Hazardous pursuits and insurance underwriting

Pastimes are underwritten because they change the shape of the risk, not because insurers disapprove of them. The questionnaire for each activity is short and specific, and it is built around the variables that actually matter for that pursuit — how often, how deep, how high, how fast, and whether you compete.

The two common outcomes are a loading and an exclusion, and they are very different propositions. A loading means you pay more and remain fully covered, including while doing the activity. An exclusion means you pay ordinary rates and are not covered for anything arising from it. Which is better depends on how central the activity is to your life and how much the loading costs.

A third possibility is worth knowing about: for some activities an insurer will accept the risk without either, particularly at low frequency or in a recreational rather than competitive form. That is one reason to declare accurately and let the questionnaire do its work rather than assuming the worst.

The generic question opens a specific one. These are the variables underwriters ask about most.

• How often you take part, expressed as times per year.
• Whether you compete, and at what level.
• Your qualifications, certification or licence, and your experience.
• The specific parameters of the activity — depth, altitude, engine size, height, terrain.
• Whether you take part in an organised, supervised setting or independently.
• Whether you have ever had an accident or injury related to it.

What the insurer does with the answers

• Applies a per-activity loading, often expressed per $1,000 of sum insured rather than as a percentage.
• Or applies an exclusion for claims arising from the named activity.
• Or, at low frequency and recreational levels, accepts the risk without either.

Because these ratings attach to the activity rather than to your health, they change when the activity does. If you stop, or reduce frequency substantially, that is a legitimate basis for asking for a loading or exclusion to be reviewed. Insurers will want a declaration and will usually ask when you last took part.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• That failing to declare a pastime is a disclosure issue that can affect the whole policy, not just an activity claim.
• Whether the outcome offered is a loading or an exclusion, and whether you can choose.
• The exact wording of an activity exclusion, and whether it extends to related activities.
• That some policies contain standing exclusions for certain pursuits regardless of what you declare.
• That giving up an activity is a basis for asking for the rating to be reviewed.

Every New Zealand insurer writes applications involving hazardous pastimes to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Insurer appetite for particular pastimes differs widely, and some will accept without loading what others exclude.
• An adviser can obtain indicative terms for your specific activity profile before an application is made.
• Where a loading and an exclusion are both available, an adviser can price the trade-off properly.
• If you stop the activity, an adviser can put the review request to the insurer.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.