[BostonCard]

Boston Card cites an interesting factoid about no college player ever collecting on loss of value insurance.  I don't know whether or not that is true but I believe it.  We have been asked about that with Henry, but I think the insurance is just a ripoff unless[b][/b] you are an Andrew Luck or a John Elway or [pick your favorite consensus, no-doubt No. 1 pick].  The problem is, unless you are THE unanimous No. 1 pick (or even clear top 5 pick), how do you prove damages?  The amount you would presumably collect under the policy would be the difference between what you would have been paid if fully healthy minus the amount you actually were paid as the lower draft pick. 

Speaking as one who frequently deals with insurance in my line of work, good luck proving that number.  You would need one or more experts [for example, a real NFL GM] to testify under oath that had you been fully healthy, our team would have picked you in the first round with our pick, but since you were hurt you dropped to the fourth round, or whatever.  Sounds easy, but I doubt you could find an actual GM to swear under oath that, by God, player X was definitely our first round pick, but for the injury.  It is NEVER that easy, again, unless you are talking about the extremely small handful of players, like Andrew Luck for example, about whom you probably actually could get a GM to testify about that. 

For a player like Henry, the insurance made zero sense, because his draft position was certainly not the sure-fire top 5 pick (particularly at the end of the 2013 season when he had been injured part of the year), and so measuring the "drop" would be virtually impossible.  When colleges like ND or anyone else pay for  the insurance, (a) I assume they probably get it cheaper than what the individual would pay, and (b) it is worth every penny if they get a valuable veteran player to stay on one more year.  It is basically window dressing that conveys to the player that the school really cares about you and we don't want your decision to stay to result in you making less down the road.  But it is not altruistic.

Eric

Thanks for sharing your family's experience.  FYI, Henry was picked as one of the season's best players in the Pac-12 by ESPN: http://espn.go.com/blog/pac12/post/_/id/...os-16-20.  Nice accolade.

The factoid comes from this article:

http://espn.go.com/nfl/draft2014/story/_...lue-policy

It offers some nice insight into how the process works:

Because loss-of-value insurance is connected to an injury policy, the only way an athlete can collect from falling in the draft is if it's as a result of getting hurt or being ill.

When Bridgewater bought the loss-of-value policy for less than $20,000, he was projected to be the No. 3 pick in the draft, and a source with knowledge of the policy said he will start to collect money if he falls out of the top 11.

With each drop in draft slot after that, Bridgewater will pick up hundreds of thousands of dollars.

The actual loss of value between being picked No. 3 in this year's draft versus No. 33, the first pick in the second round, is about $15 million. But if Bridgewater can prove that his slip had to do an injury or illness, the policy will result in him getting $5 million back.

It looks like the insurance runs about $4,000 per $1 million in lost salary, and can only be collected in conjunction with a disability policy.  Presumably, someone taking out the insurance would have to be worth more than the value of the insurance (so you are right, it makes sense mostly for first round players).  I'm not sure what the metric is to determine value, but it must be possible to have a football appraisal.

BC

[BostonCard]

Boston Card cites an interesting factoid about no college player ever collecting on loss of value insurance.  I don't know whether or not that is true but I believe it.  We have been asked about that with Henry, but I think the insurance is just a ripoff unless[b][/b] you are an Andrew Luck or a John Elway or [pick your favorite consensus, no-doubt No. 1 pick].  The problem is, unless you are THE unanimous No. 1 pick (or even clear top 5 pick), how do you prove damages?  The amount you would presumably collect under the policy would be the difference between what you would have been paid if fully healthy minus the amount you actually were paid as the lower draft pick. 

Speaking as one who frequently deals with insurance in my line of work, good luck proving that number.  You would need one or more experts [for example, a real NFL GM] to testify under oath that had you been fully healthy, our team would have picked you in the first round with our pick, but since you were hurt you dropped to the fourth round, or whatever.  Sounds easy, but I doubt you could find an actual GM to swear under oath that, by God, player X was definitely our first round pick, but for the injury.  It is NEVER that easy, again, unless you are talking about the extremely small handful of players, like Andrew Luck for example, about whom you probably actually could get a GM to testify about that. 

For a player like Henry, the insurance made zero sense, because his draft position was certainly not the sure-fire top 5 pick (particularly at the end of the 2013 season when he had been injured part of the year), and so measuring the "drop" would be virtually impossible.  When colleges like ND or anyone else pay for  the insurance, (a) I assume they probably get it cheaper than what the individual would pay, and (b) it is worth every penny if they get a valuable veteran player to stay on one more year.  It is basically window dressing that conveys to the player that the school really cares about you and we don't want your decision to stay to result in you making less down the road.  But it is not altruistic.

Eric

Thanks for sharing your family's experience.  FYI, Henry was picked as one of the season's best players in the Pac-12 by ESPN: http://espn.go.com/blog/pac12/post/_/id/...os-16-20.  Nice accolade.

The factoid comes from this article:

http://espn.go.com/nfl/draft2014/story/_...lue-policy

It offers some nice insight into how the process works:

Because loss-of-value insurance is connected to an injury policy, the only way an athlete can collect from falling in the draft is if it's as a result of getting hurt or being ill.

When Bridgewater bought the loss-of-value policy for less than $20,000, he was projected to be the No. 3 pick in the draft, and a source with knowledge of the policy said he will start to collect money if he falls out of the top 11.

With each drop in draft slot after that, Bridgewater will pick up hundreds of thousands of dollars.

The actual loss of value between being picked No. 3 in this year's draft versus No. 33, the first pick in the second round, is about $15 million. But if Bridgewater can prove that his slip had to do an injury or illness, the policy will result in him getting $5 million back.

It looks like the insurance runs about $4,000 per $1 million in lost salary, and can only be collected in conjunction with a disability policy.  Presumably, someone taking out the insurance would have to be worth more than the value of the insurance (so you are right, it makes sense mostly for first round players).  I'm not sure what the metric is to determine value, but it must be possible to have a football appraisal.

BC