Weather insurance

[davidjohnson6]

In booking a flight many months in advance, I have to make a guess as to what the weather might be like based on the typical climate for a location in a given month. Of course, what the weather actually does is often very different from a 'typical' climate.

A couple of days before flying, I can get a fairly good idea from the web as to what the weather actually will do - which is far too late to book a cheap fare.

As an ancillary, have airlines considered offering weather insurance with a flight ? Buy the insurance and if the weather forecast is terrible (measured in some arbitrary way) you can cancel your trip and get some of the airfare back ?

Wholesale weather derivatives (e.g. heating and cooling degree days) are regularly traded wholesale - e.g. by energy companies, and event cancellation insurance (e.g. for weddings) can also be purchased, but the insurance broker I rang didn't understand why anyone would want to buy insurance against their holiday being a washout.due to torrential rain.

[Envoy320]

why on earth would an airline offer such a ridiculous insurance.....

IF they did....and paid out to just one person because the forecast was bad and the flight then continued to operate and some form of incident or accident were to take place....

Can you imagine the headlines....

It's a ridiculous suggestion and NO airline would even contemplate it.

[davidjohnson6]

Envoy - I'm not sure I understand why this has to be a ridiculous idea

Suppose that at in a major holiday zone (e.g. Costa del Sol) in May, there is a forecast for heavy rain and maybe the odd thunderstorm for a few days. Something like a 737 is more than capable of landing safely at Malaga in the wet, but going to the beach is miserable when it's raining - ie flight can operate but holiday is ruined.

The insurance is done entirely by a 3rd party insurer (the airline just exists to market it, similiar to car hire being offered on airline websites), so the airline sees no change in the T&C of the fare offered, but gets a sales commission from the insurer.

Captain and ATC still decide whether or not to operate a flight - it's just down to the insurer (e.g. Norwich Union) to decide whether a passenger who wants to cancel gets to make a claim on their policy because the rain makes sitting on the beach not much fun.

[Envoy320]

so what you really mean is.....when the weather forecasters are 100% accurate for the next fortnight....without exception.....then the insurance company can pay out on behalf of the holiday company (NO airline would have nothing to do with this whatsoever - i can assure you)

Find me a weather forecaster that is this accurate, no exceptions, and i guarantee i can make him into a multi-millionaire overnight.......

and if you still fail to see why this is such a ridiculous idea.....lay off the drugs or alcohol or whatever is making you think that way!

[rogervisual]

The weather forecast is always right, its just the timing they get wrong
sometimes.:)

[Envoy320]

if it's always right, why am i sitting under a clouded sky when the forecast was for clear skies.....

That was yesterdays forecast....

and you want insurance that pays out on a poor weather forecast for the start of May....(2 weeks time)

You have to laugh.....!!

[xtypeman]

Just imagine the force majure clauses in that policy no insurance company would take on the risk in any shape or form.

[uncomfortable]

There are travel insurances that offer (as an option) insurance against the lack of snow/piste closure for skiing holidays.
And I have seen one that insures against.... a hole in one!
I am not an expert, but I have been told that if a golfer makes a "hole in one", when he gets back to the clubhouse he has to buy a drink to all the people at the clubhouse at that moment, which can add up to quite a bit if the place is crowded.

If they can insure that, I am sure they can insure against hurricanes, tropical rains, monsoon weather and so on...

[davidjohnson6]

Weather derivatives have been traded since 1996 - see Weather derivatives - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Weather_derivatives)

They are now traded on a formal exchange in Chicago for various weather stations in the USA. This is of particular use to energy companies since a very cold winter or hot summer causes a big spike in demand for heating and air-con. There are 2 oft-quoted examples - one is a snowmobile manufacturer offering Canadian customers a money rebate in the event of there being little snow over the 1st 12 months of ownership. The other is a company running a chain of bars whose seating is mainly outdoors - if the summer was rainy trade was usually down, so they purchased insurance against a rainy summer. The data from formal weather recording stations is often publicly available - a definition of 'rainy' in summer for southern Spain might be defined as more than 50mm of rain in period of 30 days to avoid any subjective element on either side

There are insurers in the UK who will provide cover for a particular event (e.g. an outdoor wedding or village fete), often going by the name 'event cancellation' insurance.

Perhaps not as big as home or car insurance, but weather insurance is being actively done.

An insurance offering an advance cancellation option for a holiday need not cover the 14 days - it could perhaps be invoked on the day of departure by the national met office forecasting heavy rain (e.g. at least 2mm) every day for the 1st 5 days (which can be forecast with a good degree of accuracy) of a holiday - if it occurs, this would be enough to make a serious dent in anyone's summer holiday.

[paarmo]

Very interesting DJ but isn't this the type of financial gambling that got us into the current mess. Mind you at Lloyds there is always someone willing to quote you for whatever risk you want to take be it the first contact with aliens , living to 110 or Middlesbrough staying in the Premier League. All pretty long odds at the moment.

[Envoy320]

It's just not going to happen is it.....

shall we finish it there.....

[Hipennine]

As someone who has successfully claimed for piste closure/lack of snow, I can see the logic of an insurance that pays for lack of sun on a beach holiday - ie £xx per day when it rains for more than y hours, or cloud cover is more than z% for more than y hours, etc. However, this type of insurance pays out after you have suffered the lack, not before, and doesn't generally cover all the costs incurred in getting there, accommodation, etc.

[Envoy320]

ITS NOT GOING TO HAPPEN............

Insurance for cancelling a holiday in advance because of a bad weather forecast will not happen

Just be realistic and accept it.....

Its NOT the same as piste closure....as you say...that happens after the event.

Its not the same as event cancellation......that would be travel insurance for cancelling the holiday in the event of something such as illness/accident forcing the cancellation of the holiday.

A weather forecast which says bad weather (what would be the perception of bad weather...) NO insurance company would consider it.....

Now that really should be the end of it.

WHY this thread is in an airlines or airports forum i have no idea.....