The Motley Fool Previous Page


Fantasy Football Insurance: Stupidest Money Move Ever?

http://www.fool.com/investing/general/2013/09/07/fantasy-football-insurance-stupidest-money-move-ev.aspx

Dan Caplinger
September 7, 2013

The primary purpose of buying insurance is to protect you against losses that could crush you financially. By that measure, the latest trend in insurance doesn't make the grade -- unless you're betting a whole lot more on your NFL fantasy team than you should.

Fantasy football has become a big-money pastime, with an estimated 25 million fans participating. High-stakes leagues can have entry fees exceeding $1,000. But even in free leagues, the costs of player information guides, subscription-based scouting services, and other types of paid advice and tracking services add up. Players spent $1.67 billion last year on those services, according to information collected from Fox Business from the Fantasy Sports Trade Association.

With so much money at stake, insurance companies have jumped on the bandwagon, offering policies designed to pay out if certain players get injured. One company offers payouts of up to $1,000 if selected top-100 players miss more than eight or nine games of the regular season, depending on the structure of your fantasy league. What you'll pay in premiums depends on how injury-prone a particular player is, ranging from 9% to 13% of the coverage amount.


Source: Gerald R. Ford Presidential Library and Museum, via Wikimedia Commons.

That's a lot to pay for coverage that might not get the job done. With some key players, all it takes is missing a game or two to cost you a chance at league victory. But if your player doesn't actually miss all those games -- even if he doesn't perform up to par -- then that coverage won't do diddly-squat to ease your financial pain.

Other stupid insurance moves
Fantasy football insurance isn't the only silly insurance product ever conceived of. Plenty of silly types of coverage have been offered over the years -- many from sellers that aren't, in fact, insurance companies -- and even gotten their fair share of buyers.

  • Scared that aliens will come to take you away? For more than 25 years, the St. Lawrence Agency has offered $10 million in UFO abduction insurance coverage for the lifetime price of $9.95. But don't take it too seriously; company president Mike St. Lawrence says that any payout would be pay out at $1 per year for 10 million years.
  • Worried that a meteor will crush your home? You probably don't need separate insurance, as your homeowners policy will typically cover falling objects like meteors or asteroids that directly hit your home. If a nearby hit causes shockwave-related damage, though, you could be out of luck.