We are a newly diagnosed family who take our son to the University of Michigan in Ann Arbor for treatment. He is eight and will be starting a pump on June 19. The University could not answer our question and suggested we ask you, which I’d take that as a HUGE compliment if I were you!

Our son will soon be running around with a $7,000 piece of medical equipment on his hip. Our homeowners insurance will cover the pump in our home or in our car and the pump company will cover it if is damaged, however, we cannot find ANY insurance company to cover the pump if it is lost or stolen outside of our home or car. I would like to think there is someone out there who has thought of this before us. I thought it was as simple as putting a rider on our insurance policy, but, due the medical nature, we have been told there is not one insurance company in the U.S. who will cover it. Could you please help us or point us in the right direction?

I am not surprised that you have found it difficult to find an insurer who will sell a policy or rider against loss, damage or theft of an insulin pump. Generally, property and casualty insurers will not insure wearable medical devices. First, there is the issue of dual coverage. As your question documented, many medical devices are paid for by health insurance or other medical benefit programs (e.g., Medicare). Under most circumstances, like product failure or defect, the device would be replaced by through the medical coverage. Your homeowner’s carrier will provide coverage in limited circumstances, but if a third insurer sold additional coverage, it would be difficult for the insurers to coordinate coverage or determine who is liable for the device and under what circumstances. Second, the cost of the initial purchase of the medical device is often highly subsidized or completely paid through the medical benefit program. Thus, the property and casualty insurer is at risk for covering the cost of an item whose original purchase was made by or reimbursed through other coverage. This creates an attractive target for fraudulent claims. Another issue would be ownership of the item. If property/casualty insurers extended coverage to wearable medical devices, medical programs or health insurers may attempt to retain an ownership interest in the device or promote rental of the item as opposed to the current practice of outright purchase by the covered consumer. As medical technology advances to provide devices to help those afflicted with disability or disease live longer, higher quality lives, the issue of who pays for the replacement of these devices will be one which the insurance industry will need to address.

DSH