Cycle to work bike stolen, insurance wont pay

mariat

My son bought a £500 bike through the cycle to work scheme, and the payments have just started to be taken from his bank account. Problem is, the bike was stolen last week, and although he made sure to include his bike in with his house insurance, his insurers are now saying they wont pay out on hire purchase agreements. He will still have to complete the bike's payments regardless of the fact that it has been stolen, so why won't the insurance company pay up? Is there anything he can do about this?

InsideInsurance

1) Ask the insurers for where in the policy HP is excluded, he is liable for it even if not legally the owner

2) Check the terms of the bike scheme to see if it is HP or not

mariat

Thanks for the advice. I have passed it onto my son, and he'll do as you advised.

Oli.s

It's unlikely to be HP, mine certainly isn't.

My employer made it clear that they bought the bike and then rented it to me. They retained legal ownership of it and 'may choose to sell it to me for a reasonable market value at the end of the scheme' which is invariably a nominal amount.

They were very careful to make it clear that there is no automatic right for me to buy it to avoid it being deemed to be hp.

It was termed hire credit, not hire purchase.

Here is a link to the gov guidance, it covers the fact it should not be sold as hp, to the extent it suggests how to term adverts to avoid implying hp.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/11305/cycle-to-work-guidance.pdf

TSx

Oli.s wrote: »

It's unlikely to be HP, mine certainly isn't.

My employer made it clear that they bought the bike and then rented it to me. They retained legal ownership of it and 'may choose to sell it to me for a reasonable market value at the end of the scheme' which is invariably a nominal amount.

They were very careful to make it clear that there is no automatic right for me to buy it to avoid it being deemed to be hp.

It was termed hire credit, not hire purchase.

Here is a link to the gov guidance, it covers the fact it should not be sold as hp, to the extent it suggests how to term adverts to avoid implying hp.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/11305/cycle-to-work-guidance.pdf

Most policies will define contents as items which are owned by you or the legal responsibility of you - my cycle2work bike is certainly my responsibility and the agreement makes that clear.

As posted above, ask them for the exact wording that they are basing the repudiation on (ICOBS - the FCA's standard they expect insurers to meet - says that they should have offered this in writing). You can then decide how to proceed (it is possible they have unusual terms excluding items which are hired but these would probably need to be highlighted in the key facts document as unusual exclusions).

Spikey1

Hi Mariat,


Not sure if I am correct here but I suspect that the Insurer is trying to say that they will replace the bike for you...or pay for a replacement...but that it is not their responsibility to pay off your credit agreement for the purchase of your original bike.


So then, if you think about it, you will soon get a new bike from your Insurer and you will continue paying off the company you owe money to for the first bike. So that puts you back in the position you were in before the theft (albeit with a slightly newer bike).


Apologies if I've jumped to an incorrect assumption here.

mariat

Thanks to all of you. I've passed all this onto my son, which will help enormously if the insurance company continues to be awkward. Your advice has pointed him in the right direction. It did seem very unfair that he was still liable for the payments but wouldn't receive any compensation.