Insurance policies such as these are priced very simplistically for practical reasons allowing the product to be distributed widely on systems that may not be internet-connected at the time of sale. The pricing can be made more accurate reducing the potential for arbitrage but that needs to be traded off the additional overheads and ease of sale. Its not that insurers are stupid its more that we know some things are easier-solved with anti-fraud measures than fancier Rube Goldberg machines