I bought a dongle online to bypass the 20mph limit on my Bosch motor, making my commute way faster. Six months later, the bike was stolen from my office. I filed the claim, and the specialty insurance adjuster asked for the “Diagnostic Log” from the motor (a standard request in 2026). The log showed the unauthorized firmware modification, and I received a denial letter citing “Material Change of Risk.”
Key Takeaways
- Material Change of Risk: Insurance contracts are based on the bike’s factory specs. If you modify it to go faster, you have changed the risk without telling them.
- The “Illegal Vehicle” Clause: In many states, unlocking a bike makes it an unregistered moped. Insurance policies exclude “illegal acts” or “illegal trade.”
- Diagnostic Digital Forensics: High-end motors (Bosch, Shimano, Brose) record error codes and modification attempts. Adjusters can and do ask for this data.
- Warranty vs. Insurance: Voiding your warranty is annoying; voiding your insurance leaves you with zero asset protection.
The “Why” (The Modification Exclusion)
Insurers price the premium based on a bicycle. If you turn it into a 40mph electric motorbike, they are undercharging you for the risk.
“This coverage is void if the insured has concealed or misrepresented any material fact or circumstance… or if the property has been modified to enhance performance beyond manufacturer specifications.”
The Investigation: Carrier Stance on Tuning
I asked underwriters how they handle “chipped” bikes.
1. Velosurance
- Stance: Strict. They insure bicycles. If you modify it to exceed legal e-bike definitions, it is no longer a bicycle. Claim denied.
2. State Farm (Personal Articles)
- Stance: Denial. They barely want to insure stock e-bikes. If they find out it was modified, they will likely drop you as a customer entirely for “moral hazard.”
3. Sundays Insurance
- Stance: By the Book. If the bike is not street legal in your jurisdiction due to the mod, they won’t cover it.
Comparison Table
| Modification | Impact on Insurance | Legal Status |
| Cosmetic (Pedals, Grips) | None (Covered) | Legal |
| Functional (Better Brakes) | None (Covered) | Legal |
| Speed (Chipping/Unlocking) | VOIDS POLICY | Likely Illegal (Unregistered Moped) |
| Battery (Higher Voltage) | VOIDS POLICY | Fire Hazard / Illegal |
Step-by-Step Action Plan
- Remove the Chip: If you want to be insured, return the bike to factory settings.
- Be Honest During Quote: If you have a Sur-Ron or Talaria that is technically an off-road bike, do not insure it as a “bicycle.” Insure it as a “Dirt Bike” on a motorcycle policy.
- Read the “Exclusions” for “Performance Modifications”: Most standalone policies have a paragraph specifically about this.
FAQ
What if I bought it used and didn’t know it was chipped?
You might have a defense, but it’s weak. You are responsible for the condition of your property.
Does this apply to “Off-Road” mode?
If you only use it on private land, maybe. But if the theft happened on a city street and the bike was in “unlocked” mode, they will argue it was an illegal vehicle on public roads.
[IMAGE: Screenshot of a diagnostic report showing “Error 504: Manipulation Detected”]