How to Get Weather Insurance

You can watch the sky and hope it doesn't rain on your picnic, but sometimes the stakes are higher when you need good weather. When dollars are at stake and fair skies are crucial to your success and profitability, you might consider buying weather insurance.

Difficulty: Moderately Challenging

Instructions

1. Know how it works. The process is similar to a life insurance policy where the company takes into account age and health risks and compares your status to the odds on death among people with your characteristics. In the case of weather insurance, the company looks at the probability of a specific weather event happening at a given time. They use the same type of mathematical odds and historic data to determine if the coverage is a good risk for them.

2. Find a company that sells weather insurance. Not all insurers offer the coverage, but there are plenty of specialty companies who can underwrite the policy. Search the Web, ask other similar organizations for recommendations, check with your state insurance regulating agency or ask for a recommendation or list of potential names from a professional organization of insurance agents in your area. And make sure the company is legally allowed to sell coverage in your area or state.

3. Decide if weather insurance is right for you. Analyze your needs to determine if you can afford the coverage and whether something like a storm will hurt your bottom line enough to make it worthwhile. The price of weather insurance depends on the size of the policy, as well as the location and time of year of the insured event. The best candidates for weather insurance are those for whom a single event is a large portion of their annual proceeds where bad weather could have a serious negative impact on the organization's financial health.

4. Read the fine print. Weather insurance is a niche market, and you'll want to know exactly what is covered and what isn't. Look closely at what weather events are covered, and what you need to do to prove a claim.

5. Consider what can be covered. Some people use weather insurance to cover a meeting or event that would suffer huge losses if affected or canceled by a weather event. For example, an event planned for Florida during hurricane season might warrant a weather insurance policy to protect against losses if attendees cannot make it to the site. Farmers also buy weather insurance to protect against losses from heavy rains or damaging storms during the growing season.

6. Provide proof. The company that sells you weather insurance will demand proof that the qualifying weather condition occurred. Many policies state that you must provide independent proof from a reliable source, so identify who can document that information before you sign up for the coverage.