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Sponsored: How Laka is transforming bike insurance

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15 Jun 2022
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Laka is the name of the Hawaiian goddess of hula dancing, who is said to inspire confident performance. It’s also the name of the bike insurance company that is inspiring its customers to ride with confidence, safe in the knowledge that they’re covered, and covered by a specialist insurer that’s working for them.

Founded in 2017, Laka was created out of the necessity for an alternative to the anachronistic world of insurance. Why, in a society now fuelled by credit systems, do insurance companies ask for money up front? And why are customers required to beg for their claims to be settled? 

How it works

‘It’s all about realigning incentives for better results for everyone involved,’ says Laka CEO and co-founder Tobias Taupitz. ‘We don’t ask our customers for any money up front, because we can’t predict the future and can’t possibly know how many claims we might have in a month.’

Instead, Laka settles claims and then, at the end of the month, asks all its customers – who it calls the Laka Collective – to split the costs, with 80% of the charge covering claims and 20% to keep the company going. That’s what sets it apart.

Unlike traditional insurers, who take a flat fee, pay as little as possible and keep the leftovers, Laka and its investors only make money when claims are settled. If there were no claims in a given month, the Laka Collective wouldn’t pay a penny, and there’s a capped contribution, so overpaying is off the table.

‘It’s the proverbial win-win-win, which is a bit cheesy, but it really applies,’ says Taupitz.

Tobias Taupitz’s experience in FinTech showed him how out of date existing insurance models were

Why specialist insurance matters

Most people don’t realise the risk they’re taking by relying on home contents insurance to cover bikes. In that instance, you could potentially be uncovered every time your bike leaves the house, and even if your home insurance does cover it, you’ll often be hit with a hefty excess or increased premium.

Laka insurance has £0 excess and no depreciation while covering a heck of a lot more than just theft from the home.

Bikes, e-bikes and accessories are covered for theft anywhere in the world as long as you’re using a Sold Secure Gold or Diamond lock, and partial theft is covered too, in case just a wheel, saddle, e-bike battery, or anything else is taken. You’re also covered for damage in traffic, in a race, in transit and if someone has intentionally damaged or broken your stuff.

Travelling with your bike? You’re covered for up to 120 consecutive days and that can be extended. Airline or courier lost your bike? That’s covered. Riding a sportive or doing a triathlon? Also covered. Legal assistance for a personal injury case? Covered.

There’s also accident and injury insurance that not only covers medical bills up to £1,500 but gets you faster access to GPs and specialists, as well as third party liability cover for just £1 per month, just in case the unthinkable does happen. 

Collective consciousness

At the end of each month, Laka sends out a newsletter containing all its billing information for full transparency. That newsletter also has tips on risk prevention based on the claims seen that month, because being part of the collective means looking out for others, as well as yourself.

The more the collective grows, the stronger it gets, with more people to share the risk and more people looking out for each other.

‘Insurance is about neutralising risk,’ Taupitz says. ‘It’s a lot of people coming together to insure each other, in a way, and we’re more of the facilitator in between.

‘It’s quite uncomfortable asking people to reimburse us for money we’ve already spent – it puts us in a weak position. But we focus on providing a really good customer experience so that they want to pay us back.’

All round experience

So, if settling makes Laka money, does that mean it pays out fraudulent claims? Of course not, and that’s part of Laka’s drive to provide the best customer experience.

‘We take it very seriously and therefore have a robust claims engine to weed out fraud,’ says Taupitz. ‘Our claims team is full of experienced former bike mechanics and shop workers, who know the ins and outs of what is possible.’

And if there is a claim, Laka prides itself on getting its customers back on their bikes and up to speed as quickly as possible.

‘I was in a crash recently while on the way to a cycling event,’ says Jake Vita, a road racer from East Sussex. ‘My race bike was completely written off and I was devastated as it was my pride and joy.

‘I submitted my claim to Laka two hours after and within a couple of hours they had been back in touch to let me know they were going to help and cover the bike so that I could be back on the road as soon as possible.

‘It was hugely reassuring as the realisation and injuries of the crash had started to set in. If it weren’t for the weekend, the claim would have been opened, discussed, bike bought, and closed within a single day. I was truly amazed by Laka’s service, both in terms of insurance and the human side of customer care too. I wouldn’t use any other insurance company after experiencing what Laka is like.’

There’s a level of faith and trust from all parties that makes Laka a proper ‘collective’ – its customers rely on each other to look after their stuff and rely on Laka itself to cover all eventualities.

That way, storing, travelling with and riding your bike can be carefree, because if something does happen, Laka and the collective have your back.

• New customers can get 30 days’ free bicycle insurance using the code CYCLISTMAG30 at laka.co/cyclistmag*

*For full terms and conditions please visit laka.co.uk/offerterms