Browns tight end E.J. Bibbs collects on loss-of-value insurance policy

Former Iowa State tight end E.J. Bibbs has become just the third NFL player to collect on a loss-of-value insurance policy.

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Browns tight end E.J. Bibbs has collected a $550,000 loss-of-value insurance policy, SI.com has learned.

Keith Lerner, president and CEO of Total Planning Sports Services, wrote Bibbs’s policy and confirmed the former Iowa State star’s collection to SI.com.

Bibbs becomes just the third player to collect on a loss-of-value policy. Last October Browns cornerback and former Oregon standout Ifo Ekpre-Olomu collected a $3 million policy after slipping from a first-round projection to a seventh-round selection in the 2015 draft. Ekpre-Olomu tore his ACL two weeks before the Ducks took on Florida State in the Rose Bowl. Former USC running back Silas Redd collected an undisclosed amount on his policy when he went undrafted in 2014 after suffering a knee injury during his final college season.

Bibbs underwent knee surgery before his final season at Iowa State in 2014 and took out his policy in August 2014. Despite earning All-Big 12 honors and being projected as a late-round pick, Bibbs went undrafted in the 2015 draft but signed with the Browns as a free agent. He played in seven games for Cleveland in 2015, catching one pass for seven yards.

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Loss-of-value polices have become more popular among top-tier NFL prospects in recent years, with more schools willing to help pick up the costs. Schools have begun to dip into NCAA-approved Student Assistance Funds to help pay those premiums. While Lerner said Bibbs paid for his policy on his own, Oregon contributed to Ekpre-Olomu’s policy in 2014, along with policies for Heisman Trophy-winning quarterback Marcus Mariota and center Hroniss Grasu.

“The trend is for the schools to pick up part of the policy, if not all of it,” Lerner said. “It’s become a part of college athletics in terms of recruiting, in terms of keeping the student-athlete for an extra year.”

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But loss-of-value policies haven’t come without controversy. Former USC wide receiver Marqise Lee is suing Lloyd’s of London for $4.5 million after the insurance company allegedly refused to pay Lee when he slipped to the 39th pick in the 2014 draft. Lloyd’s of London reportedly claimed Lee misled the company about his injury history.

Last month at SEC spring meetings in Destin, Fla., Arkansas coach Bret Bielema criticized loss-of-value polices. “I was just with a couple of my former assistants, who are now head coaches,” Bielema said. “They’re beginning to see it as well. Last year I had seven or eight guys that were contacted about having insurance placed on them. Well, when you’re a 20-year-old kid and somebody tells you you’re going to get insured for $2 million, who wouldn’t want that or say it’s kind of cool? ‘I must be really good.’”

“[Running back] Jonathan Williams, we took one out on him,” Bielema continued. “He became injured. I believe he would have been picked on the second round at minimum, and he got taken in the fifth round. He didn’t collect one dime. He was insured for not only loss-of-value, but also insured for permanent damage. It didn’t help him at all.”

But Lerner said the collections of Bibbs and Ekpre-Olomu prove the inherit value of these polices. “I hope the loss-of-value is here to stay for the college athlete,” Lerner said. “I think the chances these days, with modern medical science, is that somebody is going to sustain that injury and slip down in the draft versus the career-ending type injury that we insured for so many years, and still do.”