underinsurance;

(actual insured value / true replacement cost) x loss = max amount the collective will pay

As always, if you need help, contact us.