In 1990, the NCAA launched the Exceptional Student-Athlete Program, a program that allows college athletes to purchase disability insurance.
The idea was first brought to the forefront by Virginia Athletic Director, Dick Schultz. Schultz filed a lawsuit on behalf of student-athletes in the late ‘80s, claiming that the athletes are entitled to be protected by insurance. In 1987, Schultz was introduced as the second Executive Director of the NCAA, and by 1990, Schultz created the Exceptional Student-Athlete Program.
Schultz named one insurance underwriter for the program who could write the policies for NCAA Student-Athletes.
However, it was later learned that Schultz was paid $120,000 by an insuring lobbying firm to file the original lawsuit.
“This thing was kind of corrupt from the start,” said Bryan Fisher, a Baton Rouge insurance attorney. “The roots of all this and the environment in which it is structured and exist is horribly corrupt, and it exploits the athletes.”
Schultz would resign as NCAA Executive Director in 1993 after suspicion arose surrounding irregularities during his time as Athletic Director of the University of Virginia.
Unlike Schultz, the insurance program was here to stay.
The program is considered first-party insurance. The party buying the insurance is the one the insurance covers. First-party insurance requires the company to go above and beyond to pay the insurance claim if they are given reasonable proof to do so.
Under the NCAA’s program, an athlete can purchase disability insurance.
“The two types of insurance that you can get are disability, which means total disability, and loss-of-value,” Fisher said. “Loss-of-value is what is called a rider to the disability coverage. That means you cannot buy loss-of-value coverage without first buying disability coverage.”
Loss-of-value insurance, which is not provided by the NCAA, but by private insurance agencies, has two distinct issues according to Fisher. One is payment, and the second is the fact that none of the insurance policies have been vetted by the NCAA.
Fisher said that the premiums these athlete have to pay are “outrageous,” and he even used former LSU running back Leonard Fournette as an example. Fournette paid a premium of $200,000 for two years of insurance coverage.
“The NCAA rules prohibit student-athletes from getting any type of economic benefit from anybody aside from their family,” Fisher said. “The first step in the evolution of paying for it was the banks developed a program to allow the parents to sign on an unsecured loan to finance the premiums.”
Fisher did say that the NCAA has made strides in making the insurance coverage more accessible and financially feasible. Student-athletes are now allowed to borrow against their future earnings, and created a student assistance fund, which allows for schools to pay for all or part of an athlete’s premium.
“The NCAA has some very basic requirements for what [loss-of-value] coverage must be,” Fisher said. “But they do not approve the form policies, the policy language differs each year from company to company, and the coverage is very very thin.”
Fisher said that 99 percent of the claims are loss-of-value claims, and the total disability coverage almost never comes into play.
“The policy language only used to cover the time between when you finished your last game in college and when you were drafted,” Fisher said regarding the total disability coverage. “What are the odds that after you finished the contact part of your season and before you start your contact part of the NFL that you are going to become totally disabled? It’s zero. The coverage is crap, it is horrible.”
Fisher cited the case of South Carolina star running back Marcus Lattimore as someone who was able to file a claim for total disability coverage.
“We showed that their policy coverage was so thin, that it was virtually non-existent,” he said. “They sold him a bag of nothing. Their policy was so bad, that it had to be thrown out, and he had to be given the maximum amount of coverage.”
Fisher said that he has never lost one of these cases, and he does not think he ever will.
While Fisher shows little faith in total disability coverage, he believes every projected draft pick should get loss-of-value insurance. However, the only way to get loss-of-value insurance is by purchasing total disability coverage first.
“Loss-of-value is the coverage you really need,” Fisher said. “It should be the primary coverage not the rider. What it does is it protects the athlete from a decrease in his market value due to injury.”
One of the first lawsuits regarding loss-of-value insurance involved Fisher, and his client Morgan Breslin, a former football player at the University of Southern California.
Breslin suffered a torn abductor muscle at USC, and went undrafted.
“USC took away the insuring process from the family,” Fisher said. “The compliance department handled everything. They gave him one policy, one choice, one loan option, one everything. Because of that he got less coverage than he should have, and he was not informed of anything.”
Fisher said that he and Breslin have won the claim against the insurance company, and now they are going after the USC. He said if they win the lawsuit against USC, there are plans to file lawsuits against a vast amount of other schools on the same basis
“There is a lot of bad [schools] out there,” he said. “Auburn is horrible, Tennessee is horrible, Penn State is atrocious, USC is atrocious, Ohio State is just grossly atrocious. They do everything through NCAA compliance, and the kids don’t know anything.”.
Fisher added: “They just know they wanted insurance, so someone in compliance has said this is the insurance because they have an agent they are used to dealing with since they have a relationship with them. The kid has no idea what he is getting. Then he signs the note at the bank to get a loan for the premium and he has no idea what he is signing. There is no one there to advise these kids, they are left on their own.”
Fisher mentioned LSU and former coach Les Miles as examples of a university doing correctly.
“Coach [Les] Miles really cared about those kids, and this one of things he looked out for,” Fisher said. “He made sure these kids were aware that these programs were out there. He let them know how the premiums could be paid. He was really good about it, and LSU is really good about that. They give their student-athletes the full spectrum of information, so LSU is one of the good guys.”