Purpose of this Article

I know that it's a rotten subject. Insurance is the last thing that you want to buy – and life insurance has no benefit to you because you needs to be dead to claim on it. However, if you're on this path already, or considering going down the tech/cave path you need to think about your life cover if you have any dependents.

It's because the insurance company will do everything it can reasonably (and legally) do to avoid paying out. This is just a fact of the business model – not an ethical or legal issue. I am not judging on that score. I am also not an insurance agent – just a careful, thoughtful and I hope logical diver, with extended family commitments.

Good Technical/Cave Diving training is designed to allow divers to develop a thinking approach to the risks we run in the water. This article is designed to prompt the diver to look at the risks outside of the water – in case the worst happens.

Life Cover v Accident Cover

Pretty much every diver carries accident cover policies. The major training agencies promote them, and most people have them because they don't want to pay medical expenses for things like recompression treatment. Most of these policies also have a small coverage for death in diving.

Many divers I have spoken to have assumed that between this policy, and their standard life insurance policy they are adequately covered. This may or may not be the case.

If you have -

• A mortgage on a property
• Dependent relatives (wife/child/parent)
• Other financial obligations that will last after you die

Then you need to have a serious think about you life cover, as the diving policy may not pay out enough to cover your needs and the life policy may refuse to pay.

Why do Insurance Companies not pay?

The Nature of Insurance

Basically an insurance policy is a contract between the policy holder and the insurance company. There are obligations on both sides -

You are obliged to:

• Tell the company about your risky behaviours (smoking, drinking, diving etc.)
• Tell the company if you take on any additional risks (new diving types etc.)

On that basis, the insurance company evaluates the risks and makes a bet on how soon you will die. They will then pay out if you die.

(Cue corny title music)
Your mission, should you choose to accept it, is to outlive that prediction..

That's why we get the best training we can, practice and try to dive safely within our personal limits.

What happens if you don't tell them something?

Well in most cases it can be viewed as a breach of the contract between you and the company. The usual reasoning is that you didn't provide accurate information for the insurance company to adequately assess the risk. Most policies also have a clause in the contract stating that you have to tell the company if your hobbies/activities change, so not being a Technical/Cave diver when you took out the policy is not a valid excuse.

I know several real-life examples of this. Most tragically, leaving families with the loss of a family member without the payout of the insurance policy. It's possible to lose the house, cars etc. as well as the person.

Therefore, even if it makes the insurance more expensive, you really need to inform the company of rick activities. These activities would obviously include Cave Diving and Technical Diving. I looked at it and the last thing I want is for my family to suffer financially as well as emotionally because I am not around.

Make sure you declare your diving

In all policies you have to state if you do a risky hobby such as diving, flying, motorsports. If you do not declare the activity and you die doing it your beneficiaries will probably not be paid. This makes any money you spent on the policy useless.

Watch out for the different types of diving

Policies are usually written for “recreational diving” this includes Cave/Technical diving for a hobby. Any diving done for payment (other than recreational diving instruction) may not be covered. If you're not clear – ask you insurance company before you go.

For example, taking that video of the sunken fishing boat for the insurance assessor is a task that legally may become commercial diving – you may not be covered!
Approaches to Insurance for Divers

Where to buy

Don't assume that you standard life insurance cover operation will be interested in insuring a technical/cave diver. Most aren't. You'll need a specialist, and the appetite for risk that the insurer holds fluctuates from month to month so an insurer good one month may not be as competitive next month.

It's probably best to go to a specialist insurance broker. There are many out there that cover other “dangerous activities” like Motorsports or private aviation. The broker's business is knowing the market and getting quotes. I found that the broker was able to save me a large amount on the insurance cover. They earned their commission!

For those that either can't work a search engine - or can't be bothered to work it out - I will also put up some links for specialist brokers in the links pages.

2 examples are: Dangerous Pursuits and The Insurance Surgery

The quote

Once you have declared your hobby – the pain comes with the premium charged. This is composed of two parts of the charge

1. The basic life insurance

This is extremely well explained in a host of financial websites. I won't try here, but it covers you for “normal” and lifestyle risks like smoking.

2. The risk premium increase/uplift

This is the bit that reflects all the additional risks that the insurance company thinks you are running and their marketing charges for doing the policy. The increase may not fit our appreciation of the risks – but it makes commercial sense for the insurer (after all we're a niche market with less competition).

The premium increase/uplift is ofter quoted in a strange unit “per mille per month” meaning a cost per thousand pounds of cover per month.

Example
If you want £100,000 of cover and the quote comes back at £1 per mille per month the premium would be:

(£100,000 *£1.0) / £1,000 = £100

NB This is not a representative quote – just easy maths!

First time through this process I was quoted ranges from £0.33 per mille/month to £8.00 per mille/month - a huge range so it's worth that shopping around. Rates will vary dramatically based on the appetite for risk at the time of the policy.

It's too expensive what can I do?

• I wouldn't recommend not buying the insurance.
• I wouldn't recommend lying on the form.

Both for the reasons set out above. However, there are ways to reduce the cost of cover.

1. Split the insurance cover into chunks

This was suggested by Graham_HK and is a good strategy. The premise is to have full cover for all requirements on a standard policy. This covers the usual risks like car accidents etc.
Then have a second specialist policy that also covers the technical/cave diving. The second policy would be for a lower amount, but should cover basics – a lower level of coverage discussed with your beneficiaries, that meets their needs but not the Ferrari..

2. Limits your diving activities

Not fun – but definitely sensible. If you have fewer dives they tend to charge less..
Strangely enough the insurance companies seem to think that a diver that dives infrequently is a better risk than one that dives all the time. I can't see it myself, but there you go!
Limit your depths, frequency and activities. Team diving is cheaper than solo diving. Open Circuit seems to be cheaper than rebreathers.

Check with the insurer what the limitations are. If you compromise stick to the compromises made or you may not be covered.

3. Consider NOT Technical/Cave Diving

This seems the most “Killjoy” of all. However, if you need to cut corners in the area of insurance to dive, what other corners might you be financially pressed into cutting?