a person who needs special insurance because they're an avid rock climber

How Your Hobbies Can Impact Your Insurance

It’s a New Year and you probably want to kick off 2018 by focusing on some of your hobbies. Since January is National Hobby month, we want to highlight some hobbies that can impact your insurance rates.

Many people already realize that they need additional insurance for hobbies involving costly items such as expensive musical instruments, antique collections, or guns. However, another range of hobbies has an even greater impact: extreme sports.

High-Risk – Less Product Choices

Any activity more likely to cause injuries or death leads to fewer coverage options. Most insurers do not want to assume the risk, and those that are willing to take on the risk typically offer limited choices. It is almost impossible to tailor a policy, and insurers increase premiums for hazardous activities.

No Set Definition for High-Risk

The definition of high-risk differs between carriers. One insurer might cover a high-risk activity, while the other excludes it. Some insurance companies are very risk conscious and consider activities such as hunting and fishing risky. Others are more tolerant.

Here is a list of activities commonly consider high-risk, but it is certainly not an all-inclusive list:

  • Caving
  • Cliff diving
  • Climbing (mountain, rock, ice, free soloing)
  • Contact sports (judo, karate, boxing, kickboxing)
  • Cycling (downhill mountain)
  • Diving (sky, cliff, scuba)
  • Flying (planes, hang gliders, gliders, paragliders, balloons)
  • Jumping (BASE, bungee)
  • Racing (bicycle, boat, car, truck, motorcycle, kart)
  • Rafting (white water)
  • Skiing (back country, heli)
  • Surfing (body, wind, regular)
  • Other activities (sky walking, parkour, running with the bulls, swimming with sharks, etc.)

Premium Considerations

Insurance companies often determine rates on a case-by-case basis. They’ll probably ask you many questions about your hobby such as:

  • How often you participated in the past year
  • The locations you frequent
  • The highest, deepest, or fastest limits you’ve achieved
  • Your accident history
  • Your professional training
  • Your safety gear
  • Your association, partner, or team, if you have one

Insurers are more likely to grant coverage if you only need it for occasional use, such as a vacation or single event. Regardless, you will typically pay steep premiums.

Policy Riders

Some travel insurance companies offer extreme sport riders for travel policies, but they do not protect you at home. If you belong to a professional organization, they may offer coverage with low limits of $50k or $100k.

You may also be able to extend your existing medical and life insurance coverage with a rider. Your insurer will probably charge you an additional rate per thousand and your usual premium. For instance, they might charge you $2 per $1,000 coverage on a 10-year policy of $1 million.

Total Disclosure

If you participate in extreme hobbies, don’t omit them in an application or renewal. Qualifying for medical and life insurance often involves checking your medical records.

Even those who’ve never broken a bone risk policy cancellation or a denied claim if they’re injured, disabled, or killed while they’re participating in an extreme sport. Insurance companies often have up to two years to review claims, too.

You need the expertise of a seasoned insurance agent to find appropriate coverage. Otherwise, you’ll probably pay too much or settle for whatever you can find, which may not be enough. Insurance agents have greater reach so they can find what you need more affordably and you can continue to pursue your passion.