Tag Archives: wedding insurance

Getting Hitched Without the Hitch

When things go wrong with a wedding, they can go really wrong:

Valentine’s Day is the traditional end to what is known in the wedding blogosphere as “engagement season.” These engagements tend to last just over a year, averaging 14.5 months, according to theknot.com. Those 14.5 months are a whirlwind of activity during which couples are setting their date, working on guest lists and putting down deposits to ensure that everything goes smoothly on the big day.

But what if there is trouble in paradise—and someone calls off the wedding? Or weather prevents the parents of the groom from making it to the ceremony? Or the venue closes? Or the photographer gets lost? Or the caterer doesn’t show up? Or a drunk uncle damages property at the reception hall? What happens then?

See also: A Closer Look at the Future of Insurance  

The average wedding in the U.S. costs $35,329 (ranging from $12,769 in Mississippi to $88,176 in Manhattan). Pulling off a typical wedding involves a lot of variables–which all introduce the possibility of financial loss. There are multitudes of vendors: venue, caterer, baker, musician, florist, officiant, bridal salon, hair stylist, make-up artist and photographers to name a few, all of which will likely require a deposit. On the day itself, inclement weather could keep important guests from arriving or could even postpone the wedding. Finally, as with most social events that typically serve alcohol, guest behavior can cause unpredictable property damage.

For such an important life event, at such a high price point, it’s worth protecting your investment. Many insurance companies have wedding liability products to help. Wedding insurance can combine a number of different coverages and can range from only $95 to $500 depending on the types and level of coverage provided. Wedding insurance is easy to purchase online (or over the phone). For example, Travelers offers a Wedding Protector Plan and has a quiz to help gauge the riskiness of your wedding. Other insurers, such as WedSafe and Wedsure, also make it easy to find a quote and buy wedding insurance online.

The most commonly selected wedding coverage is liability coverage. This is typically purchased in situations where the selected venue requires the couple to cover property damage and bodily injury. In addition, certain venues may require the purchase of liquor liability coverage to protect against any alcohol-related incidents.

In the event of a necessary cancellation or postponement, financial losses can be mitigated by cancellation/postponement coverages. Massive amounts of rain and snow can cancel flights, close roads and even damage or close venues. A severe illness or injury could befall the couple or a parent, grandparent, child or officiant. Sudden military deployments can also cause wedding cancellations. All of these are “necessary” cancellations/postponements, and insurance exists to protect against any financial losses they may cause.

Some wedding insurance products will also protect against problems with the venue or other vendors going out of business, or vendors arriving late-or not arriving at all. Typically, the policy would reimburse the deposits, and, if alternate vendors can be arranged, the unexpected expenses incurred by the couple to avoid a full cancellation or postponement may also be covered.

Wedding insurance purchasers should be sure to check if a prospective policy will cover a subsequently canceled or postponed honeymoon, as well.

Additional wedding insurance provisions may include coverages for wedding attire, gifts and photography/videography. Attire coverage will pay to replace (or repair) any loss or damage occurring before the wedding or to reimburse a reasonable market value for any damage occurring after the wedding. This would cover, for example, airlines losing luggage with the wedding attire or the bridal salon going out of business before the wedding dress was delivered.

Gift coverage will reimburse the couple for loss or damage to wedding gifts before, during and after the wedding while at home, at the wedding or in transit. This would cover any physical damage to gifts while on display at the wedding or a theft of non-monetary gifts.

With respect to photography coverage, loss events can range from the contracted photographer not showing up, cameras being stolen (along with the film/digital memory card) or defective film/memory card use. This coverage excludes photographs not meeting expectations but does cover the costs of reconvening your wedding party for “do over” photographs or even a retaking of the official video at a restaging with the principal participants–including new flowers and a new wedding cake.

Not only can the cancellation or postponement of such an important event be monetarily taxing, but it can also be emotionally taxing. Some wedding insurance will even cover professional counseling (if recommended by a physician) for as long as a year.

All insurance policies have exclusions, and wedding insurance is no different. Engagement rings aren’t covered, but wedding bands are. Other common exclusions include anything asbestos- or lead-related, any abuse/molestation/harassment/sexual conduct (alcohol-fueled or not), fireworks, war, nuclear, neglect or any intentional loss.

And, no, for the most part, wedding insurance will not cover cancellations due to a “change of heart” on the part of the bride or groom; cold feet do not count as a trigger for this insurance.

See also: A Wedding’s Lessons on Customer Insight  

One insurer, Wedsure, will reimburse any “innocent party financiers, other than the bride or groom, if the wedding is canceled due to a Change of Heart by the bride or groom, 365 days or more from the date of the first covered event” [emphasis added]. However, because the average engagement length is only 2.5 months longer than this, it’s unlikely that there are many qualifying losses under this coverage.

