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Insuring your body parts

Reported by Sarah Mills
Monday, October 8, 2007
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By Sarah Mills, ninemsn Money

Insuring body parts has a surprisingly exotic connotation, despite the morbid subject matter, thanks to the hundreds of celebrities who have chosen to insure their various bits and pieces over the past century.

The practice is said to have originated in the silent movie era, when the cross-eyed vaudevillian Ben Turpin took out a $20,000 policy against his eyes uncrossing.

Other celebrities were quick to jump on the publicity bandwagon: Betty Grable insured her legs for $1 million and Bette Davis took a policy against weight gain. Another flurry occurred in the '70s and '80s. Dolly Parton, for example, was said to have insured her 42-inch bust for $600,000 while Gene Simmons of Kiss reportedly insured his freakishly long tongue for $1 million.

Since then, the payouts for body parts have soared. Ugly Betty star America Ferrara recently insured her smile for $10 million while Michael Flatley of Riverdance was reported to have insured his legs for £25 million.

But how much can the average Joe insure his or her body parts for, and is it worth it?

Celebrities of course have a clear incentive to take out body parts insurance. The publicity alone arising from such a deal can easily pay for the premium, sometimes even the pay-out.

It's also a great way to remind adoring fans exactly what it is about a star that they love — a great tush, stunning legs, even a smile. The body part becomes synonymous with the brand.

Unfortunately, the sum of the average Joe's body parts is unlikely to match the sum of the average celebrity's body parts. You may think your legs rival Betty Grable's; or that your tongue has a good inch on Gene Simmons; or that you can confidently tell Dolly Parton to eat her heart out; but insurers aren't paying for the quality and size of body parts so much as their earning capacity.

Nor is body parts insurance easily available in Australia. Lloyds of London is usually the body-parts insurer of choice but Down Under, Lloyds does not deal in body parts.

According to Lloyds Australian representative Keith Stern, it is a product that is likely to be referred to specialist brokers.

However, most body parts here and overseas, are covered under more general insurance policies such as workers compensation and accident, dismemberment and disablement policies.

Financially, these policies make much more sense for the average person as they cover many possibilities in one fell swoop. Insuring just one body part would be proportionately much more expensive and it would be like insuring your car for hitting a car but not a truck or a wall. It doesn't make sense.

If you were to find a specialist broker prepared to insure a specific body part, you could expect it to cost an arm and a leg (excuse the pun). Even entertainment companies in the United States will tend to take the maximum available payouts on standard life and disability insurance for a given celebrity before turning to specialty policies.

It is still possible to put a price on body parts under general insurance policies. The payout you would receive from dismemberment tends to depend on how critical that individual part is to your ability to function as this relates to the level of disablement.

According to AMP's head of technical strategies for risk insurance Chris Kirby, trauma insurance may be an option in some instances.

"Trauma insurance does not cover body parts per se but it does cover specified conditions such as blindness and loss of speech," says Kirby.

At the low end of the payment scale is a payout from your state's workers compensation fund. This is unlikely to pay more than $60,000 for an average body part and one might argue that such a paltry figure could hardly be described as compensation at all.

The maximum permanent impairment claim under WorkCover as at 2007 was $220,000. A further maximum payout of $50,000 is available for pain and suffering.

The WorkCover site posts a table for maximum permanent loss (of body parts and functions) payouts for injuries made between February 1992 and December 2001 and serves as a reasonable guide to the value of body parts under workers compensation.

The maximum lump sum payment for a single permanent loss of a body part or function was $100,000 and the maximum payment for a multiple permanent loss was $121,000.

A summary of WorkCover's body part estimates follows:

  • loss of vision in both eyes was worth $100,000;
  • one eye was only worth $40,000;
  • the power of speech was valued at $60,000;
  • loss of hearing in both ears was worth $65,000;
  • hearing in one ear was valued at $20,000;
  • loss of the right arm above the elbow was worth $80,000;
  • loss of the right hand yielded $70,000;
  • the right thumb was worth $30,000;
  • the right forefinger was worth $20,000;
  • compensation for a leg was $75,000;
  • loss of a foot came in at $65,000;
  • a big toe was worth $22,000;
  • loss of both breasts yielded $47,000;
  • a penis was worth $47,000;
  • and the loss of both testicles came in at $47,000

A slightly more lucrative form of body insurance can be found in an accidental death and dismemberment policy but even these pale in comparison to celebrity payouts.

The third option is to sue through third party insurance or liability insurance. The case will hinge on proof of income and how crucial that body part is to your ability to earn. It may also cover emotional and social trauma.

26/11/2014 21:50Sydney, Australia. 26 November,2014
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