Do You Need Additional Insurance for Recreational Sports?

Living your life to the fullest could mean taking risks, but in a manageable way. You wouldn’t jump off a bridge without triple-checking your bungee cord, for example, or take your motorcycle for a spin without the right safety gear.

The same is true when it comes to your insurance. Sure, it’s less exciting to secure financial protection for pulse-pounding activities than to actually do those things. But if you favor high-risk physical endeavors, you should make sure you’re covered in case things go awry.

Here’s what to consider to be adequately insured for the adventurous things you love to do.

Why some items and activities require additional insurance

Standard insurance policies — of any type — are written to cover specific types of losses as defined in the policy language. If your situation falls outside those terms, a claim might be denied — not because your behavior differs from a “norm,” but because the details of the loss don’t meet the coverage conditions in effect at the time.

For example, driving a car is risky, but lots of people do it, and insurers account for it in their risk model. Scuba diving is also inherently risky, but since far fewer people participate in it, health insurers often exclude scuba-diving-related accidents from their insurance policies. Reviewing your insurance policy can be useful, or you can ask your company rep or agent on what might and might not be covered.

If you do participate in a risky recreational activity that isn’t covered by your current insurance, you may need to buy more. That supplemental coverage may be obtained through additions to your existing policies, like your auto and homeowners insurance. Alternatively, you can buy a standalone insurance policy for just about any activity – even alien abductions, should your pastimes include chasing UFOs.

What additional coverage you might need

If you’re a thrill-seeker, there are two main types of additional coverages to explore: insurance for your specialized vehicles (if any), and insurance for you and your liabilities. Here’s what may, or may not, be covered under your existing insurance policies.

The information below is general in nature. When it comes to knowing what limits your insurer may place on coverage, your best starting place is your current insurance policy documents. Look for the section titled “exclusions” to see what your policy won’t cover — and if any of those scenarios apply to you.

Below are some common exclusions. If, after reading your policy you’re still in doubt, reach out to a representative or agent from your insurance company.

Insurance for additional vehicles

Insurers may place limits on the types of vehicles they’ll cover under your auto insurance, and for how much. High on the list of limited vehicles are ATVs, boats and dirtbikes..

Look in your policy documents for these common exclusions:

• Where you live: State law governs what types of vehicles have to be registered and insured, and insurers often follow suit in excluding those vehicles from standard home and auto policies. Thus, your dirtbike might already be covered if you live in Kentucky, which doesn’t require registration for these vehicles — but not in Colorado, which does.

• How you use it: Often, vehicle coverage only extends as far as your property lines, and only if you use it for specific activities. Your ATV might be covered if you only use it for farm-type tasks on your land, for example. But that coverage typically stops the moment you take your ATV camping or racing of of your property.

• How much it’s worth: Some vehicles, such as small boats, are often covered up to a specific dollar amount, typically around $1500. That may be enough for a paddleboat, for example, but not if you have a high-end fishing kayak.

Coverage for you and your liabilities

It’s not just the value of the vehicle itself (if there even is a vehicle involved) that you stand to lose with high-risk activities. Standard home and auto policies may provide liability coverage if you are found responsible for accidentally injuring someone or causing damage to their property. But that coverage is often excluded for certain types of activities, such as those involving vehicles that aren’t covered under the policy.

Let’s say you let a friend’s kid take your dune buggy out for a spin and they get into a serious accident. You could be found personally responsible for the child's medical bills, especially if the dune buggy itself is not covered under the terms of the policy.

Besides being on the hook for damages you could cause to someone else, participating in certain activities can invalidate your own coverage for life insurance, disability coverage or travel insurance. These kinds of policies often exclude being covered for activities like hobbyist aircraft piloting, BASE jumping and hang gliding. Even “common” activities may be among the exclusions, such as skiing, snowboarding and scuba diving.

What additional coverage may be necessary

There are several ways you might address gaps in your coverage, in both vehicles not covered and risks to you and others.

Specialized insurance for vehicles

If you own vehicles that aren’t covered under your current auto or home policy, you have two options for getting them covered. You can buy a separate policy, or buy a “rider,” also known as an “endorsement,” on another policy.

Some homeowner policies offer endorsements for things like golf carts or snowmobiles, for example, allowing you to add coverage without purchasing a separate policy. For things like ATVs, boats, RVs and motorcycles, you may be able to buy coverage just like you would for your car or truck.

Vehicle-specific policies typically offer the same protections as a full-coverage auto policy, but for the vehicle in question. You’ll generally be covered for damage to your vehicle, for example, and a certain amount of liability coverage in case you get in an accident, causing injuries.

Specialized insurance for you

There’s also the need to check if your health, life or disability coverage protects you, even when you engage in risky recreational activities.

Assuming your policy for each doesn’t clearly include those activities, consult your insurer, and be ready to provide a detailed description of what you do. Even if the company can’t cover the activities under your existing policy, they can advise on specialized policies that will.

It’s often possible to find personal policies for life and disability insurance, even if you regularly participate in dangerous hobbies like rock climbing and skydiving, for example. But not all insurers will cover those, even in a separate policy and the premiums may be very high, if they do.

For short-term risks, such as health coverage abroad while scuba diving, you may find a travel insurance policy that provides some protections, such as paying for emergency medical evacuation if you suffer a serious scuba mishap.

In either case — for regular hobbies or temporary forays — the key is to read the fine print. Make sure you know exactly what your policy covers and what it doesn’t.

The bottom line on insuring risky sports

It’s easy to get caught up daydreaming about the wind blowing through your hair or your next aqua adventure and forget entirely about the insurance piece. But just like you carefully plan the safety equipment for your outing, it’s good to spare a few minutes thinking about whether your finances are protected, too.

Balancing the risk versus the cost, in case anything goes wrong, can be tricky. That’s especially true if insurance isn’t a legal requirement for your planned outing. As noted above, the best place to start is by asking your insurance company or agent about what you’re covered against now, and what other coverage you may need to buy to be fully protected.