Insurance is a necessary part of most peoples’ lives, but there are times when an insurance company will not insure a person. Certain risks elevate the chances of an insurance company having to pay on a policy. The risks can be lifestyle choices, such as engaging in extreme sports, or the risks can be behavioral, such as smoking cigarettes. In addition, some professions have risk factors high enough to make insurance companies shy away from those in the professions, such as police officers or fire fighters.
Insurance companies dislike insuring people who engage in dangerous behavior, also known as “thrill seeking.” Thrill-seeking behavior includes such activities as skydiving, bungee jumping and high-speed car racing. These behaviors are more likely to cause injury or death than more ordinary activities. Athletes in certain high-risk sports also have difficulty obtaining insurance.
In the area of life insurance, engaging in certain behaviors makes it difficult to obtain coverage. For example, cigarette and pipe smokers, as well as individuals who use chewing tobacco, are sometimes unable to find insurance companies willing to risk insuring them. Because such behaviors are linked to serious illnesses and early deaths, many companies choose to steer clear of such coverage.
Because of the dangerous nature of certain occupations, some insurance companies choose not to provide coverage to people working in those fields. For example, an explosives handler might have difficulty finding insurance coverage, regardless of training he has undertaken or safety measures in place. Some companies also will not insure high-risk professions such as law enforcement officers or firefighters.
High-Risk Insurance Companies
Some companies specialize in high-risk insurance, and naturally such coverage comes at a cost. Companies offering high-risk insurance policies charge considerably higher premiums. The higher premiums help offset any costs incurred if an individual needs the insurance company to pay out a claim. Some health insurance companies offer insurance for individuals who engage in high-risk behavior and charge high premiums to those customers.