Diver's Insurance

Most divers only think about dive insurance at the last minute—usually just before a trip—which means that we buy or renew without spending much time calling around, comparing policies, or considering the tradeoff between price and protection. If we’d put out the time and effort, some of us might have discovered that our health insurance already provided adequate coverage for medical evacuation and chamber treatments, but then “time and effort” are the key words here.

Because I suspected that some divers might prefer health insurance to dive insurance, I called Blue Cross to ask for their recommendation, and found that the Blue Cross agents themselves offered different opinions about whether their plans covered medical evacuation and hyperbaric chamber treatments! Obviously, the safest way—and perhaps the only way—to assure coverage would be to ask your insurer to put confirmation in writing, but, based on my past experience, you’re more likely to get Elvis’ autograph by waiting for him to show up at your local Seven Eleven.

Still, while only your insurer can guarantee that you’re covered, there are some healthinsurance generalities that apply, depending on what type of coverage you have. If your policy is an HMO that is limited to inarea providers, it will probably not have any member facilities in the vicinity of dive sites, which could render your coverage worthless. And if you belong to a PPO, you may need to use nonmember providers in an emergency, and care would, therefore, be subject to higher deductibles and lower rates of reimbursement. Considering all of this, diver-specific insurance may have some appeal.

The Three Major Players

It’s not even that easy to pick the right insurance from the three principal dive insurers, Diver’s Alert Network (DAN), Professional Association of Dive Instructors (PADI), and Diver’s Security Insurance (DSI), all of which have been making changes in their policies, premiums, and underwriters recently. DAN substantially upgraded its policies a couple of years ago, eliminating all depth restrictions on its top-ranked “Master Plan” and doubling the maximum benefits payable for both evacuation and chamber treatments. Both DAN and PADI now offer enrollment in travel assistance organizations that coordinate not only diver evacuation and medical care but also provide these and other benefits for divers and their families—even in cases where the travel injuries are not dive-related. And all insurers have made changes in their insurance underwriters that could affect what the A.M. Best Company, the independent agency that has been rating the reliability of insurers since 1905, politely refers to as ”the insurance company’s ability to meet its obligations to its policyholders.”

All three companies provide an assortment of different coverage plans from which to choose. Both DAN and PADI offer three “levels” of protection, as reflected in the adjoining table, with both benefits and premiums increasing from plan to plan. DSI prefers to offer its coverage piecemeal, allowing divers to mix-and-match coverages for chamber treatments (Plan A), in-water injuries (Plan B), and medical evacuation (Plan C). (They also offer coverage for recreational boating injuries (Plan D), but their representative told Undercurrent that Plan D specifically excludes boating injuries sustained in the course of a dive trip.)

There are many similarities— and some differences. All companies generally cover only in-water injuries and most have depth restrictions, usually around 120 to 130 feet. All offer worldwide coverage—their representatives all assured Undercurrent that their coverage was widely accepted by chamber operators. (And PADI assured me that, if there were chambers that wouldn’t accept its coverage, the diver would be reimbursed for chamber expenses incurred.) And all companies offered only secondary coverage, which means that if the diver has a primary policy (such as a group health insurance plan) that provides comparable coverage, the dive policy will only pay for what the primary insurer doesn’t.

Unsurprisingly, regardless of differences, each company generally viewed its plan as offering divers the best mix of protection. DAN touted its lack of depth limitations, generally lower prices, and the fact that promoting diver safety and providing emergency medical assistance for dive accidents is its expressly-stated corporate mission. Or to put it as Barry Shuster, DAN’s director of marketing, did: “If a person is injured in a diving accident, most likely someone is going to call Diver’s Alert Network, because we’re the only 24-hour emergency hotline for that service.” He added that, if you have DAN’s insurance, DAN already has your information on file, making it easier for them to coordinate your evacuation and treatment. Unfortunately, DAN also states that, while 95% of its members carry its insurance, 1,030 of the 1,904 calls it received on its dive-emergency hotline in 1997 were from divers who were not DAN members, and a large share of these nonmember callers did not carry dive insurance. In practical terms, this translates into unnecessary suffering for injured divers, because the plane they’re hoping is already airborne may instead be checking into their gold cards’ line-ofcredit. Dr. Peter Bennett, DAN’s executive director, also worries about the many recompression chambers that are operating in the red because of the high percentage of noninsured divers. “The best thing you could do,” he told me, “is to encourage all divers to buy insurance—I don’t care who they buy it from.”

Of course, since DAN is a nonprofit organization, members’ dues payments support its recompression chamber program, but some of PADI’s insurance dollars go to support DAN as well. In fact, when PADI first began offering dive insurance, it agreed to dedicate a portion of its premium dollars to DAN, and it still describes itself as DAN’s largest single contributor. However, DAN says it now gets few new members through PADI and that PADI’s annual contribution to DAN has also been dwindling; currently, its quarterly donation is $8,750, which DAN says is far less than the contributions PADI made when it first began soliciting the dive insurance dollar.

Naturally, PADI has also pointed out advantages to its coverage, most notably the fact that its policies provide coverage on a per-incident basis and do not set a maximum lifetime “cap,” which means that any claims made against the policy would not reduce the amount available to satisfy future claims. Diver’s Security Insurance, on the other hand, saw its strength in terms of its mix-and-match policies, which means that divers needn’t unnecessarily duplicate coverage.

I couldn’t evaluate insurance without thinking about that old saw about a policy being worth the paper it’s written on. To that end, I wanted to check out the policy underwriters, especially since there had been changes in this area for all three companies. DAN’s underwriter for its three insurance plans is USLIFE Corp. (formerly All-American Life), a company with over $100 million in adjusted policyholders’ surplus that was rated A+ in Best’s 1997 Rating Guide. On the other hand, PADI opted on January 1 to change to Assured Investor’s Life, a much smaller ($10 million plus) company which had insufficient financial data available to qualify for a Best’s rating. DSI’s underwriter, Security National Life, was also unrated (in its case because it asked Best’s not to publish the rating Best awarded it) and also a smaller, $10-million-plus-sized company. Of course, smaller size and lack of a rating don’t necessarily mean that a company won’t still be in business at the time you need to file a claim, but a large company with an A+ rating is certainly on firmer financial footing.

Making a Choice

One of the benefits of joining DAN is $100,000 worth of coverage for medical evacuation, which can be expensive: reconfiguring a commercial plane to accommodate a stretcher can cost patients $15,000, and private air ambulance service can run over $50,000. And planes have been known to sit on the runway until they receive cold, hard cash—or a payment guarantee they’re willing to rely on. But if you’re not a member of DAN, or if you are unsure if your medical insurance will cover chamber treatments (chambers run in the $375 an hour range—but often repeat treatments are necessary) and feel you need supplemental coverage, which policy is best? Again, that depends on your needs, but DAN’s Master Plan has several obvious strengths. Its lack of depth limitations is certainly one. This might not seem terribly important to recreational divers who have no plans to dive below 120’, but remember that the nature of emergencies is that they wreak havoc with the best-laid plans. For example, what if a diver is caught in a downcurrent, attempts to rescue a buddy who has gone too deep, or simply passes out and sinks? In these cases, DAN’s Master Plan would provide coverage.

DAN’s Master Plan has other features that make me lean in its direction. It’s the only plan providing coverage for deeper, technical dives, it has adequate financial limits ($100,000 for medical evacuation and $125,000 for decompression illness and inwater injuries), and it is backed by an A+ rated company. Of course, if your health insurance already provides some benefits, you may wish to go with a smaller, backup plan like DAN’s Standard, PADI’S Silver, or DSI’s mix-and-match policies.