Weird insurance

Kimberly Lankford

Worried about being kidnapping by aliens? We didn’t really think so. But fears of alien abduction plague enough people that at least one insurance company offers a policy that will pay if little green men come to take you away. Or maybe An American Werewolf in Paris has you nervous about turning into a hirsute creature of the night. No problem. The same company writes a policy to guard against such a metamorphosis. You can also buy coverage against being injured by a ghost, eaten (as opposed to abducted) by an alien, or hit by an asteroid (hey, it could happen).

Perhaps even weirder than the risks the policies insure against is that so many people have purchased coverage–some 20,000 alien-abduction policies, for example, have been sold. Who buys this stuff?. “Normally, they’re feeble-minded,” explains Simon Burgess, a former Lloyd’s of London underwriter who is now managing director of Goodfellow Rebecca Ingrams Pearson (GRIP), the London insurance brokerage that has tapped the Twilight Zone market.

GRIP, which specializes in disability coverage, has also sold about 4,000 immaculate-conception policies, which pay if paternity is ascribed to You Know Who (“very popular with girls called Mary,” says Burgess), and 4,500 of what he calls John Wayne Bobbitt policies, which pay if a knife-wielding wife.., well, you remember the story. (In case you were wondering, policies for any of the above cost $150 a year for $1.5 million in coverage.)

But you wanna know what’s really weird? GRIP has actually paid one alien-abduction claim, to the tune of 1 million [pounds sterling] sterling, says Burgess. He’s a bit vague about the details, but according to the Sunday Times, an electrician from London said he was taken aboard an alien ship for about 40 minutes while looking for UFOs in Wiltshire. Burgess admitted to the Times that the electrician was actually his business partner, but insisted that the story was true nonetheless.

Pick a disaster, any disaster, and there’s probably an insurance policy to cover it. Some of the policies are weird; some are better described as offbeat–mainly because they cover very specific risks, such as a person’s singing voice (Bruce Springsteen has coverage) or a stallion’s, er, virility. Likewise, although some of the policies are a bad buy, a few may actually be a good deal if you face risks a little out of the ordinary.

Disability Coverage for Stallions

To the essential–but omen onerous—task of buying all kinds of insurance for you and your family, add buying health, life and even disability insurance for your pets. For about $340 a year, Redland Insurance Co., in Council Bluffs, Iowa (800-365-0398, ext. 3757), sells a horse-mortality policy that will pay $10,000 if your quarter horse dies or is stolen. For another $100, Redland and about six other companies in the business will pay the same amount if your stallion becomes unable to breed because of an illness or accident–sort of like an own-occupation disability policy.

Worried about health bills for your household pets? Nothing weird about that. In fact, Veterinary Pet Insurance (800-872-7387) is just one company that covers pets. Its policy on puppies and kittens pays up to $4,000 in medical bills per incident and $12,000 per year, after a $40 deductible. Cost: $171 per year (more for older pets). But the policy sets low limits for certain kinds of coverage (such as $520 for a fracture requiring a splint) and doesn’t cover congenital diseases or routine care. And unlike individual policies you buy on your own health, you can’t deduct the cost of the premiums on your tax return.

Celebration Interruptus

Every prospective bride and groom has heard enough wedding disaster stories to live in trepidation until the special day. Like the time the bride’s little brother thought white was drab and finger-painted his sister’s dress–the night before the wedding. Or the bride who was hospitalized with appendicitis on her wedding day.

Fortunately, those brides were covered by Fireman’s Fund, which sells insurance for weddings, bar mitzvahs and other celebrations. Fireman’s replaced the finger-painted dress, covered nonrefundable deposits when the hospitalized bride postponed her wedding and, in another disaster in which all the negatives were stolen from the photographer’s car, paid for the entire wedding party to reassemble at the original location–in Hawaii–to re-create the scene for new photos.

Fireman’s, which sells through R.V. Nuccio and Associates Insurance Brokers (800364-2433), in Fawnskin, Cal., charges $125 for $3,000 of cancellation/postponement coverage and about $2.25 for each additional $100 of coverage; $2 per $100 for photography coverage, and 20 cents to 60 cents per $100 to replace special attire, jewelry and gifts. The minimum premium is $195. The company will also provide $1 million of personal liability for $75–often required by the celebration venues. You can buy the policy up to two years in advance. Unfortunately, it won’t cover a last-minute breakup. And there are no refunds for divorce.

Ransom Reimbursement

Are you concerned that your family–or boss–won’t cough up the ransom if you’re kidnapped? You can ease your fears by buying a kidnapping policy.

