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Extreme sports are called extreme for a reason - many of them are high risk. For this reason, they may be excluded from your life and disability insurance policy, or special conditions might apply. Here’s what you need to tell your insurer about dangerous hobbies and sports.
What is a hazardous pursuit?
A hazardous pursuit is the insurance term for physically dangerous, out of the ordinary extreme sports and activities that increase the risk of death or injury. Generally, anything you require safety equipment for, have to sign an indemnity for and require special training for may be considered hazardous.
Examples could include:
- rock climbing
- scuba diving
- paragliding
- hang-gliding
- fighting, such as boxing or cage fighting
- speed contests, such as motor bike and motor car racing
Extreme sports and adventure activities like these usually put participants at greater risk of an accident than the risk we face in our daily lives. This increases the risk of an early payout on an insurance policy. Your insurer will need to look at your activities individually and assess the risk so they can offer an appropriate amount of cover at the right premium.
What does it mean for your insurance?
Depending on what you do and how you do it, your life cover and disability insurance may be affected in one of four ways.
1. Your life insurer excludes cover for a hazardous pursuit
Let’s say you regularly engage in drag racing. Your insurer finds that this activity is unregulated, there are no safety standards and safety measures are rarely followed. In this case, they decide that the risk of something happening is too great and exclude cover for something that happens if you are taking part in a drag race.
This means that if you die or become disabled while drag racing, or as a result of drag racing, you are not covered and would not be able to claim. But you will be covered for other claims.
Your insurer will inform you of the exclusion and you will be required to sign a document with details of the exclusion.
2. Your life insurer applies special conditions to cover for your hazardous pursuit
In this case, your insurer will cover you for incidents that happen as a result of your participating in the activity if you follow certain safety conditions and in certain environments.
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A good example is scuba diving. If you have completed a course and have certification, and dive to certain depths, your insurer will cover you. If you do not follow these conditions you will not have cover if something happens to you while you are diving.
Again, your insurer will let you know what these conditions are and you will need to sign the document saying you agree to the conditions.
3. A loading is applied
This is when an insurer offers you cover but the premium is increased because the risk of something happening to you earlier than expected is higher than a person who does not participate in your particular activity. Loadings for hazardous pursuits are not common, but they may be an option an insurer considers.
4. Your life cover or sum assured is adjusted
In some cases, the sum assured may be changed. For example, your insurer will only offer cover up to R500 000, so if you have applied for more, they may reduce the sum assured.
What you need to tell your insurer about your dangerous sports and activities
When you take out an insurance policy you need to tell your insurer if you participate in any extreme sports or dangerous activities. If you are unsure of whether or not your activity is regarded as a hazardous pursuit, ask your insurer.
You also need to tell your insurer if you take up a hazardous pursuit after you have taken out insurance.
If you don’t inform the insurer the risk is that your claim may be rejected or the amount paid out for the claim may be lower than the sum assured, so always let your insurer know.
What you don’t need to tell us
Many of us like to try a new adventure activity on holiday, such as zip lining, and this shouldn’t affect your cover unless you take unnecessary risks. If you are a casual participant in a hazardous pursuit in a controlled environment, you don’t need to tell us.
These can make your hazardous pursuit less risky
- Qualifications, certifications and industry standards.
- Training courses and sessions.
- Well maintained and certified safety equipment.
- Experienced companies, trainers and guides.
- Group activities and support.
- Communication with guides and base camps.
Final thoughts
Life and disability cover is there to help you and your family financially if something happens. In order to offer this protection your insurer needs to know if you take part in any dangerous sports and hobbies. Extreme sports are exciting and get the adrenaline pumping. Just make sure that while you are enjoying them your cover isn’t affected.