Insurance companies take an interest in what activities you do.
This is because sometimes they are risky. Immediate things that comes to mind for most people are hobbies such as bungy jumping and parachuting. But the list is much longer.
From an insurance perspective, we can approach this from the aspect of the situation you are in. What do you do?
If are in any of these situations, you and those around you may not have had any problems with accidents or injuries.
But your risk when compared to someone working at a desk or in a traditional trade will generally be significantly higher.
We've used this example before in a discussion with a potential client, John.
John worked on high voltage pylons in remote areas. These pylons are up to 70 meters high and don't have safety railings. In order for John to get to the pylon he had to fly in a helicopter to the pylon and be winched down to the pylon in order to work on it or the wires on them.
Now from his point of view he felt his risk is managed. He had a lot of a safety gear and had not experienced any accidents. Those around him do a similar job and have a similar experience. To be fair, if there was an accident, like electrocution or a fall, it's unlikely they would survive, so they are very careful!
But lets take this situation and look at the risk the insurance company is taking, when compared to someone behind a desk:
You can see fairly quickly that this situation is far from sitting at a desk.
So thinking about your situation, how different is your situation from just sitting in a desk are you?
What risks do you have to manage daily in order for you to do what you do? You probably do this naturally from experience so you have to stop and think about it.
How do insurance companies manage these risks? The most common approach is to exclude the activity or occupation, although this isn't always the case.
The insurance company can often offer trauma cover at an increased rate. If affordable it's a better option, as the risk is included in your cover. Loadings and exclusions are called special terms.
Primarily loadings will be per mille loadings rather than percentage loadings which is a discussion best had with an adviser about your situation.
This is because sometimes they are risky. Immediate things that comes to mind for most people are hobbies such as bungy jumping and parachuting. But the list is much longer.
From an insurance perspective, we can approach this from the aspect of the situation you are in. What do you do?
- Compete (professional sports and racing (both animals and vehicles))
- Is it physical? (martial arts, rugby etc)
- Are heights involved? (more than 10 meters off the solid ground)
- Is speed involved? (outside running and driving a private car on a public road)
- Do you require special safety equipment? (High tension electrician, professional abseil)
If are in any of these situations, you and those around you may not have had any problems with accidents or injuries.
But your risk when compared to someone working at a desk or in a traditional trade will generally be significantly higher.
We've used this example before in a discussion with a potential client, John.
John worked on high voltage pylons in remote areas. These pylons are up to 70 meters high and don't have safety railings. In order for John to get to the pylon he had to fly in a helicopter to the pylon and be winched down to the pylon in order to work on it or the wires on them.
Now from his point of view he felt his risk is managed. He had a lot of a safety gear and had not experienced any accidents. Those around him do a similar job and have a similar experience. To be fair, if there was an accident, like electrocution or a fall, it's unlikely they would survive, so they are very careful!
But lets take this situation and look at the risk the insurance company is taking, when compared to someone behind a desk:
- There's a helicopter involved, how many hours are involved in flying. Helicopter accidents happen more often than people think, there has been two on the New Zealand news in the last month.
- Does the Helicopter have all doors in place and closed?
- Are the passengers always strapped in, no as they have to be winched down to the pylon.
- What heights are involved, 70-100 meters in the air on the end of a rope or on a pylon.
- What voltages are involved, up to 400,000 volts, normal domestic supply is 230 volts
You can see fairly quickly that this situation is far from sitting at a desk.
So thinking about your situation, how different is your situation from just sitting in a desk are you?
What risks do you have to manage daily in order for you to do what you do? You probably do this naturally from experience so you have to stop and think about it.
How do insurance companies manage these risks? The most common approach is to exclude the activity or occupation, although this isn't always the case.
The insurance company can often offer trauma cover at an increased rate. If affordable it's a better option, as the risk is included in your cover. Loadings and exclusions are called special terms.
Primarily loadings will be per mille loadings rather than percentage loadings which is a discussion best had with an adviser about your situation.
