03 June 2010

Insuring against nature

We already know about insurance against floods, fire and other problems, but it looks like we may be getting a new product -- travel insurance against volcanic ash.

Yes, I know that you can buy travel insurance now, but most of those "policies" are a rip-off, designed to collect an extra few bucks and avoid payments.

This is serious. Can we do better to prepare for another week, or month, of interrupted travel? Yes.
  1. Everyone pays $2 per ticket for insurance.
  2. If there's an interruption, then the airlines can collect lots of money for passengers from the insurance companies.
  3. Once service resumes, this money is distributed to passengers who choose between more money and a longer wait to fly or less money and a shorter wait. Airlines can create a "trade" market with their existing software systems.
  4. It's important to note that airlines can buy additional business interruption insurance. But this insurance makes it easier for customers to cope with the delay.
Note that this system can also make sense for other climate-related events. Maybe not for climate change, per se, but for the entire range of surprise interruptions that CC will bring us.

Bottom Line: We will not be able to stop some problems, but we can lower the damage they do.

4 comments:

  1. I don't know, it sounds a lot like earthquake insurance. The insurance company takes your money, then when one hits (be it volcano or earthquake), it is so dang big that the company just has to file bankruptcy. Then, we clean up the mess, socially, anyway.

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  2. As to the bottom line - Yes, lets make a system where I can protect my wallet from the vagaries of climate change and thus give myself the peace of mind to continue criss-crossing the globe in jets; irony of this situation be damned.

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  3. If only we could insure against nurture, too. Then we'd really have something.

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  4. @Josh -- it's those damn incompetent regulators. Not requiring a big enough bond.

    @Michelle -- yep.

    @Outsider -- LOLz

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