Weird insurance

Kiplinger's Personal Finance Magazine, Oct, 1998 by Kimberly Lankford

Worried about being kidnapping by aliens? We didn't really think so. But fears of alien abduction plague enough people that at least one insurance company offers a policy that will pay if little green men come to take you away. Or maybe An American Werewolf in Paris has you nervous about turning into a hirsute creature of the night. No problem. The same company writes a policy to guard against such a metamorphosis. You can also buy coverage against being injured by a ghost, eaten (as opposed to abducted) by an alien, or hit by an asteroid (hey, it could happen).

Perhaps even weirder than the risks the policies insure against is that so many people have purchased coverage--some 20,000 alien-abduction policies, for example, have been sold. Who buys this stuff?. "Normally, they're feeble-minded," explains Simon Burgess, a former Lloyd's of London underwriter who is now managing director of Goodfellow Rebecca Ingrams Pearson (GRIP), the London insurance brokerage that has tapped the Twilight Zone market.

GRIP, which specializes in disability coverage, has also sold about 4,000 immaculate-conception policies, which pay if paternity is ascribed to You Know Who ("very popular with girls called Mary," says Burgess), and 4,500 of what he calls John Wayne Bobbitt policies, which pay if a knife-wielding wife.., well, you remember the story. (In case you were wondering, policies for any of the above cost $150 a year for $1.5 million in coverage.)

But you wanna know what's really weird? GRIP has actually paid one alien-abduction claim, to the tune of 1 million [pounds sterling] sterling, says Burgess. He's a bit vague about the details, but according to the Sunday Times, an electrician from London said he was taken aboard an alien ship for about 40 minutes while looking for UFOs in Wiltshire. Burgess admitted to the Times that the electrician was actually his business partner, but insisted that the story was true nonetheless.

Pick a disaster, any disaster, and there's probably an insurance policy to cover it. Some of the policies are weird; some are better described as offbeat--mainly because they cover very specific risks, such as a person's singing voice (Bruce Springsteen has coverage) or a stallion's, er, virility. Likewise, although some of the policies are a bad buy, a few may actually be a good deal if you face risks a little out of the ordinary.

Disability Coverage for Stallions

To the essential--but omen onerous---task of buying all kinds of insurance for you and your family, add buying health, life and even disability insurance for your pets. For about $340 a year, Redland Insurance Co., in Council Bluffs, Iowa (800-365-0398, ext. 3757), sells a horse-mortality policy that will pay $10,000 if your quarter horse dies or is stolen. For another $100, Redland and about six other companies in the business will pay the same amount if your stallion becomes unable to breed because of an illness or accident--sort of like an own-occupation disability policy.

Worried about health bills for your household pets? Nothing weird about that. In fact, Veterinary Pet Insurance (800-872-7387) is just one company that covers pets. Its policy on puppies and kittens pays up to $4,000 in medical bills per incident and $12,000 per year, after a $40 deductible. Cost: $171 per year (more for older pets). But the policy sets low limits for certain kinds of coverage (such as $520 for a fracture requiring a splint) and doesn't cover congenital diseases or routine care. And unlike individual policies you buy on your own health, you can't deduct the cost of the premiums on your tax return.

Celebration Interruptus

Every prospective bride and groom has heard enough wedding disaster stories to live in trepidation until the special day. Like the time the bride's little brother thought white was drab and finger-painted his sister's dress--the night before the wedding. Or the bride who was hospitalized with appendicitis on her wedding day.

Fortunately, those brides were covered by Fireman's Fund, which sells insurance for weddings, bar mitzvahs and other celebrations. Fireman's replaced the finger-painted dress, covered nonrefundable deposits when the hospitalized bride postponed her wedding and, in another disaster in which all the negatives were stolen from the photographer's car, paid for the entire wedding party to reassemble at the original location--in Hawaii--to re-create the scene for new photos.

Fireman's, which sells through R.V. Nuccio and Associates Insurance Brokers (800364-2433), in Fawnskin, Cal., charges $125 for $3,000 of cancellation/postponement coverage and about $2.25 for each additional $100 of coverage; $2 per $100 for photography coverage, and 20 cents to 60 cents per $100 to replace special attire, jewelry and gifts. The minimum premium is $195. The company will also provide $1 million of personal liability for $75--often required by the celebration venues. You can buy the policy up to two years in advance. Unfortunately, it won't cover a last-minute breakup. And there are no refunds for divorce.