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Stranger Things: The Insurance Chapter

By: Brian O’Connell, Senior Analyst at InsuranceQuotes.com

Consumers widely view insurance as stodgy and dull, but entirely necessary.

That’s understandable, as policies that cover issues like health, home, auto, and business aren’t on anyone’s top ten lists of exciting life experiences.

But hold the presses. There are actually many unique, boutique and even downright weird things that insurers cover on a regular basis that the general public likely doesn’t know about – until they need that exact type of insurance policy.

Case in point. There are, in fact, some famous stories of celebrities insuring their body parts.

“Tina Turner had a policy on her legs, and Bruce Springsteen has a policy on his voice,” said Nate Tsang, founder of Wall Street Zen, a stock market analysis platform. “Sometimes these are partly promotional stunts, like America Ferrera insuring her smile (or rather, Aquafresh insuring it on her behalf), but the majority of policies only seem quirky at first glance.”

The fact is, just because something is unique or weird doesn’t mean it has no value. And if that thing has value, then why shouldn’t it be covered?

“Insurance companies have a demonstrated ability to cover the weirdest consumer demands,” said Brad Cummins, the Owner/Principal Agent at Insurance Geek, in Columbus, Oh. “Wedding insurance, body part insurance, bed bug insurance, alien abduction insurance, and lottery insurance are just the tip of the iceberg. Covering rare experiences and careers allows insurers to charge larger premiums due to a smaller insurance pool.”

Other financial professionals say that insurers routinely cover strange things. “Insurance companies are in the business of making money, and that’s why some of them will insure your strange requests,” said Melanie Musson, an insurance expert with USInsuranceAgents.com.  “If they can bet on taking your monthly premiums without having to file a claim, they’ll do it.”

You’ll pay for what you get, though.

“If you’re a soccer player and insure your legs, there’s a good chance that since playing soccer makes your risk of leg injury high, your premiums will be incredibly costly to reflect that risk,” Musson added.

Weird Insurance Policies: The Definitive List

What makes the list for most unique or strange insurance policy? Here’s an inside look from insurance industry experts.

Alien abduction. The weirdest insurance policy Cummins has ever come across is alien abduction insurance.

“In the event that interstellar travelers arrive (and not in peace), some insurers cover both alien invasion and abduction,” he said. “These policies have been sold to tens of thousands of concerned individuals but their terms are highly unfavorable. Companies like One Floridian and Lloyd’s of London demand an alien’s signature for the policy to be valid and they only pay out $1 per year for 10,000,000 years.”

Change of heart” insurance. It can be heartbreaking when your family spends thousands on a wedding only for you to back out.

“A company called Wedsure offers insurance that covers a “change of heart,” said Gerrid Smith, CEO and founder of Property Tax Loan Pros, in Fort Collins, Col. “That is, if the bride and groom decide to separate, you receive your money back. But there are some caveats. The coverage only extends to “innocent financiers,” not the bride and groom. And the wedding must be cancelled 365 days in advance.”


Birth insurance. Having twins is exciting but costly.

“In Britain, you can get extra insurance to cover the potential of having multiples. In essence, parents can buy insurance early in pregnancy and get a lump payment if they have multiples,” Smith said. “A family history of twins or a previous multiple birth that you can’t see adding two or more children may warrant this insurance.”


Laughter insurance. The effort to insure a comedy group in the event that an audience member died from laughter may be the funniest. “According to the BBC, one comedy trio was so confident in their wit that they contacted Lloyd’s for insurance,” Smith noted.

Insurance for athletes who have suffered a financial setback. Several athletes apparently received insurance payouts after being passed over for a higher draught position during the most recent NFL Draft.

“According to ESPN, a Notre Dame linebacker named Jaylon Smith won $900,000 from a knee injury insurance policy after falling to the 34th choice in the draft,” said Ethan Howell, co-founder of Florida Environmental, an environmental management firm in Loxahatchee, Fla. that works with insurance firms. “If he had been selected higher in the draught, he could have received $5 million.”

Insurance coverage for individual body parts. Certain bodily parts are insured by many people, especially well-known athletes or artists.

“It’s been rumored that Bruce Springsteen has a $6 million voice insurance policy with Lloyds of London,” Howell said. “Dolly Parton, the singer, insured her breasts for $300,000 each. Procter & Gamble insured Troy Polamalu’s long hair for $1 million after he inked a deal to endorse Head & Shoulders shampoo.”

“Most body parts have their own rules and regulations,” Howell said.

Psychosis insurance. Nir Kshetri, a Professor at the University of North Carolina-Greensboro, has closely studied cyber-crimes and cyber-insurance in recent years. Yes, that type of insurance actually exists.

“IG’s new product FamilyCyberEdge policy includes a coverage of one year of psychiatric services if a family member is victimized by cyberbullying,” Kshetri said. “Also covered is lost salary if the victim loses a job within 60 days of discovering cyberbullying.”

Collectibles insurance. A doll collection or extensive jewelry collection is pretty straightforward to insure because it has an objective value and assessable risk. “Usually, you can add valuables to your home insurance policy,” Munson said.

Plastic surgery-related insurance. “Insuring a tummy tuck or a body part is trickier. “Here, it’s difficult to assess value,” Munson noted. “If you depend on that body part as a source of income, you may be better off purchasing both short and long-term disability insurance.”

Strange Insurance Policies – How to Get One

By and large, insurers will consider most unique insurance policies as long as there’s not much risk of a claim.

“Lloyd’s of London is a reputable insurance company that offers policies for body parts and odd things,” Munson said. “If you’re considering an unusual policy, start with them and request a quote.”

Before purchasing an unusual insurance policy, consider if standard coverage would be a better, more cost-effective fit. “For example, disability insurance might be better than body-part insurance,” Munson added. “For celebrities, insuring cosmetic features and body parts may make sense, but for the average person, it doesn’t.”

Insurance companies also structure the terms of the policy very carefully so that people don’t end up manipulating the system and to remind people not to throw caution to the wind.

“For example, when covering adventure sports, insurers impose strict rules,” said Anthony Martin, CEO of Choice Mutual in Reno, Nev. “The policy-holders cannot indulge in them more than once a year, have to use the right equipment in approved terrains and have to be accompanied by trained professionals where needed.”

This scenario helps insurance providers insure risky situations while lowering the overall risk for themselves at the same time

Insurers want to make sure the policy-holder does not start living rashly because of the added coverage,” Martin noted. “Also, insurance companies know that some of these situations are highly improbable and insuring them is simply a precaution.”

It’s critically important to read the terms of every policy very well and get a lawyer to look at it as well, especially in special policies like these.

“The insurance company will want to safe-guard themselves in cases like these, so make sure that that combined with the premiums you will pay is worth what you are insuring,” Martin added.

SOURCES

Nate Tsang – Email: [email protected]

Brad Cummins via Lisa K. – Email: [email protected]

Gerrid Smith: Email: [email protected]

Ethan Howell: Email: [email protected]

Nir Kshetri: Email: [email protected]

Melanie Munson via 360QuoteTeam: Email: [email protected]

Anthony Martin: Email: [email protected]