The wacky world of insurance
1/03/17 There’s a saying that goes, if you can think of it, you can insure it. And it’s not far wrong.
This week the papers reported that you can now take out insurance to cover you against being gazumped. Cold comfort if you’re one of the many victims of gazumping still struggling to buy a property. But at least there’s a chance of recouping some of your costs.
Gazumping insurance is the latest in a long line of unusual and wacky insurance policies to grab the headlines. A lot of these insurance policies are real – there are specialist underwriters and brokers who can help you create an unusual insurance policy and the world-renowned Lloyds of London (not usually associated with being light hearted) has a fair few bonkers examples of its own. The question is: are they worth it?
It’s true to say that it only makes sense to insure something individually if you love it deeply and/or can’t afford to lose it. Many individual insurance policies are unnecessary if you have other forms of insurance that cover them. Warranties aren’t usually needed for the period you have a manufacturer’s guarantee, for example. And some policies aren’t worth the paper they’re written on.
If you can think of it, you can insure it
Unusual insurance policies are usually referred to as ‘specialist insurance’ and include things like funeral plans, gadget cover and other policies you may have. Here are some of the more unusual insurance policies that you can buy. We’ve left off ‘immaculate conception insurance’ and other similar policies despite the fact that they genuinely exist because they’re one-off policies generally.
Do you need to insure against someone gazumping you when you’re trying to buy a property? Well, despite very angry people across the land with stories about being stitched up by gazumpers, it’s not as common as you may think. Buying a home can involve a multitude of costs, from surveys to solicitors. We’ve checked out the policies on the market and for a flat fee of under £100, most offers cover up to £1,500 for many of the costs you might incur as a result of unscrupulous sellers. But, those costs are capped and there’s a time limit of around 6 months. So this one might be for the more cynical – or unlucky – among you.
It’s the big day and everything is perfect. But.. wait…. What’s THIS?!?!?! The party favours aren’t in the right pastels!!!! *bride explodes*
Wedding insurance is increasingly popular these days – but it won’t cover perfection. So it may not be suitable for Bridezillas or uptight grooms. You can get payouts for things like services not turning up (car, cake, flowers), public liability for guests who take a tumble when dancing to ABBA and many other things. But you can’t insure the most important thing of all – that the love of your life will say yes*. Though some policies do have advance cancellation cover, it won’t help you if you’re left alone at the altar.
*there is a ‘cold feet’ insurance policy available in America, but it’s more of a publicity stunt than the serious cover.
Beloved of many celebrities and popularised by Betty Grable, whose legs were insured for $1m (in 1948)! Of course, this was a hugely successful publicity stunt but this and the policies that followed were absolutely legitimate. Other strange body parts insured by celebrities include two more pairs of legs in David Beckham (£100m) and Michael ‘Riverdance’ Flatley (£25m), Ken Dodd’s teeth (£4m), Egon Ronay’s taste buds ($400,000) Dolly Parton’s breasts (reputedly anywhere from $600,000 to £3.8m), Bruce Springsteen’s voice (£3.5m) and Keith Richard’s fingers ($1.6m)
So can the likes of you and I insure our favourite bits? According to many insurers yes – but you’ll need to explain what level of cover you’re looking for and why the part is important. And you’ll be responsible for maintaining the item appropriately and taking reasonable care of it…
Tattoos and body piercing
No, not insurance to protect you against getting a rubbish tattoo (that’s often in the eye of the beholder). This type of insurance covers tattoo and piercing experts while practising their art. A cover can extend to faulty equipment (yikes), unexpected problems, difficult customers, personal liability cover and requirements that might be needed by any smaller business.
As for victims of awful/stupid tattoos or piercings, there is hope. While researching this article, I found UK based cover for tattoo removal or piecing reconstruction*, though presumably, you have to take this out before taking the plunge. And if you have an allergic or severe reaction, a private healthcare policy may cover the procedures required to make you like new again.
*Teenagers going to Magaluf on holiday: don’t do it. You know what we mean.
Lottery winner’s insurance
So you run a small business and your staff chip into a lottery pool each week. One Monday you arrive in the office and you wait and wait but no-one arrives for work. Then you turn on the news to see that a group of local people have just won the lottery and…
Lottery winner’s insurance originated in America (and has been claimed on at least one occasion) and is designed to cover the costs of a temporary and permanent cover of staff who quit their jobs after winning the lottery and other losses. Like many forms of specialist insurance, the premiums are surprisingly low for these policies. That’s because insurance is based on the statistical likelihood of an insurable event happening. There rarer the event, the more likely there will never be a claim. Which is why you can insure against shark attacks and being struck by lightning.
Hole in one insurance
Event insurance is quite widespread leading to unusual forms of insurance. A few years ago, there was a moral panic about horse riding companies being driven out of business by overly litigious parents. They’ve survived, but that’s because they have insurance to cover them against claims and mishaps. That’s also why you have to sign massive waivers if you want your kids to do anything fun – thank the money-grabbers and fun police for that one.
One of the more common types of event cover is a hole in one insurance. This is a policy designed to cover golfing events where there’s a big cash prize for golfers who hit a hole in one. Again, because of the statistical unlikelihood of this happening, you can sometimes offer a huge prize for a low premium, due to the low chance of the event happening
ID theft insurance was once a huge market for the industry, despite far fewer people being targeted by fraudsters than you might have thought. Some brokers received significant fines by the FCA for mis-selling these policies and many people have received refunds underpayment schemes as a result.
Why? Well, this insurance was mass-sold and was largely unnecessary. People were misled into taking out policies due to poor sales practices and many of the things covered – like replacing stolen cards – were done anyway by your bank or card provider.
Once considered to be an insurance urban myth, this is a real thing! Some reports suggest as many as 30,000 policies protecting people against unauthorised space kidnap and probing have been sold, but a more realistic figure might be 4,000.
Typical policies will cover you for; kidnapping, organ removal/mutilation, pregnancy, chip removal and (my favourite) repatriation.
Policies are quite cheap, given the less-than-serious nature of the cover. But even if you buy one for a laugh, if the broker or underwriter is based in the UK they are covered by UK financial regulations – and you can complain about them too if you’re unhappy with a claim.
Insurance is a multi-billion-pound industry, so if you can think of it, you can insure it. But the vast majority of complaints we see at Resolver relate to more traditional forms of insurance. So if you’ve got a valuable stamp collection, or a very expensive wardrobe full of clothes, don’t stall insuring it, but check if you can use an existing policy first (like your home cover).
And finally, the basic principles of ensuring anything apply. So if you are kidnapped by aliens, attacked by werewolves or your very valuable appendages get damaged, make sure you’ve followed the terms of your policy, report the problem promptly and you turn to Resolver if you don’t get anywhere. www.resolver.co.uk.