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September 4, 2003

Insulin Pumps, Insurance/Costs

Question from Owendale, Michigan, USA:

My son's pump cost $7000 and since our health insurance company will only pay for a new insulin pump every five years, we are concerned about it getting lost or damaged. We are having a hard time convincing our homeowner's company to let us insure the pump. What are other people doing to insure their pumps? Is there a special company we should contact?


While I cannot think of any legal or regulatory impediment to insuring the risk of damage to or loss of the insulin pump, I do not think that any company will be interested in writing the coverage. Keep in mind that insurance is a lot like legalized gambling; the insurer is betting that they will not have to pay any claim, and they set the opening bet high enough to cover any possible loss. The consumer is betting that they will have a claim and collect on their insurance coverage.

First, the items are not widely used in the general population, so insurers have little expertise or institutional knowledge about them making it very difficult for them to establish underwriting or actuarial guidelines. Second, the pumps eventually wear out, creating opportunities for fraud. Third, coverage for replacement or casualty is subject to fraud because it is very easy for a policy holder to make their pump disappear. Even if you could convince your homeowner’s carrier to create a rider to cover the pump, I would guess the premium would be close to 25% of the replacement cost of the pump.

Additional comments from Lois Schmidt Finney, diabetes dietitian:

I just checked with my insurance company, and my State Farm homeowner’s policy will cover a pump as far as fire, theft, vandalism. (Actually this is true for anyone’s State Farm policy.) Pump companies themselves cover if the pump if dropped or somehow sustains some injury.

Additional comments from Dr. Alan Schorr:

Many of my patients using insulin pumps cover it with a supplemental plan that also covers equipment such a computers, jewelry, etc. One could ask the homeowners company in regards to this, however, the regular homeowners insurance does not get involved. How much the supplemental plan costs depends on the area.

Also, understand that the pump is warranted for at least four years. If anything happens, the company that sold the pump generally covers the problem. I have never had difficulty with any of my patients unless they lost the pump, then the supplemental plan took over.