As our summers get hotter, will heat-related travel insurance become the norm?

Will travel insurance providers be adding a new type of extreme heat coverage? Image: Shutterstock

With heatwaves plaguing southern Europe in recent weeks—during the peak summer holiday period, the debate about weather-related travel insurance coverage has been rekindled. Insurance offers have recently been developed to take into account snow levels and number of hours of sunshine; now insurers could also promise to reimburse holidaymakers when temperatures exceed 40°C.

Temperatures reaching 46°C in Sicily, Italy, 45°C in Catalonia, Spain as well as on the Greek island of Rhodes, where serious fires forced holidaymakers to evacuate and return home...the start of the summer holiday season in July was a scorcher in southern Europe, making the region less attractive than usual. While some summer travelers decided to opt for a change of scenery, cancelling their holiday at the last minute in favor of cooler locales on the Atlantic coast or even the North Sea, another solution is being touted: the possibility of a refund in the event of extreme heat. This is the concept of American start-up Sensible Weather, an insurance company that told the British daily The Independent of its plans to develop a policy offering that offers protection when temperatures soar. The full details about how it will work have yet to be thoroughly worked out, but the principle would be to promise a 50% refund when the mercury rises above 35°C, for instance. When the heat rises above 40°C, holidaymakers would be entitled to a full refund.

The initiative is being touted at a time when intense heat has scorched the vacation plans of many European tourists, prompting the Greek island of Rhodes to offer free vacations to those who had to flee due to the fires. And yet, while developing a package with a criterion related to temperature may be a novel idea, the principle of linking an insurance policy to weather, specifically the level of sunshine, already exists. Since the early 2010s, various tourism behemoths in France such as Pierre & Vacances, Marmara and Belambra have offered "sunshine" policies in various forms. Operators reimbursed customers, for instance, based on the number of days they were able to sunbathe. These offers were put in place following springtime seasons that had been disrupted by unstable periods of rainy weather. However these sunshine guarantees caught the attention of consumer associations due to lack of reliability. In 2012, French magazine 60 millions de consommateurs advised consumers to carefully check the content of the conditions describing what constituted "bad weather" in such policies. The guarantees allowed customers either to cancel their stay in advance, or to obtain compensation based on the number of hours of sunshine, established by Météo France weather bulletins.

Also read: How heatwaves are dangerous to human health

Another type of insurance along these lines is a policy that offers protection for "lack of snow," which some skiers in France take out when they go to the mountains. Once again, 60 millions de consommateurs warned about such insurance policies, which generally contain far too many exclusions to hope for any reimbursement. It should be noted that this type of insurance still exists, for example with Axa. The insurance giant promises to reimburse unused days of a ski pass when more than half the lifts in a ski area have been closed due to weather conditions.

Meanwhile American insurer Sensible Weather has already set up coverage based on the risk of rain. Holidaymakers could receive a refund if their stay was affected by more than two hours a day of rain between 8am and 8pm.