A snowfall on Christmas Day could mean a $500,000 windfall for lucky jewelry store customers in Asheville, N.C., thanks to a farm-tested specialty insurance product that is catching on in a whole new way these days.
Jeweler Alan Perry ran a store promotion at Perry's Emporium between Nov. 26 and Dec. 11 with a promise that if three or more inches of snow fall at the Ashville airport on Christmas Day, he will cheerfully give away everything he sold during the promotional period.
Since Asheville has only seen that much snow on Christmas Day twice in the last 60 years, the odds on Perry being snowballed for a half-mil stand at about 3 percent. Then again, weather forecasters are tracking an approaching cold front that could deliver the white Christmas his customers are dreaming of.
But Perry is no patsy. To hedge against a freak flake-fest, he purchased a specialty weather insurance policy that will cover his losses as surely as home insurance or auto insurance. His terms include sharing a percentage of his sales with his insurer.
Companies like HHC Specialty Underwriters of Wakefield, Mass. offer a wide variety of weather-contingent insurance policies that enable jewelers, auto dealers, leasing companies, travel agents, resort/time share companies and the like to bet the farm in order to lure more customers.
The promos typically revolve around snowfall or rainfall amounts or maximum temperatures. No need to check a Lotto ticket to see if you've won – just step outside!
Traditional weather insurance, which has long been used to cover things like crop damage and events cancelled due to weather, has been adapting of late to the needs of businesses looking for a promotional lift in lean times. A startup called WeatherBill even offers weather coverage for individuals who want to guard their garden against a spring freeze.
Michael Barry of the Insurance Information Institute says specialty insurance qualifies as real insurance "so long as there is a transfer of risk occurring between the policyholder and the insurer." His only caveat: make sure the company is licensed to sell insurance in your state, because insurance is regulated at the state level.
This was Perry's first Christmas snow promotion and he's as giddy as a kid at Christmas over his sales. Does he plan a repeat next year?
"Does a cat have whiskers? Absolutely!" he told local station WECT.
Here's wishing all of you Asheville shoppers a very white Christmas!
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