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AGENTS & BROKERS ONLY |
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Other Sports & Recreation Insurance Programs |
Deductibles Under Sports Accident Insurance PoliciesAccident insurance deductibles for sports and recreation organizations commonly range from $0 to $500 per claim.
Accident Deductibles can result in significant premium savings. For example, going from a $0 to $100 deductible may result in a 20% discount on many Accident policies.
Reasonable deductibles on Accident policies can be beneficial to sports organizations; however, it should be explained to participants and/or parents that they are responsible for paying the deductible out of their pocket.
There are two types of common Accident deductibles under an Excess Accident policy: corridor and disappearing. A corridor deductible applies even if existing family health insurance has made payments on a primary basis. On the other hand, a disappearing deductible is satisfied to the extent that existing family health insurance has made payments.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Payout Period Under Sports Accident InsuranceUnder an Accident insurance policy for a sports or recreation organization, the payout period is the time period for which incurred medical bills will be paid from the date of the injury.
The most common payout period under an Accident policy is one year. However, for a small additional premium, the payout period may be extended to two or three years.
In cases where the medical limit is $100,000 or higher, it is recommended that the payout period be amended to a period of two or three years. The reason is because if the bills are greater that $100, 000, it is more likely that bills will continue to be incurred for more than one year.
In addition, there are other situations where medical surgeries and treatments to injured minors may be delayed until they reach certain growth or developmental benchmarks. Such delays can result in no coverage if the surgery or procedure occurs after the expiration of the payout period. This is another reason for extending the payout period to two or three years.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Mandatory vs Optional Participation In Sports Accident InsuranceMandatory participation by all participants under an Accident policy is superior to optional participation by some participants.
Most Accident policies covering sports and recreation organizations require a premium to be paid on behalf of and coverage to be extended to all participants. Since most Accident coverages are excess or secondary, mandatory participation by all participants results in a representative spread of participants that are both insured and uninsured as respects to existing family health insurance.
On the other hand, some Accident policies covering sports and recreation organizations allow each participant or his or her parent to elect whether or not they want coverage. Optional participation results in adverse selection against the insurance carrier since only those who don’t have existing family health insurance will normally opt to purchase Accident coverage under optional participation.
Because most of the participants purchasing coverage under an optional participation plan don’t have existing family health insurance, the Accident policy will be paying most claims on a primary basis which will be very expensive for the insurance carrier.
As a result, optional participation Accident policies tend to be very expensive and often unaffordable. In order to make them more affordable, the insurance carrier will water down the benefits by either lowering the medical limit or by inserting internal payout limitations or sublimits.
Watered down benefits under Optional participation Accident policies don’t adequately cover medical bills in the event of a moderate to serious injury. If all medical bills are not paid, the result can be a lawsuit against the sports organization in search of a deep pocket.
In addition, many General Liability carriers that cover sports organizations require that Excess Accident Insurance is carried on all participants on a mandatory participation basis. Otherwise, General Liability coverage can be voided in the event of a participant injury lawsuit.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Excess vs Primary Coverage For Sports Accident InsuranceExcess Accident insurance is superior to primary insurance for Accident insurance policies for sports and recreation organizations such as teams, leagues, camps, and recreation departments. This is especially true if the purpose of the Accident policy is to cover moderate to serious injuries.
Excess Accident insurance is also known as secondary insurance. Excess Accident insurance requires other collectible insurance such as family health insurance to respond first. As a result, the typical case involves initial payment by the family health carrier less any deductible and coinsurance. The Excess Accident policy should provide payment for such deductible or coinsurance so that the injured participant or parent incurs no out of pocket expenses.
There should be a coordination of benefits between the two policies so that the injured party does not owe a debt to the medical service providers. If a debt is not owed, there will be no dunning letters or calls from collection agencies and as a result there will be little need for the injured party to visit an attorney.
Also, due to the coordination with existing family health insurance, an Excess Accident policy will be much less expensive than a Primary Accident policy.
On the other hand, Primary Accident insurance pays without regard to other collectible insurance. For this reason, Primary Accident insurance is generally unaffordable. In order to make it more affordable, the insurance carriers that sell Primary Accident insurance will water down the payout by either selling medical limits less than $25,000 or by inserting internal payout limitations which are also known as allocated benefits or sublimits. See prior blog posting on Internal Payout Limitations under Accident Insurance for a description of how they significantly reduce payouts.
The use of either reduced medical limits under $25,000 or internal payout limitations under Primary Accident insurance will result in only a partial payment in the event of a moderate to serious injury.
Partial payouts can result in lawsuits by injured parties in search of a deep pocket. This is bad news for sports organizations and their directors, officers, employees and volunteers. Therefore, high limit Excess Accident insurance that does not contain internal payout limitations is far superior to low limit Primary Accident insurance that contains internal payout limitations.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Internal Payout Limitations Under Sports Accident Insurance PoliciesAccident insurance policies that cover sports and recreation organizations such as teams, leagues, camps or recreation departments should not include internal payout limitations which are also known as allocated benefits or sublimits.
Examples of these unacceptable internal payout limitations, allocated benefits, or sublimits include:
These internal payout limitations effectively reduce the payout for moderate to serious injuries to 50% of total medical bills in many cases. A reduced payout leads to unpaid medical bills which can result in a lawsuit against a sports organization and its administrators, employees, and volunteers in an effort to find a deep pocket.
These internal payout limitations should always be avoided for normal sports and recreation activities. However, in the case of high risk adult sports and activities, it may not be possible to negotiate affordable terms with an Accident carrier without such provisions.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
Minimum Medical Limits For Sports Accident Insurance PoliciesAn Accident Insurance policy covering sports and recreation organizations such as teams, leagues, camps, and recreation departments should have a medical limit of at least $25,000 at a minimum.
A limit less than $25,000 won’t adequately respond to a moderate to serious injury. For example, an ACL injury is a common injury in sports and the costs of surgery and rehab can easily exceed $25,000. An Accident policy with a limit of $5,000 or $10,000 will only protect against small nickel and dime claims.
Whenever the Accident limits are not high enough to fully cover the medical bills, the sports organization and its administrators (officers and directors), employees, and volunteers will likely be shotgunned into a lawsuit as a deep pocket.
Disclaimer-The minimum recommended medical limits should be exceeded if higher limits are available and affordable.
Source: John Sadler
Copyright 2004-2009, Sadler and Company, Inc. All Rights Reserved
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