Dangerous Pastimes and Extreme Sports Insurance in Australia
With sport, risk is about the probability of physical danger. For life insurance companies, extreme sports carry with it a very high likelihood that something will go wrong, with an increased chance of death as the outcome.
Most sports carry a risk of serious injury. If you are one of the many Australians who participate in a sport, you should consider what would happen to your lifestyle if you got injured. What would you do if you needed hospitalisation and extended time off work for recovery or worse became totally and permanently disabled?
Most life insurance policies in Australia will exclude extreme sports, like skydiving, hand gliding, parachute jumping and motor racing. However, if you have a past time that you love, and you want to make sure you and your family is financially protected, then compare a variety of life policies to find the one that suits your adrenaline lifestyle and budget.
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When applying for a life insurance policy, you'll usually be asked if you participate in any adventurous activities or dangerous past-times.
Based on the information provided, that activity might be excluded from coverage, or you might have to pay a higher premium. In some cases, your policy could be declined because the insurer is not willing to cover such a high risk.
While many insurers will not cover dangerous hobbies or activities, there are a select few that do. ComparingExpert can help find life cover if you love participating in extreme sports. From skydiving to motor racing and Mixed Martial Arts (MMA).
The 10 most dangerous extreme sports in Australia
- Auto Racing: Racing automobiles, including motorbikes, for competition.
- Sky Diving: Parachuting from an aircraft.
- Base jumping: Jumping and free falling from cliffs, buildings or bridges and then opening your parachute.
- Free climbing: Like rock climbing, but without safety gear or harness.
- Paragliding: Gliding through the air with a canopy resembling parachute.
- Scuba Diving at specific depths: The deeper you dive; the more pressure is exerted on your body.
- Big wave surfing: Surfing is dangerous at waves of 6.2 meters, with your body taking a profound impact.
- Caving: Exploring caves can be dangerous when including difficult climbs or diving or when exploring caves where flooding and falling rocks are a possibility.
- Mixed Martial Arts: Also known as, MMA, Ultimate or Cage Fighting is a full-contact sport where fighters will try to hurt each other as much as possible.
- Skiing and snowboarding: The chance of a knee ligament, head or spinal injury is relatively high with this sport and danger increase with the level of terrain you decide to take on.
How are extreme sports assessed?
Your application for life insurance will generally have questions referring to sports and extra circular activities. If you are engaging in such activities at the time of your application, you must fully disclose this to the insurance company.
Extreme sports are generally assessed on a case per case basis and will often depend on:
- The type of dangerous activity or sport you take part in.
- How often you participate in the activity/sport.
- The extent/degree or severity you partake in.
- If you’ve had any accidents in the past.
- Where you participate in the activity.
- Your level of experience and if you wear protective gear.
- Qualifications or certificates you have.
- Memberships to relevant associations.
- If you are involved in any competitions.
- Speeds and engine size (for motor racing).
- Depths (for diving).
Each of the above factors are carefully considered by the insurer. They will analyse your risk of potentially lodging a future claim. Then, based on their underwriting guidelines, the insurer will provide you with either standard rates, a premium loading, an exclusion or decline your policy altogether.
Sports underwriting in Australia
Depending on the type of sport you engage in, and the increased likelihood participation may lead to a claim, your insurer may:
- Offer standard rates: This is the best possible outcome when an insurer provides you with full cover at no additional cost.
- Add a premium loading: Insurer issues your policy with an added premium to compensate for the additional risk. Loadings usually apply when a company is willing to provide cover for high-risk activities but at more expensive rates.
- Exclude cover: Some insurers will provide you cover at standard rates but place an exclusion on the specific activity. Meaning, should you be injured or die because of your participation in the extreme sport, you will not receive a payout. Exclusions may be reviewed every 12 months.
- Decline cover: Some sports are too risky. When an insurer is not willing to take on the risk of your favourite hobby or sport, they will not offer you cover.
Australian sports which are generally covered by standard rates include:
Policy types available for sports insurance in Australia
Your eligibility for a sports injury payout depends on the specific insurer and product you purchased, but you can generally expect life insurance, TPD cover, income protection insurance and trauma cover to be offered by most life insurance companies.
Life insurance for dangerous sports
Life cover provides your loved ones with a lump sum payout should you pass away. Standard rates may be available if you participate in an extreme sport. However, depending on the type of sport and your increased risk of premature death an insurer might either apply a loading or exclusion to your policy.
Does life insurance cover skydiving?
Yes, skydiving insurance, also referred to as parachute jump insurance is available from select insurers. However, finding affordable life insurance for skydiving in Australia depends on various factors, including your level of expertise and the type of skydiving you participate in. Your insurer will generally charge higher premiums the more frequently you engage in skydiving.
Our close relationship with life insurance companies affords you the opportunity to enjoy the sport you love, while also ensuring your family is financially protected if the worse should happen.
For the best possible rates, we’ll need to know:
- Your age and gender.
- Your height and weight.
- The level and type of cover you’re applying for.
- The specific type of skydiving you participate in, for example, tandem skydiving, accelerated freefall, formation skydiving etc.
- How frequently you jump out of planes.
- Drop zone locations.
- Your level of experience and training.
- Certificates and licenses, you have.
- Any affiliations or memberships of clubs or organisations.
- Whether you participate in any competitions, exhibitions or record attempts.
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Sports income protection insurance
Income Protection pays a monthly benefit, usually up to 75% of your regular income, if you are unable to work due to illness or injury - including sporting injuries. These payments can be used to meet everyday living expenses such as your mortgage and other household costs.
Workers' Compensation does not cover injuries outside of work, and your sick leave may only be enough for the first few weeks of recovery.
Generally, insurers might offer income protection for people participating in non-extreme sports, like rugby, netball and football at either:
- Standard rates with a 90-day waiting period. Meaning you’ll have to remain injured and unable to work for a minimum of 90 days before your income protection benefit will start accruing.
- Reduced waiting period with premium loading. Your premium will usually increase by an additional 25% if you want a shorter waiting period applied to your policy.
Sports played professionally are usually excluded from income protection insurance because of inconsistent income and high risk of injury. Professional sports insurance in Australia is typically available from your sporting institution or specialist insurers, like:
Total and permanent disablement (TPD) policies generally have more extensive exclusions and limitations regarding a valid claim. For example, if you participate in mixed martial arts (MMA) at the time of your application, chances are you will have an MMA exclusion on your TPD insurance. Meaning, everything will be covered by your disability insurance policy, except if you became totally and permanently disabled while doing mixed martial arts.
Critical illness insurance pays a lump sum benefit if you are diagnosed with one of the illnesses or physical conditions listed in your insurer’s product disclosure statement (PDS). The payout can be used to help you during your recovery and pay for medical bills and rehabilitation costs.
How much does sports insurance cost?
Your life insurance rates will vary from company to company. For example, while some companies might deem rock climbing as an extreme sport and only offer policies with exclusions, another might consider it a less risky activity and just apply a small premium loading or even provide standard rates.
If your dangerous sport or hobby is regarded as high risk, you may have to pay a higher premium than somebody who does not participate in these pastimes, everything else being equal.
Depending on your insurer, the policy type and your high-risk activity of choice, it’s important to shop around and review what insurers have to offer before making an informed decision.
Questions about sports cover insurance
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