An insurance company is set to start offering travel Insurance cover against extreme temperatures as heatwaves tear through Europe. Photo / 123rf
An insurance company is set to start offering travel Insurance cover against extreme temperatures as heatwaves tear through Europe. Photo / 123rf
Given the option, many travellers would probably choose to ensure they get warm weather while on holiday.
However, one start-up is banking on people wanting to insure themselves against this very thing.
Sensible Weather, a US-based insurance company is launching policies that insure travellers against heatwaves; something that could become a major industry within tourism.
Founded by former climate scientist Nick Cavanaugh in 2019, the start-up already offers travel insurance cover for disruptions caused by heavy rain and soon it will provide similar cover for heatwaves.
These kinds of policies would have come in handy for millions of tourists hit by Charon and Cerberus; two record-breaking heatwaves that hit Europe in recent weeks. Cities such as Sicily have reached 47 degrees, while wildfires are breaking out across Greece and Portugal.
In these instances, travellers have had to cut their trip short or adjust plans last-minute, which can be expensive.
For some travellers, this could mean prioritising cooler destinations in the future. For others, it will involve adding climate-related insurance coverage to the holiday budget and charging on with their desired destination.
Tourists shelter from the sun during a visit to the Acropolis, as a heat wave rips through Athens, Greece on July 20. Photo / Milos Bicanski, Getty
Sensible Weather’s extreme temperature policies will be released soon and undergo some modifications as they test them out, Cavanaugh told UK media outlet, i.
“We’ve found that travellers have different expectations for what’s ‘too hot’, depending on where and when they are going somewhere,” he said.
“So, as we roll the product out, we will modify our offering until we find the ‘sweet spot’ for a given customer, location and time of year.”
Sensible Weather’s rain cover agrees to pay customers out if they experience a certain level of rain while abroad, and the risk of this is calculated using historic and live weather data. Customers then receive an automatic payment every day rainfall is recorded at a certain level.
For a premium of approximately 10 per cent of the total trip cost, customers will receive a similar kind of compensation under the extreme temperatures policy but by using temperatures instead of rainfall.
Like rainfall coverage, it will also likely be structured into different tiers that cost different amounts, Cavanaugh added.
“For example, 35C or more could reimburse 50 per cent, and 40C or more could reimburse 100 per cent,” he suggested.
The goal, according to Cavanaugh, was to create coverage travellers could afford and the company could reasonably offer. This would also have a flow-on benefit for destinations that depended on tourism.
While long-term climate solutions were crucial, Cavanaugh said more immediate methods were also important, which included mitigating the financial consequences of tourists avoiding travel due to climate concerns.
“Our aim is to directly protect the consumer from these impacts, thereby indirectly protecting the hospitality industry at large by mitigating potential revenue loss from decreased consumer demand or satisfaction,” he said.
