Legislators in Florida recently made headlines by proposing a ban on heat-related protections for workers—including breaks to hydrate and get out of the sun. While the merits of that bill are questionable, especially as it potentially puts millions of outdoor workers in the state at risk, the private sector is likely to continue looking for new and innovative ways to offer protection from unseasonable or extreme weather events.
One startup is already doing it.California-based Sensible Weather recently announced that it’s providing travelers and vacationers protection against high heat. The company sells “weather guarantees,” which are effectively insurance policies against extreme or inclement weather. While the weather guarantees, at this point, are geared toward people taking trips or going on vacations, the potential for other use cases in an era of climate change is numerous.
A weather guarantee “is like a guarantee on your experience,” says Nick Cavanaugh, the founder and CEO of Sensible Weather. “So much of travel and outdoor events is dictated by what happens with the weather.”
He adds that a huge percentage of travel is “people going somewhere to experience a climate in a particular location—their entire trip is contingent on getting good weather, getting the snow that they want, or it not being too hot or cold.”
As such, travelers buy a weather guarantee that offers reimbursement when the weather doesn’t pan out. In that sense, the company is literally making bets against the weather.
BAD WEATHER MEETS OPPORTUNITY
Cavanaugh, who has a background working for hedge funds and assessing weather risks, says that founding Sensible Weather allowed him to “marry his passion for weather analytics and being outside with the financial part of it, and build products around it that ultimately benefit consumers in a way that hadn’t been done before.”
The company gained significant traction during the pandemic, Cavanaugh says, when people were purchasing weather guarantees to cover their costs if a planned camping trip was canceled due to rain. Partnerships with waterparks, interestingly enough, have been another area where the company has found success, as people buying tickets to waterparks want coverage in case their plans are canceled due to thunderstorms or other weather events.
In that sense, perhaps the closest thing that does exist to the weather guarantee is travel insurance, which notably does not cover weather-related trip disruptions. As for the cost? Weather guarantees are usually sold as a part of the booking process—similar to adding travel insurance when booking a flight or hotel room—and cost between 8% and 12% of the total booking price.
For example, if a customer were booking a campsite in Yosemite National Park online for three days, and at a total cost of $250, they would have the option of adding a weather guarantee to their order for, say, $10, which would refund them for the price of their campsite if it rains for three hours during any day of their stay.
SUNNY SKIES AHEAD?
Sensible Weather relies on a “system that assesses odds of various weather events happening,” Cavanaugh says,” and calculates those odds “on the fly” to determine the eventual price of a weather guarantee. It’s catching traction with travelers, too, as he notes that the company has seen 40%-50% opt-ins at waterparks, which is Sensible Weather’s “best-converting vertical.”
The company is also making inroads with numerous partners. It’s available through multiple hospitality companies, camping and outdoors companies, waterparks, resorts, and golf courses. It’s even inked a deal with the PGA to cover PGA-affiliated golf facilities, allowing golfers to get weather guarantee protection for their tee times.
But perhaps what’s most interesting about weather guarantees is their possible uses beyond travel and resorts. It’s not too far-fetched, for instance, to think about how weather guarantees could be used as a protection for workers or businesses struggling with extreme heat or cold. Private gatherings or events are another potential use case. “I think weddings are a crazy, obvious target,” Cavanaugh says.
For now, though, Cavanaugh says Sensible Weather is focused on travel. “At the end of the day, one of the things that really motivates me as a climate scientist is that we use really simple products meant to offset risk for a consumer,” he says. “You’re offsetting risk, encouraging travel, and merchants don’t incur any of the expense.”
“This is resilience,” he adds. “You go, and whatever happens, you’re covered.”