Multinational corporations have purchased kidnapping insurance for years, in case their executives are abducted by terrorists. But individuals can also buy this coverage if they’re about to fly off to a kidnapping hot spot such as Mexico, Colombia, Russia or the Philippines. In the first half of 1998, Lloyd’s paid out close to $20 million for kidnapping claims in Mexico, says Thomas Petersen of Petersen International Underwriters (800345-8816), a Valencia, Cal., firm that sells Lloyd’s policies.

The price varies depending on who you are, what you do and how you do it, says Petersen. A run-of-the-mill American CEO who occasionally travels abroad would pay about $1,000 to $5,000 for the policy; a high-profile person–such as anyone named Rockefeller–would pay about $2,500 to $10,000. The policy will reimburse up to $1 million in ransom (it’s illegal for the insurance company to pay the ransom directly to the kidnappers) and provide a response team of negotiators within hours.

You may also want to consider paying a few hundred dollars more to insure your whole family. “The goal of the kidnappers is to get one family member,” says Petersen. “They usually don’t care who it is.”

Cork Fly in the Cellar

Wine-collection insurance covers not only basic losses, such as breakage and theft, but also unsavory situations, such as cork fly–which happens when bottles spontaneously pop their corks because of a change in temperature. The insurance (cost: 50 cents to $1 per $100 of value) will also pay off if the bottles become worthless because, say, firefighters hose down the wine cellar during a fire and all the labels come off, says Michael Smerkanich, the valuable-articles specialist for Alton Insurance Agency, in Arlington, Va.

If taxidermy’s your thing, Fireman’s Fund is prepared to cover your collection. The company, which insures lots of odd stuff, learned all about taxidermy risks and values when approached by a hunter who wanted insurance for his stuffed-animal collection. Fireman’s has also covered carousel horses, nickelodeons and stuffed-bear collections-items that aren’t covered for breakage or their full replacement value under typical homeowners-insurance policies. Artwork and furniture usually cost 15 cents to 20 cents per $100–much less than the $1.40 to $1.75 per $100 for jewelry because it’s a lot tougher to sneak away with a Chippendale desk than a diamond brooch. (You’ll get a discount if you keep your jewels in a vault.) Chubb and Lloyd’s offer similar prices.

Rained Out

For the Las Vegas-style approach to insurance, New York agency Worldwide Weather ( insures against the elements. You pick the dates, the place and the kind of weather–they’ll come up with a price based on historical data from the National Climatic Data Center. For $404, for example, they will pay $3,000 if there is more than 0.01 inch of rainfall between 10 A.M. and 4 P.M. on five or more days between September 1 and September 9 to cover a vacation on the island of St. Maarten/Juliana in the Caribbean.

Chubb’s TravelSafe policy (888-885-7233) will reimburse you for nonrefundable deposits if you cancel your trip or leave early because you’ve been subpoenaed, your plane is hijacked or you’re quarantined (also if you or an immediate family member gets sick or has an accident). The policy also pays for emergency medical transportation and provides $25,000 in accidental-death insurance. The price is based on the cost of the trip: $59 for a $501 to $1,000 trip; $241 for a $4,000 to $4,500 trip.

Weird Life Insurance

Indianapolis life’s runner’s edge policy gives fast runners discounts off their term life insurance policies. Just send the company your certified race time for an event that’s 5K or longer and you’ll get up to a 15% discount, depending on the distance, your time, your age and your gender.

But the term policies are expensive and the discounts small, even if you’re one of the world’s top runners. For example, Moses Tanui’s winning 1998 Boston Marathon time of 2 hours 7 minutes and 34 seconds would garner him only a $26 discount off Indianapolis Life’s $250,000 15-year level-term policy, bringing his annual premium down to $206. That discount would last for four years; if Tanui had stopped running marathons by then, the price would rise back up to $232 per year. (He could buy a $250,000 15-year level-term policy from CNA and pay only $175 per year no matter what happened to his running career.)

Then there’s expensive insurance with weird commercials. Gerber, the baby-food company, sells life insurance for senior citizens? If you watch a lot of late-night TV, you’ll see Gerber’s ads targeted at term-life-averse seniors concerned about having enough insurance to cover burial costs. For $27.40 per month, a 60-year-old can buy $5,000 worth of cash-value insurance, regardless of health.

But that’s a crummy deal. If you live for more than 15 years, the $5,000 death benefit will be less than the amount paid in. If you live to age 90, for example, you will have paid $9,864 in premiums but have only a $5,000 death benefit. Even if you’re in bad health, you’d do better putting the money under your mattress.

COPYRIGHT 1998 The Kiplinger Washington Editors, Inc.

COPYRIGHT 2008 Gale, Cengage Learning