The costs associated with these types of products are based on decades of historical weather data at your location, date(s) and hour(s) applied. A percentage rate is derived from the historical data to which you then multiply the policy’s agreed coverage limit. For example, a rain insurance coverage for a one-day outdoor concert, fair and/or festival may require a rate of between two (2%) and ten (10%) percent of the total limit of insurance requested.
As a basic rule of thumb, the greater the number of coverage hours, the higher the premium. Secondly, the lower the insured rainfall threshold, the higher the premium. Also, the greater the insured limit, the higher the premium. We are proud to offer very competitive rates from multiple carriers.
The limit of insurance is critical as the premium paid for this coverage is directly related to the amount of coverage needed (i.e., the higher the limit of insurance the more expensive the premium – all things being equal). Each client may employ a slightly different approach identifying how much insurance is needed. Many consider the following: (a) unrecoverable expenses, (b) total revenue or (c) profits.
Because rain insurance does not require a cancellation of your event, think about how a rainy evening may affect expected the revenue generated by walk-up patrons, concessions, parking, merchandise, and carnival or vendor splits. A rain-filled evening may not be a total loss, but you could easily lose half of your anticipated income from all sources.
Rarely. All events are different as are the risk-reduction goals of the insured. Although the choice is ultimately up to the insured, we typically recommend that you begin your coverage two or more hours prior to the scheduled beginning of the event of concern, and continue cover through at least the half-way point.
For an evening event, such as a concert, people generally make their decision to attend an event in the hours preceding, and if it is raining at that time, they are more likely to refrain from attending. Also, once you have reached the half-way point of an event, those that were planning on attending are most likely at the event by that time.
As another example, consider a fair or festival that may start at noon and end at 11pm. Because the event hours are long, it becomes expensive to insure for the entire day. In this scenario, the event has a couple of different options: (a) focus on the hours of the highest foot traffic and ticket sales (i.e., 1pm to 6pm) or (b) focus on the hours of the featured entertainment where there is significant attendance (i.e., 6pm to 10pm) and the most impact on revenues.
There are three options available when insuring rain accumulation, and one must be chosen by you when you purchase your coverage:
Closest National Weather Station – The station closest to your event will be identified at the time of quoting. This is a free service and in the event of a claim inquiry, the observations directly from the weather station closest to your event will be obtained and that data will determine if a claim was triggered.
Independent Weather Observer (IWO) – An IWO is an individual that you would hire and is qualified to take weather measurements. Typically, they must be a meteorologist or have some training/experience in taking weather observations, and pre-approval by the underwriter is required. These individuals can be found at your local university, TV station, Radio station, etc. Once the individual fills out a qualification form that HCCSU provides at time of binding he/she will be approved/declined for usage. The insured will be responsible for hiring and paying the IWO per the IWO’s terms, the cost of which can range from $35 – $100 per hour. Spectrum may be able to assist you in locating a qualified observer.
Third Party Forensic Meteorology Service– As an alternative to the nearest national weather service station (which may be too far away) or an on-site weather observer (which may be too expensive), a third-party Doppler Monitoring Service is available as a pre-approved alternative for remotely measuring your insured peril. This service is provided by a third-party company, the designation of which varies by carrier and/or data needs. The fee for the service varies by company and weather variable, but is typically $50 – $75 per date, regardless of the number of coverage hours. The service provides highly accurate location specific measurements by using the latest in weather technology, along with weather products from the National Weather Service along with worldwide data services. The service provides forensic measurements by monitoring Doppler radar data at your specific event location (Street, City, State, & Zip Code) or where necessary other recognized weather measurement methodologies.
No. Although rain insurance is commonly referred to as “Rain-Out” insurance, there is no requirement to cancel your event. The rainfall must reach or exceed the threshold specified in the policy for you to collect the insured amount for that day. If that threshold is reached, then a claim for the full limit of the coverage for that day will be paid, whether you cancel, abandon, curtail, or postpone your event, or even if the event is still able to continue.
There are several types of rain parameters available in a policy; rain accumulation, stepped rain accumulation, dual-period accumulation coverage, and nonconsecutive dry hours.
a) Traditional Rain Accumulation Coverage. With this type of rain insurance policy, a specific amount of rainfall accumulation
is indicated in the policy. If this amount of rainfall is reached or exceeded during the coverage hours, the insured receives a claim in the amount indicated as the sum insured. An example of such coverage may be:
Coverage Date: August 15 Coverage Hours: 6:00 PM to 10:00 PM Rain Threshold: 0.25 inch Sum Insured: $10,000
With this coverage in place, if 0.25” or rainfall occur between the hours of 6pm and 10pm, the policy will pay a claim of $10,000.
