For many of us -- especially Americans -- it's a recurring nightmare. You wake up in the hospital after a serious injury, only to find out that the insurance policy you bought and paid for has suddenly, mysteriously and irreversibly withdrawn coverage for your sport. The bill will be hundreds of thousands of dollars. You're hooped.
Unfortunately, that scenario is no simple nightmare for far too many airsports athletes: BASE jumpers, acro paragliders, cross-country enthusiasts and speedwing pilots among them. How can you avoid that life-derailing situation? Who covers our sports reliably? How can you navigate those massive terms and conditions effectively and precisely?
To answer these questions, I reached out to Mark Sequeira, a Director at Good Neighbor Adventure Sports Insurance. The division has been arranging special-requirements-heavy international health insurance for 17 years, often for travelers and expats in the world’s most remote regions. One of a tiny handful of agencies who work with extreme sports athletes – and the only one in the US – his office works with many of the top carriers around the world to design adrenaline-heavy policies.
Sequeira’s office arranges cover for an exhaustive list of sports, from jiu jitsu training in Brazil to running with the bulls in Spain. “These guys are out there doing stuff everyone else just talks about,” Sequeira enthuses. “Crazy relief and development work, photojournalism through wars and riots, marine insurance against piracy off the Somali coast – you name it. We specialize in helping those who go the farthest and try the hardest.”
Me: I heard that no insurance covers BASE jumping anymore. Is that true?
Mark: Unfortunately, that is indeed true. We used to have two plans that covered BASE jumping; however, due to outrageous claims, as well as new PPACA (Patient Protection and Affordable Care Act) laws which have no limit on medical coverage per accident, every insurance in the US has dropped the sport. Travelguard was the last one we knew that had been willing to underwrite BASE jumping. Other countries currently have some insurance offerings for BASE jumping, but that’s on a country-by-country basis.
Me: What data do underwriters use to calculate their risks?
Mark: Carriers like to write a large number of policies and as little risk as possible. Adding two BASE jumpers to a policy and having a claim from one of the two is a 50% risk. No actuary is going to encourage an insurance carrier to assume that high a risk. If the population of BASE jumpers was larger, there might be a larger pool and therefore the risk per jumper might go down. Also, as you can imagine, death due to sport – or sport-related complications resulting in death – is a huge motivator for an insurer to consider excluding a sport or activity.
In great part due to that phenomenon – the risk pool – the continuing process of individualization and specialization within airsports currently presents a significant challenge to insurers. To use an example from the paragliding world: acro and cross-country paragliding would have been covered in the past under the general umbrella of paragliding. Now, however, athletes practicing the sport have set themselves publicly apart as demonstrating greater risks than those embraced by the greater group. Carriers can recognize and exclude that discipline from the larger fan base of paragliding.
Here's a very recent example to better illustrate what I mean: This week, we had a wingsuiter who wanted to be insured for a jump from the top of Mount Everest. For this, we had to personally call underwriters (and reinsurance carriers!) and negotiate the terms of a policy. Ultimately, while we could get the athlete AD&D coverage and an Emergency Rescue policy, we couldn’t find a company to underwrite the medical insurance part of the package. This was true even with a very high deductible, confirmation that rescue, stabilization and evacuation was already insured, and client waiver of the AD&D part of the policy. The pool was just too small.
Me: What advice would you give to an airsports athlete who’s currently shopping for insurance? What should she/he look for in a policy?
Mark: Make sure that the policy explicitly states that it covers the sport you are participating in. If you practice a discipline within the greater sport, make sure you have in writing that you are covered while participating in that sport. Beyond that, make sure you’ve bought any additional rider(s) needed to cover your sport and the subdisciplines you practice. Remember that competitions are rarely covered. We have two policies that cover professionals and/or competitions -- but individuals who are participating in an event that awards a ribbon, online recognition, etc., need to be sure that they have the right policy (so the prize potential does not disqualify their coverage).
Look carefully at the amount of medical coverage you have while participating in that sport (versus simple travel benefits that cover you while traveling to and from the location.) Some policies will limit medical coverage to a set amount during actual participation in that activity.
Realize that most medical insurance is going to evacuate you from one medical facility to a better one (even if in another country) to get you the best treatment. However, they are not going to come get you unless you buy a rescue policy. Consider those implications when you choose.
Me: What don’t insurers want airsports athletes to know when they hand over money for a policy?
Mark: That’s a tough one. Almost always, the insurer is going to be taking a much bigger risk per cost of a policy for an extreme sports enthusiast going someplace to jump and/or fly than they do with a travel insurance policy for a couple going to Europe on vacation. The risk is almost always going to be disproportionate for the carrier. Believe it or not, it’s not in the insurance carrier’s best interests to hide information, since it could result in a lawsuit – or bad publicity.
The “secret” isn’t a secret: insurers weigh numbers versus risk. The house has to make money – or reasonably have the opportunity to make money. If too many people are getting hurt or the pool of participants isn’t large enough to spread that risk, the insurer won’t be in business insuring avid sportspeople for very long. While most aren’t avid sportsmen, they truly aren’t sharks. It’s in their best interests that you stay safe as well, since they’re footing the bill.
The upshot: if you're an airsports athlete and you want to be covered, no off-the-shelf policy is going to do the trick. Mark invites interested athletes to call or Skype his Arizona office for case-specific advice (including a written opinion from the underwriters). Also check out Mark's short Google Hangout: Adventure Sports Insurance 101.