How to protect your finances as a scuba diver
How does Scuba Diving affect your life insurance policy? Is Scuba diving a sport which should be disclosed to an insurance company when applying for life insurance?
Failure to disclose to your insurance company that you Scuba dive may impact on your life policy cover. Legally your insurer may void your contract whether your non-disclosure was intentional or not.
In practise, insurance companies tend to review non-disclosure claims as either Innocent, Negligent or Fraudulent:
- Innocent non-disclosure – If there is no clear question on an application form that relates to sports, pastimes or relating to your scuba diving, then a claim may well be paid in full. This would however be on an ex-gratia basis rather than by contractual right.
- Negligent non-disclosure – This is where a customer has not taken enough care in completing the application form. Where negligent non-disclosure occurs an insurance company can refuse to pay out, but will often consider the amount of cover which should have been in force according to the premium paid. If an underwriter considers that your premium should have been increased because of your scuba diving activities then the amount paid out would be proportionately calculated, i.e. if they consider that the premium should have been doubled, then approximately half the insured cover would be paid out. Again, any payment made is entirely discretionary.
- Fraudulent non-disclosure – This occurs when someone knowingly gives false information or deliberately withholds information which would have had an impact on the premium the insurance company would have charged. You are wasting your money, insurers can refuse a claim even if you die due to a non-diving related event.
NB. Negligent and fraudulent non-disclosures are difficult to distinguish between, and can therefore also result in any claim payout being delayed at the very least.
For your consideration
For those who have already taken out policies check that the insurance company is aware that you dive and check that the policy covers you for scuba diving.
If you are considering taking out a policy make sure that you disclose the full extent of your diving.
If you are about to go scuba diving abroad then be absolutely sure that the company is aware that you do dive abroad. This is a material fact of information.
by David Hallam, Director of Scuba Financial Services