What is a hazardous activity?
Life and disability insurance policies consider hazardous activity and high-risk recreational pursuits. The activities are usually not insured because of the risk of harm or loss. Dangerous sports include scuba diving, base jumping, hang gliding, race car driving, plane flying, horseback riding, bungee leaping, parasailing, and off-roading. This group includes construction, logging, aircraft pilots, offshore oil rig workers, fishermen, structural steelworkers, and underground mining.
If a pastime matches an insurance company’s definition of hazardous activity, the policyholder may face exclusion or increased premiums due to the high-risk nature of the activity.
If the insurance company issues a policy, they may expressly exclude dangerous activities from coverage. The insurance coverage will cover other covered accidents and occurrences but not designated hazards, death, or disability.
Knowing Dangerous Activity
Policyholders may conceal harmful hobbies or jobs in their insurance applications for approval. Non-disclosure on insurance applications is fraud. The 1984 Insurance Contracts Act required insurers to provide all reasonably relevant facts for their final judgments.
The company may take action if the applicant is misled on the insurance application. The insurer will analyze medical records and prior insurance coverage throughout the underwriting process, considering injuries from risky activities. The insurer may reject the application or change the policy and premium to cover the dangers. After issuing a policy, the insurer may seek back premiums, reduce death or dismemberment benefits, or cancel the coverage if it discovers harmful nondisclosed enterprises.
It’s important to know that insurance companies consider certain hobbies dangerous. Trying scuba diving for the first time on vacation does not make you a high-risk candidate.
Special Considerations
Disability insurance exclusion riders exist. Exclusions include alcohol and drug misuse. Disability from substance misuse or alcoholism is usually limited to two years but may not be covered.
Prescription drugs may help decrease substance misuse. Insurers may claim you take too many prescriptions for your injuries or illnesses. The drug misuse limitation may limit or deny your genuine physical condition insurance claim.
Specific, lesser-known exclusions may include:
- Aircraft-related injuries (excluding scheduled airline passengers)
- War or aggression
- Suicide attempts
- Normal pregnancy
- Workplace injuries
- Disabilities caused intentionally
- Smoking is dangerous, too. Smokers pay more for insurance.
Alternative Hazardous Activity Coverage
Some travel and sports insurance providers provide adventure activity coverage for extreme sports enthusiasts and adventure tourists. Your typical travel insurance does not cover lost luggage, missed flights, or medical emergencies. Adventure activity insurance targets extreme sports and lifestyles. Most travel insurance policies prohibit daring and dangerous sports; thus, it’s usually an exclusion waiver.
Scuba diving can prevent exclusion based on participants’ education and expertise. In particular, some insurers include PADI and NAUI scuba divers in the base plan without adding a rider, which increases prices. Other adventurous activities often require a second rider at an additional cost.
Actual Example
In India, the South Mumbai District Consumer Disputes Court upheld Nagin Parekh’s appeal. The court heard Mr. Parekh’s lawsuit against an insurance company that rejected reimbursement for a 2012 ballooning accident.
Parekh experienced an abrupt loss of altitude during an arranged hot-air balloon excursion. The balloon basket landed harshly, and the pilot and co-pilot scrambled out. Before securing the basket, the balloon again took off, taking Parekh and other explorers. Another catastrophic balloon accident injured Parekh’s legs and required bone fracture repair.
Parekh’s insurance refused medical and disability coverage, denying payment claims. The corporation said, “One who went for the ride did it at their own risk,” which the appeals court upheld. The court said, “Hot air balloon riding always involves a high risk of life, and it is hazardous in nature.”
So, what’s the high life insurance risk?
Life insurers worry about high-risk activities because they can cause early mortality earlier than actuarial models forecast. Such sports include flying, paragliding, bungee jumping, scuba diving, racing vehicles, off-roading, and more. Insurers’ actions vary.
High-risk policy: what?
High-risk plans cover aggressive drivers and sick people. Such insurance is more expensive and may have restrictions.
Disqualifications for life insurance?
Life insurance underwriting may reject you if you’re too risky. Lifestyle, health, family history, and finances might cause this. Lying on your insurance application will also reject you.
Conclusion
- Insurance policies deem hazardous hobbies or activities high-risk.
- Due to the danger of damage or loss, life and disability insurance plans seldom cover these activities.
- Activities may be hobbies or careers.
- Hang-gliding, light aircraft flying, and race car driving are examples.
- High-risk hobbies and jobs require Adventure Activities Coverage, an insurance rider that costs more.
