Prior to the meltdowns in credit default swaps, mortgage bonds and various derivatives, most people regarded insurance as a fairly sedate business. The actuarial analysis that goes into predicting when people will die, crash their cars or have a fire requires exceptional statistical skills, but most people's eyes glaze over at the thought. So why not take a little look at the wilder side of insurance? (Learn all the essentials of this industry in our Insurance Tutorial.)
Specialty Lines - A Quiet Name for a Wilder Segment
Some of the most interesting (and amusing) policies in the insurance world are grouped under what the industry calls "specialty lines". While terms like life insurance, car insurance, and flood insurance pretty much mean exactly what they sound like, specialty lines is more like industry code for "a large disorganized jumble of weird, idiosyncratic and yet still lucrative insurance policies".
Sell 'em for Parts
One of the most famous sub-categories of specialty lines insurance is body part insurance. Plenty of people have heard the stories of singers like Bruce Springsteen or Celine Dion ensuring their voices (or vocal chords) or actresses like Heidi Klum, Tina Turner and Betty Grable insuring their legs. Sometimes the performer takes the initiative, while in other cases it may be a company doing so - in the case of Heidi Klum, Braun - now part of Procter & Gamble (NYSE:PG) - took out the policy when Ms. Klum signed on as a celebrity promoter.
To read the full column:
http://financialedge.investopedia.com/financial-edge/0710/Weird-Insurance-Bets-Worth-Millions.aspx
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