Beware these 5 insurance traps

By Liz Pulliam Weston

If you smoke like a chimney, you're going to pay more for life insurance. If you wreck your car, your auto premiums are going to soar. If you live on the edge of a wildfire-prone forest, you'll pay a lot more for homeowners insurance than someone in the suburbs.

All these situations make sense to us consumers. Greater risks, bigger premiums.

But insurers also care about other, seemingly obscure stuff: How you give birth, what you have in your backyard, what breed of dog you own, whether you max out your credit cards and how well your brain works.

If you don't know about these concerns, you may find yourself getting turned down for coverage or paying a lot more than you expect. A little knowledge can help you prepare and find a policy you can afford.

Here's what you need to know about:

Caesarian sections

If you're not covered by an employer plan and you're trying to buy an individual health insurance policy, you'll typically pay more for maternity benefits, which help cover the costs of carrying and bearing a child.

But maternity coverage may be more expensive, or not available at all, if you've had a child by Caesarian section.

C-sections typically cost insurers nearly $3,000 more than vaginal deliveries, and a woman who's had a Caesarian delivery in the past is more likely to have one in the future. Some insurers refuse to provide maternity benefits to such women, while others charge them more for coverage.

How much of an issue this is depends on where you live and on your individual circumstances.

For example, a woman in her early 40s may be deemed at low risk of having another child and offered a policy with a premium that's 25% to 50% higher than what she would have paid without having had a previous C-section, says Amir Mostafaie, a training manager for eHealthInsurance.com who is a licensed agent in all 50 states.

"If she's in her 20s or 30s, there's generally a higher chance she'll get pregnant again," Mostafaie says. "She may be issued a policy with exclusions" so that maternity coverage isn't included.

Where you live can also have a profound effect on your options.

In "guaranteed issue" states -- Maine, Massachusetts, New Jersey, New York, Vermont and Washington -- insurers aren't allowed to cherry-pick their risks or charge more for things like previous C-sections, Mostafaie says. In other states, insurers have few restrictions on what they can do.

"If you're turned down, you might not have other options," Mostafaie says.

If you're in the market for individual health coverage and this issue affects you, consider working with an experienced insurance broker familiar with various insurers' policies. You don't want to risk being turned down for coverage, as that can be a red flag for other insurers, so it's best to find out in advance which companies may penalize you.

Trampolines

Kids love them, but many insurers don't. Some will charge a higher rate to cover the increased liability for injuries, while others won't cover you at all.

"Even with the proper safety measures in place, trampolines are considered a big risk and account for more injuries requiring emergency-room treatment than backyard swimming pools do," says Loretta Worters, spokeswoman for the Insurance Information Institute, a trade group. "On average, trampoline accidents run about $300 million annually in medical, legal and insurance expenses."

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One of my readers bought a trampoline, complete with surround frame and safety netting, as a birthday present for one of her children. She didn't think to mention it to her insurer. When she switched insurance companies a few months later, the new insurer sent out an agent to take pictures of the property.

"Someone from the company saw the trampoline in one of the pictures from the agent," she wrote. To keep the coverage, "we had to take down the trampoline and write that we would not put it up on the property as long as they insured it."

Some insurers will cover a trampoline as long as it's inside a locked fence, to prevent unsupervised children from playing. Others will issue a policy that excludes coverage for injuries from the trampoline.

"Trampolines are what's considered an attractive nuisance, something that invites trespassers," Worters says. "No matter what precautions are taken, there is the possibility that a court case will find the owner of the trampoline guilty of negligence, even if the homeowner posts signs or takes preventative measures."

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