Student-Athletes: Is Your School Offering You the Right Insurance Policy?
Student-athletes have a lot to look forward to—playing the sport they love while receiving a great education, and potentially handsome compensation in the pros. A single injury or illness, however, can end your career or do catastrophic damage to your earning potential before you even begin a professional career.
Many student-athletes are now looking for ways to protect their futures, Loss of Value (LOV) and Permanent Total Disability (PTD) insurance are a growing segment of the insurance industry. The number of LOV and PTD policies in effect has exploded, and Division I schools are beginning to use them as a new way to attract athletes to their programs. A school that is offering you insurance coverage or helping you get a policy may seem well-intentioned, but beware of some of the potential pitfalls.
The Basics of LOV and PTD Insurance
If an athlete suffers an injury or illness that ends his or her playing career, the PTD policy should cover a percentage of lost income he or she would have received if the athlete could have gone on to play professionally.
LOV policies, on the other hand, are a little more complicated. Essentially, a LOV policy covers any loss of economic value an athlete suffers as a result of a serious injury or illness. For example, let’s say you’re a projected first-round pick in the NFL draft. Unfortunately, you tear your ACL in the second game of your senior year.
As a result, you wind up falling out of the first round of the draft. Instead of signing a $5,000,000 contract, you have to accept the 2018 league minimum of $480,000. An LOV policy would cover a percentage of the loss that your knee injury caused.
Many athletes have only a PTD policy, but some purchase an LOV rider along with a PTD policy, since it doesn’t make much sense to insure against a loss of value but not a career-ending disability.
A Case Study
In 2015, Morgan Breslin, a former University of Southern California linebacker, sued his alma mater after suffering a career-ending injury. He had purchased a LOV/TBD policy in 2013 and was injured later that year. Breslin was unfortunately not drafted in 2014 due to his injury. Despite projections that he would be a high draft pick in an early round, Breslin was never able to play professionally. When he filed a claim against his policy, the insurance company allegedly wrongfully denied the claim and refused to pay the benefits.
Breslin argued that USC failed to provide adequate guidance in choosing the policy, though it assisted him in obtaining it. In addition, Breslin claimed that USC failed to properly advise and properly direct the truthful completion of the claim application materials and did not manage the claim correctly when it failed to inform the insurance company about his injury.
To make matters worse, USC had helped Breslin obtain a bank loan to pay the substantial premiums on the policy, yet failed to disclose that the NCAA had authorized the university to pay the premium on his behalf.
The Breslin case highlights what at first may have felt like a token of appreciation and a long-term investment in his well-being. Breslin ended up with no athletic career and no benefits, despite a hefty sum in premiums.
Universities Are Now Offering Career-Ending and Drop in Slot/Draft Protection Insurance
The NCAA has not taken any action to stop schools from offering insurance assistance as an incentive to sign college athletes. As a result, the market continues to expand, and universities get more aggressive and creative with the way they offer insurance assistance to prospective athletes.
Universities Need Help and the Proper Legal Expertise When It Comes to Insurance
Think about it—universities are in the business of educating students. Their athletic departments are in the business of developing their respective programs. Universities need an expert who can understand and explain these complicated, specialized insurance policies, and compare various policies to ensure the school’s athletes are getting the best coverage possible.
Will Your University Help You With the Claims Process?
If you get injured or sick, expect to handle the insurance claim on your own. The university may take a hands off approach. At a time when you should focus on recovery, many receive a wrongful denial or discover they had an inadequate policy, and that your coverage was worthless.
Contact a Top-Rated Long-Term Disability Lawyer and Award-Winning Loss of Value Insurance Attorney at DarrasLaw
The bottom line is that these insurance policies are an investment in your future. Don’t throw away your investment by relying on the university to protect you. You need an experienced disability insurance attorney at DarrasLaw who understands these policies and will make sure the policy you’re getting offers the protection you deserve.
The nationally recognized litigation firm at DarrasLaw helps student-athletes. If you’re considering either Loss of Value or Permanent Total Disability coverage, one of DarrasLaw’s top-rated athletic insurance lawyers can help you understand the fine print and whether that policy is right for you. In addition, DarrasLaw stands by our clients every step of the way, from choosing a policy, through the claims process, and even into the courtroom if you received a wrongful denial or termination of your valid claim. For a completely free policy evaluation and free claim consultation, call DarrasLaw at 800-898-7299 or contact us online.