b) Stepped Rain Accumulation Coverage. Functions in a similar manner as traditional rain accumulation coverage, however the coverage has up to three rainfall threshold options, each with its own insured amount. As rain continues are reaches a threshold, that insured amount is paid. In essence, the more it rains, the greater the claim. An example of such coverage may be:
Coverage Date: August 15 Coverage Hours: 6:00 PM to 10:00 PM Rain Threshold #1: 0.10 inch Sum Insured #1: $2,000 Rain Threshold #2: 0.25 inch Sum Insured #2: $6,000 Rain Threshold #3: 0.50 inch Sum Insured #3: $12,000
Aggregate Daily Sum Insured = $20,000
With this coverage in place, a claim of $8,000 would be paid if 0.30” of rainfall occurred between the hours of 6pm and 10pm, as both rain thresholds #1 and #2 were exceeded, and both sums insured, $2,000 and $6,000, were triggered.
c) Dual-period Rainfall Accumulation Coverage. Unlike traditional rain accumulation coverage, this option allows you to choose two separate coverage periods, each with its own rainfall threshold. If rainfall accumulates to the threshold in either period, the policy pays the claim. However, it does not pay two claims if both thresholds are met. This coverage is designed for events that have rainfall exposure during the day, for an event scheduled in the evening, such as a tractor pull or dirt-track racing event. An example of such coverage may be:
Coverage Date: August 15 Sum Insured: $10,000 Coverage Hours #1: 9:00 AM to 6:00 PM Rain Threshold for Coverage Hours #1: 0.50” Coverage Hours #2: 6:00 PM to 10:00 PM Aggregate Daily Sum Insured = $10,000
With this coverage, a claim of $10,000 would be paid if 0.50” or rainfall occurred during Coverage Period #1 OR if 0.20” of rainfall occurred during Coverage Period #2. However, a claim of $20,000 would not be paid if both occurred.
d) Nonconsecutive Dry Hours. With this type of rain insurance policy, a specific number of nonconsecutive “dry hours” is indicated in the policy.
Additionally, the amount of rain accumulation that defines “dry” is defined. The “hour” refers to an o’clock hour, and it is not required to rain for a complete o’clock hour, only that the rainfall that does occur exceed the amount defined as a dry hour. Therefore, if the dry hour definition is 0.01”, and it rains from 4:45 to 5:15, with at least 0.01” occurring in the 4 o’clock hour and the 5 o’clock hour, then, even though it only rained for 30 minutes, both hours would no longer be considered to be a dry hour. If the number of “dry hours” is less than the specified amount, the policy pays a claim in the amount indicated as the sum insured. An example of such coverage may be:
Coverage Type: Nonconsecutive Dry Hours Coverage Date: August 15 Coverage Hours: 3:00 pm to 10:00 PM Dry Hour Definition: less than 0.01 inch Insured Dry Hours: 5 of the 7 hours to be dry Sum Insured: $10,000
With this coverage, a claim of $10,000 would be paid if it rained at least 0.01” in at least three of the seven coverage o’clock hour, therefore leaving only four of the seven hours as dry.
It is possible to protect yourself from nearly any measurable weather peril. Some of the more popular alternative insurance products created for perils such as severe adverse weather, temperature, heat index, wind speed, lightning, and hurricanes.
We work with several carriers and therefore can usually provide the best balance between cost and coverage. Depending on the carrier that is providing the policy, you must purchase weather insurance a minimum of seven to ten days before the first day of the coverage.
We currently offer automatic, online quoting and purchasing for traditional rain accumulation and dry hours coverage, Golf Tournament Adverse Weather Causing Cancellation Insurance, and Big Day Umbrella which is a wedding day rain insurance policy. Prize Indemnity Insurance for golf, basketball, football, and hockey related contests may also be automatically quoted and purchased online. For other coverages, simply fill out the appropriate on-line application on Spectrum’s web site or give us a call to discuss your needs.
The online quotes are instantaneous, however occasionally some additional review may be necessary.
For other coverages, simply fill out the appropriate on-line application on Spectrum’s web site or give us a call to discuss your needs. Depending on the needed coverage, the quote will usually be available within two business days.
The rain insurance policy, and other weather coverages, is provided on a stated value basis, which means whatever value is insured, is the amount you will receive in the event of a claim. The policy trigger is determined at time of binding, for example, 1/4 (0.25) inches or more of rain accumulation during the insured hours of 2:00 PM – 6:00 PM. There is no need to cancel an event in order to receive a claim under a weather insurance policy.
If unwanted weather comes it is unlikely to be a total wash out, so unlike most traditional insurance coverages, you do not need to insure to full value of expenses or revenue. Determine the expected amount of loss and insure that amount.
Our online system provides coverage written on admitted paper with AVEMCO Insurance Company. Coverage for insurance products not available online may be placed with other highly-rated and admitted carriers. In some circumstances, coverage may be placed with a non-admitted carrier such as Lloyds.
Weather Insurance can be used to cover perils such as Rain, Snow, Electrical Storm, Wind and Temperature, Heat Index, as well as Adverse Weather which refers to any extreme weather conditions which pose a serious threat to those attending the event. Currently, rain is the only peril available for coverage through our online system. To submit a quote request for any other peril or risk, please contact us.