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Form PM 00 18 - Bicycles: A Comprehensive Guide

Form PM 00 18, titled "Bicycles," is a standard Insurance Services Office (ISO) form used in Personal Inland Marine insurance. Its primary purpose is to provide scheduled coverage for bicycles. This means that each bicycle to be insured is specifically listed on the schedule, along with its description and insured value. This form is designed to be used in conjunction with either the PM 00 09 (Personal Articles Standard Loss Settlement Form) or the PM 00 10 (Personal Articles Agreed Value Loss Settlement Form), which provide the broader terms and conditions for coverage. Essentially, PM 00 18 acts as an add-on to these base forms, tailoring the coverage specifically to the unique risks associated with bicycles.

Classes of Business and Real-World Examples

The PM 00 18 form is applicable to individuals who own bicycles of significant value that may not be adequately covered under a standard homeowners or renters policy. Homeowners policies often have sub-limits for certain classes of personal property, including bicycles, or may only cover them for specific named perils. Personal Inland Marine coverage, through the use of forms like PM 00 18, typically offers broader, "open perils" or "all-risk" coverage, subject to policy exclusions.

Real-world examples where this form would be used include:

• High-Value Bicycles: Owners of expensive road bikes, mountain bikes, e-bikes, or custom-built bicycles often require higher limits and broader coverage than a standard homeowners policy provides. For instance, a competitive cyclist with a $10,000 carbon fiber racing bike would benefit from scheduling it on PM 00 18.
• Collections: Individuals who own multiple bicycles, even if not all are extremely high-value, might choose to schedule them to ensure proper coverage and valuation in case of a loss.
• Coverage Breadth: Policyholders seeking protection against a wider range of perils than what their homeowners policy offers. For example, if a bicycle is accidentally damaged during transport or while riding, a scheduled bicycle floater is more likely to provide coverage.

Special Considerations

There are several important considerations when using Form PM 00 18:

• Scheduling is Key: Coverage only applies to bicycles specifically listed (scheduled) on the form. Unscheduled bicycles are generally not covered under this specific endorsement, though some minimal coverage might exist under the base homeowners policy or a general personal property floater (like PM 00 19), but likely with more limitations.
• Valuation: The choice between using PM 00 09 (Standard Loss Settlement) and PM 00 10 (Agreed Value Loss Settlement) is crucial.
  • With PM 00 09, in the event of a covered loss, the insurer will typically pay the least of the cost to repair, actual cash value, replacement cost, or the policy limit.
  • With PM 00 10, the insurer pays the amount agreed upon and specified in the schedule at the time the policy is written, regardless of current market value or depreciation at the time of loss (up to the scheduled amount). For high-value or unique bicycles, agreed value is often preferred to avoid disputes over valuation after a loss.
• Exclusions: While Personal Inland Marine policies offer broad coverage, they still have exclusions. Common exclusions that might apply to bicycles include wear and tear, gradual deterioration, mechanical breakdown (unless caused by a covered peril), and damage caused by being worked on. It's important for both the agent and the insured to understand these exclusions.
• No Professional Use: Typically, this form is intended for personal use bicycles. If bicycles are used for commercial purposes (e.g., a bike messenger service), different coverage, likely under a commercial inland marine policy, would be necessary.
• Deductibles: A deductible may apply, depending on how the policy is structured.

Key Information for Agents and Underwriters

Agents and underwriters should focus on the following when dealing with Form PM 00 18:

• Accurate Descriptions and Valuations: Ensure each scheduled bicycle is accurately described (make, model, serial number, significant features) and that the insured value is appropriate. For high-value bicycles, especially if seeking agreed value coverage, an appraisal or bill of sale may be required to substantiate the value.
• Risk Assessment:
  • Usage: How is the bicycle used? Is it for casual riding, commuting, competitive racing, or off-road adventures? Higher-risk usage may warrant higher premiums or specific underwriting considerations.
  • Storage and Security: Where is the bicycle typically stored (e.g., locked garage, apartment, outside)? What security measures are in place (e.g., quality locks, alarm systems)? These factors influence the risk of theft.
  • Geographic Location: Theft rates can vary significantly by location.
  • Loss History: Has the applicant had previous losses of similar items?
• Coverage Gaps: Explain the limitations of homeowners coverage for bicycles and how a scheduled personal property floater using PM 00 18 can fill those gaps. Be clear about what is and isn't covered.
• Pricing: Premiums will be based on the value of the bicycle(s), the chosen loss settlement option (ACV vs. Agreed Value), the deductible, the insured's location, and the overall risk profile.
• Moral Hazard: As with any valuable personal property, underwriters should be mindful of potential moral hazard, particularly for very high-value items or unusual circumstances.
• E-bikes: With the growing popularity of e-bikes, underwriters need to consider any additional risks they may present, such as battery-related issues or higher repair costs. Some insurers may have specific guidelines or endorsements for e-bikes.

By understanding the specifics of Form PM 00 18 and its interaction with the base Personal Articles Floater forms, insurance professionals can effectively provide tailored and adequate coverage for their clients' valuable bicycles.