Planning the perfect wedding can be stressful and expensive. The typical wedding costs more than the average mid-size car, and just as many things can go wrong with it. Purchasing wedding insurance can help relieve the additional stress of worrying about what happens when something goes wrong. It won’t do anything, though, about those cold feet.

Made in China: Some Surprising Innovations

The dawn of a new industry and the Next-Gen Insurer is unfolding, influenced by levers of change from within and outside the industry, accelerated by an explosion of data and new technologies and fueled by innovation. Some insurers are embracing innovation to inspire a renaissance of competitiveness and customer value, reinvigorating what made them successful leaders in the first place or making them new market leaders of the future. There is an unparalleled opportunity to ignite a new future that is powered by the human imagination – and that is what China insurers are doing, as indicated in a recent article titled “Chinese Insurance Policies Cover Some Really Bizarre Things,” by Clare Baldwin and Diana Chan in Business Insider.

While the insurance policies being created may seem bizarre to some, they epitomize the spirit of product innovation, personalization and customer engagement that are identified as key trends in SMA’s research, The Next-Gen Insurer: Fueled by Innovation. Understanding rapidly changing customer demographics, needs and expectations is critical. The ability to reinvent the way to develop, package and deliver products and services is vital for insurers if they are to be relevant, let alone successful, in today’s new digital world.

So why are these innovative policies important for U.S. insurers to understand and consider?

First, the inspiration for innovation can come from other markets and geographies. The inspiration may stimulate the imagination, prompting new ideas and uncovering opportunities that can be built upon. In many cases, the thinking in markets, such as China, with less-strict regulations can help identify, incubate and market test new ideas. With more customers researching insurance on the Internet, they will see these innovative products and ask for them … and ask you why you don’t have them, or something similar.

Second, taking an innovative approach to meeting smaller, more defined needs provides a great entryway to other insurance products. What a great way to introduce your brand as innovative and personal.

In general, with trends like the connected car, driverless car, connected home, connected health, sharing economy and more affecting the future of traditional insurance products such as auto, home and health, to name a few, insurers must be as creative as possible in adapting to the shifting landscape.

Interestingly, niche-focused insurance products like those in China have been emerging in other areas in Asia Pacific, with “hole in one” insurance, and in Europe, with “wedding” insurance. Zurich’s wedding insurance, which covers all of Europe and which covers the costs of canceling or postponing a wedding, is an example of such a product and has been a big success in terms of sales, marketing and brand recognition. In the U.S., Warren Buffett’s Berkshire Hathaway insured the $1 billion prize to anyone who accurately picked the winner of every 2014 NCAA tournament game, a competition sponsored by Quicken Loans. And while no one picked the winners in the brackets, Buffett and Berkshire Hathaway got a lot of coverage.

Each of these examples engages customers in a fun way while also meeting a specific need. They have an element of “the cool factor” associated with them, something profoundly needed in an industry deemed stodgy.

So, while the article about quirky Chinese insurance policies seems to take an “aren’t they cute” approach, the examples are actually highly relevant for the customers they target, not to mention helping to educate a large population about the broader value of insurance. The massive interest in these untapped nooks and crannies exposes the fact that there are ready customers, regardless of geography.

The insurance industry has offered personalized, unique products in the past to selected individuals, but not on a mass basis. Remember when Tina Turner’s legs were insured, David Beckham’s legs were insured, Keith Richards’ hands or Bruce Springsteen’s voice … all for millions of dollars? The difference here is that these are high-value, highly customized situations that were all one-off products. In today’s digital world, with the customer demanding personalized offerings, mass product personalization will increasingly be a key driver in product innovation, shifting the industry away from the legacy of mass production of personal insurance products. Fueling this change will be customer demographics and preferences.

With product personalization, insurers need to develop products or product components that customers can shape to their unique needs – within days or weeks – according to new customer expectations. The mass personalized products will include new services that will strengthen customer loyalty and retention. These trends will help insurers differentiate themselves in the market and open market opportunities that can drive revenue and profitability.

So instead of the “naughty child insurance” offered in China, maybe it could be child care insurance that covers the costs of holding the child’s place while the child is out because of significant illness. Instead of buying insurance for smog’s ruining your holiday, you could buy insurance against weather such as hurricanes or snowstorms that could cause cancellation or limits to your vacation. And instead of covering pregnancy before the honeymoon, insurance could cover a health issue or death of a key wedding participant that could affect the wedding plans, and insurance could be the thing that could make a painful time a little less painful.

Major forces are converging that are fundamentally changing the entire paradigm of insurance, creating the Next-Gen Insurer in the process. Today’s insurers are faced with choices that are more intense, complex and transformational than ever before. An era of new leaders will be determined by their ability to respond to change and become innovators, embracing and capitalizing on each new wave of disruption.

Some of the waves with vast possibilities will be product innovation and mass personalization. Insurers in other geographies are catching the wave of customer needs and expectations. Are you prepared to ride the wave of mass personalization? If not, your competitors will!