With the abundance of various insurance policies covering all sorts of things that could go wrong, we
easily forget how the idea of insurance came about.

The History of (Weather) Insurance

Insurance developed to help people share their risk with another person for a fee.
The probability of the adverse situation was hard to estimate, few predictions could
be made, and the stakes were rather high. The best candidate for insurance, therefore,
was weather.

If you are a farmer, you know that weather can make or break your entire business
and that a single day of terrible weather can ruin months of work and a fortune
worth of crops. A bad season might as well be the last for a farmer. What is more,
if an entire region is hit by bad weather, there would be major shortages of food,
causing additional problems in the area.

The fact that very devastating weather was relatively rare, however, appealed to
the first insurers. Today, we could call them “gamblers with weather.” A farmer
or a municipality would pay a steady fee to the insurer, which was pure profit unless
something bad happened. Only later did people realize that they can insure almost
anything, and that pooling insurance fees can help individuals cope with any unpleasant
risk at a reasonable price.

Weather Insurance Today

Of all the types of weather insurance, rain insurance is the most common, even today.
Not only farmers, but also golf course owners and open-air event managers make use
of rain insurance en masse. In fact, any event that depends on clear skies
is a good candidate for rain insurance.

But sometimes, rain is good. You can insure your garden against the contingency
of prolonged droughts, or your house near the river bank against floods. As users
of other “kinds of weather,” hot-air balloon show participants like to take out
wind insurance as a means of offsetting the cost of undesired wind conditions.

If you asked the manufacturer of your favourite ice cream, they would surely admit
to having insured themselves against cold weather in the wake of their most recent
advertising campaign. And if you were filming the campaign in the mountains, you
would be wise to insure your production against the lack of fluffy snow in the scenery.

With the development of the insurance industry over time, events of lesser and lesser
impact and significance have become the object of insurance. Nowadays, your own
personal expenses and risks may be covered by a fairly temporary policy on virtually
anything. If you are worried that rain might ruin your holidays, maybe you should
buy travel-weather insurance for the duration of your stay. Get part of your holiday
money back or receive alternative services free of charge in case the weather prevents
you from fully enjoying your stay. European airlines are offering so-called “sunshine
insurance,” which — for a one-time fee — will reimburse a small sum of money for
every spoiled day at your holiday destination.

Read here for more on
the importance of getting travel insurance.

From weather insurance, the entire industry has expanded to protect all aspects
of life and business. The earning potential of a family’s bread-winner has become
worthy enough to warrant the emergence of life insurance. The potential costs caused
by a car accident also require drivers to be covered. Finally, your apartment, house,
or mortgage all deserve proper financial back-up as well.

Brought to you by Lorne S. Marr, an independent insurance broker and expert on life insurance in Canada.