Dive insurance companies and accidents

[Akimbo]

DAN sold a less expensive policy with a 130' limit years ago... not sure why they discontinued it. In the big picture, frequency is a bigger risk than depth and I never saw a "number of dives/year" limitation, even on commercial diving policies. DCS isn't the only risk they cover.

 

[Wookie]

DAN sold a less expensive policy with a 130' limit years ago... not sure why they discontinued it. In the big picture, frequency is a bigger risk than depth and I never saw a "number of dives/year" limitation, even on commercial diving policies. DCS isn't the only risk they cover.

Commercial policies are different. There are no limitations beyond your dive plan. If your dive plan/procedures manual allow it, and your divers are trained to meet the plan, you're covered. Hell, even I have a 2 million commercial dive policy, and I have nothing more than a PADI card. That's all my commercial diving plan calls for.

 

[Lorenzoid]

A few reasons...
There’s no exclusion for stupidity. In insurance, if it’s not specifically excluded, it must be included in the coverage.

Secondly, actuaries have done the math (and they’re way better at math than you and me) and as long as you have paid your premium, and their settlement is less than policy limits, they make money every single time (in the long run)

Last, a bunch of bad publicity that might arise from “So and So Insurance Company didn’t pay my claim” is bad for business. And as stated above, as long as they settle for policy limits, they’re not going to lose money in the long run.

FYI, I own an insurance company holding several licenses, including an adjuster license.

That makes sense. I can't imagine it would increase the insurer's profitability to employ an army of investigators charged with gathering evidence about the dive(s) leading up to the claim. I can only imagine the complexities of the arguments both sides could make. Arbitration. Lawyers maybe. Way unprofitable in the long run.

 

[Wookie]

That makes sense. I can't imagine it would increase the insurer's profitability to employ an army of investigators charged with gathering evidence about the dive(s) leading up to the claim. I can only imagine the complexities of the arguments both sides could make. Arbitration. Lawyers maybe. Way unprofitable in the long run.

That only happens in a lawsuit. Rarely unless the payout is tremendous, like a lifelong disability claim.

 

[Superlyte27]

That only happens in a lawsuit. Rarely unless the payout is tremendous, like a lifelong disability claim.

Here's the problem. And there's a pretty well known member on this board that can attest to this, if he wants to speak up...
Someone gets hurt or dies. Family or insured files a claim. Insurance company decides to pay or deny or delay. Family or Insured hires a lawyer. Insurance company battles until the settlement is for policy limits. Once that happens, insurance company pays, right or wrong.

So lets say that there's a 300k policy limit. Victim is suing for 5 million. Insurance company starts battling. Plaintiff lawyer knows he was never going to win, but once they negotiate to the 300k point, it's cheaper for the insurance company to pay instead of litigating, and the actuaries know that in the long run, because of the law of large numbers, the insurance company still wins. So (and look at your policy, because they insurance company gets to make the decision, not you) lets say you were RIGHT and the issue wasn't your fault. The insurance company will still pay policy limits rather than prove that you weren't at fault. Because they don't care. Cheaper to pay limits than to litigate for a year. And the plaintiff's lawyer is happy because all he had to do was bluff for a year to get 40% of 300k.

 

[Bob DBF]

I would like input as to why dive insurance companies pay off on accidents resulting in injuries which occur when a diver dives beyond their certification level. For example, a recreational diver routinely exceeds recreational limits and repeatedly bends or otherwise injures themselves and yet their medical expenses are covered.

I would guess the short answer would be that diving is fairly safe, and those accidents are infrequent enough that the real risk in diving is the drive to the water. If the payout for the insurance pool is the same whether recreational divers, a very small percentage of the overall population, are included or not, there is no reason to single them out.

Let's face it, if insurance did not cover lapses of judgment no one would buy it because it would rarely pay out.


Bob

 

[divezonescuba]

A significant difference to other types of insurance is that the dive insurance rate is the same for all divers. Boat and car insurance is linked to past history, credit ratings, vehicle value etc.

If you have a bad past history, your insurance can get cancelled or you rate can go up if you can get insurance.

I think there is a difference between lapses in judgement and deliberate unsafe practices. In the well discussed 300 foot single al80 Cozumel incident, how is that a lapse in judgement?

 

[rjack321]

I know everyone loves to hate insurance companies. Really though they are staffed by people and those people generally are trying to do the right thing. If you are covered they want to pay out. If they don’t pay out it will probably be a load of hassle and then they will have to pay out anyway.

This thread is mixing life insurance with medical insurance. For life policies, either term or whole life, the actuaries know how to make a profit. There is no reason to deny claims which is bad for future business when your whole business model is to make modest amounts consistently.

But clearly you don't understand medical insurance. They are not interested in paying medical claims in full. In fact they employ a legion of nurses and doctors to review cases for medical necessity and reduce or deny payments to providers. Providers can't effectively sue because they'd get kicked off the insurers list of approved providers if they did. So providers tend to: 1) inflate charges in the first place, 2) eat the denied charges, 3) and/or pass on unreimbursed costs to the uninsured through the charges they are able to collect on.

 

[rjack321]

I would guess the short answer would be that diving is fairly safe, and those accidents are infrequent enough that the real risk in diving is the drive to the water. If the payout for the insurance pool is the same whether recreational divers, a very small percentage of the overall population, are included or not, there is no reason to single them out.

Nope. If you try and buy an individual policy as a diver you are almost guaranteed to get rated (i.e. pay more than a non-diver) Depending on the actual diving you are doing and medical history, you might not be to buy a life policy at all.

 

[BRT]

This thread is mixing life insurance with medical insurance. For life policies, either term or whole life, the actuaries know how to make a profit. There is no reason to deny claims which is bad for future business when your whole business model is to make modest amounts consistently.

But clearly you don't understand medical insurance. They are not interested in paying medical claims in full. In fact they employ a legion of nurses and doctors to review cases for medical necessity and reduce or deny payments to providers. Providers can't effectively sue because they'd get kicked off the insurers list of approved providers if they did. So providers tend to: 1) inflate charges in the first place, 2) eat the denied charges, 3) and/or pass on unreimbursed costs to the uninsured through the charges they are able to collect on.

"Under the MLR rules, insurers that sell individual and small group health insurance coverage must spend at least 80 percent of premiums on medical claims and quality improvements for members. No more than 20 percent of premium revenue can be spent on total administrative costs, including profits and salaries. And for insurers that sell large group coverage, the minimum MLR threshold is 85 percent. Insurers that fail to meet these guidelines (ie, they spend more than the allowed percentage on administrative costs, for whatever reason) are required to send rebates to their members. In the first six years of the MLR rule implementation, insurers rebated $3.24 billion to consumers."

Higher payouts mean higher profits