# Snowfall Insurance



## SpectrumSnowIns (Apr 11, 2011)

Hello all!

You may or may not have heard about snowfall insurance, which is an insurance policy that is related to either too much snowfall or a lack of snowfall.

Of course, having a perfect balance of per-push and seasonal contracts is the best way to mitigate the risk of extremes in snowfall, that balance is not always obtainable. Snowfall insurance can help to mitigate the risk associated with that imbalance.

I provide more snowfall insurance to members of the snow removal industry than any other broker, and can certainly be a valuable resource in the process. If anyone has any questions about the coverage, please feel free to post and I will answer as soon as I can.

Be safe!

Robert Holmes ASCA-C, ASM
Spectrum Weather Insurance


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## SpectrumSnowIns (Apr 11, 2011)

As an FYI, I will be at the GIE+EXPO next week in Louisville. Booth # 10055 in the Snow & Ice Pavilion.


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## mnlawns (Sep 19, 2018)

what is snow fall insurance???


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## BossPlow2010 (Sep 29, 2010)

mnlawns said:


> what is snow fall insurance???


Snow fall insurance protects the contractor in the event of too little snow or too much snow.

So if your ten year season average is 100" of snow and that's what your seasonal contracts are base at, and you receive 200" of snow, Spectrum will payout what you would make per inch.

Now if your heavy with per push accounts, and again, using a 100" per year- ten year average, and say you get 50" spectrum will reimburse you for that 50" that didn't happen


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## mnlawns (Sep 19, 2018)

BossPlow2010 said:


> Snow fall insurance protects the contractor in the event of too little snow or too much snow.
> 
> So if your ten year season average is 100" of snow and that's what your seasonal contracts are base at, and you receive 200" of snow, Spectrum will payout what you would make per inch.
> 
> Now if your heavy with per push accounts, and again, using a 100" per year- ten year average, and say you get 50" spectrum will reimburse you for that 50" that didn't happen


ok... but why the heck would someone want to do that???


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## BossPlow2010 (Sep 29, 2010)

mnlawns said:


> ok... but why the heck would someone want to do that???


If you're heavy on per push or seasonal the amount of snow you get can have a huge affect of your business and day to day operations.
You gotta remember, not all companies do lawns to keep their business afloat in the summer, many are snow only and prep in the summer for winter.

Robert is a good guy and I've dealt with him the past few years, one thing to remember is- it's Insurance, they're in the business to make money just like you are, so it's important to do your due diligence research on it.
There's some big companies in SE Michigan that have it maybe give robert a call and he can let you in on it.
talk to @Luther I believe he's dealt with robbert too


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## mnlawns (Sep 19, 2018)

BossPlow2010 said:


> If you're heavy on per push or seasonal the amount of snow you get can have a huge affect of your business and day to day operations.
> You gotta remember, not all companies do lawns to keep their business afloat in the summer, many are snow only and prep in the summer for winter.
> 
> Robert is a good guy and I've dealt with him the past few years, one thing to remember is- it's Insurance, they're in the business to make money just like you are, so it's important to do your due diligence research on it.
> ...


still having a hard time understanding how this works... lets say for example, i have a parking lot, and i plan on 4 15+ inch storms @900 a storm, 6 6-10 inch storms at 550 a storm, and 10 1-3 inch storms @ 300 a storm. I only get 3 of the larger storms, 7 of the medium sized storms, and 8 1-3 inch storms. So if what i think you are saying is right i would get an extra $950 from them? What i see a problem with is giving them money if i have a seasonal contract, but don't get all of the projected snowfall, for example, parking lot is 2300 a month 5months, expecting 20 storms, but i only get 15 do i have to give them 25%?


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## iceyman (Mar 1, 2007)

mnlawns said:


> still having a hard time understanding how this works... lets say for example, i have a parking lot, and i plan on 4 15+ inch storms @900 a storm, 6 6-10 inch storms at 550 a storm, and 10 1-3 inch storms @ 300 a storm. I only get 3 of the larger storms, 7 of the medium sized storms, and 8 1-3 inch storms. So if what i think you are saying is right i would get an extra $950 from them? What i see a problem with is giving them money if i have a seasonal contract, but don't get all of the projected snowfall, for example, parking lot is 2300 a month 5months, expecting 20 storms, but i only get 15 do i have to give them 25%?


No you give them whatever the policy costs for the year


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## Luther (Oct 31, 2007)

iceyman said:


> No you give them whatever the policy costs for the year


Not necessarily. The policy can be written for the entire winter, a month, a week, or a day. Lots of flexibility. Depends on what you're looking for and hedging against. I'm sure Robert will chime in once he see's the activity here. He's a very knowledgeable guy and offers a wonderful service.


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## SpectrumSnowIns (Apr 11, 2011)

mnlawns said:


> still having a hard time understanding how this works... lets say for example, i have a parking lot, and i plan on 4 15+ inch storms @900 a storm, 6 6-10 inch storms at 550 a storm, and 10 1-3 inch storms @ 300 a storm. I only get 3 of the larger storms, 7 of the medium sized storms, and 8 1-3 inch storms. So if what i think you are saying is right i would get an extra $950 from them? What i see a problem with is giving them money if i have a seasonal contract, but don't get all of the projected snowfall, for example, parking lot is 2300 a month 5months, expecting 20 storms, but i only get 15 do i have to give them 25%?


mnlawns,
I assume from your name that you are in Minnesota, and will further assume you are in the Twin Cities. While an insurance policy could potentially be constructed that was based on the storm/revenue model descried above, the typical policy is based on the total inches of snowfall.

For example, the Twin Cities receives about 50" of snowfall in a typical winter, while there have been winters where nearly 100" has fallen, and winters where less than 20" has occurred.

Let's further assume that it costs you $1,000 to push an inch of snow. You could purchase a policy that would pay your company $1,000 per inch, for every inch that occurs over 70" this winter. That policy may have a premium of around $2,500 (pricing is determined ad hoc as requested; there are no published rates so this is a ball park number). With that policy in place, if 86.6" of snow fell (as it did the winter of 2010-11), you would have received a claim check at the end of the winter of $16,600. For comparison, a policy that pays a claim if you received over 65, instead of 70, would probably have a premium closer to $5,000, while a policy that paid a claim of snowfall was over 75" would run you about $1,200.

Coverage for a lack of snow can also be obtained. A policy that would pay a claim of $1,000 for every inch if the total for the winter were less than 30" would have a premium of about $1,300. If that were in place the winter of 2011-12, when 22.3" of snow fell, it would have paid a claim of $7,700 [(30" - 22.3") x $1,000]. Similarly, a below 35" policy would have a premium of approximately $3,400 (again, ballparking here).

If more of your service contracts are fixed-price seasonal, then the excess snow coverage may be needed. If most of your contracts are by the push, then the lack of snow insurance may be of interest. Perfectly balanced? Then no coverage is needed!

The above examples are the basic types of coverage, but we can get creative. For instance, we can write a policy that pays a claim for every event of 12" or more. We can write coverage for events of 6"or more, but with a 3-event deductible. We can write a policy that pays a claim if over XX" of snow falls in a two-week period. It's really a matter of determining what will cause a significant financial harm to your company and then designing a policy around that.

Whew, that was a lot of info, and I am sure that it will lead to more questions. I will try to respond as best as I can to any further questions. Be safe!


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## mnlawns (Sep 19, 2018)

SpectrumSnowIns said:


> mnlawns,
> I assume from your name that you are in Minnesota, and will further assume you are in the Twin Cities. While an insurance policy could potentially be constructed that was based on the storm/revenue model descried above, the typical policy is based on the total inches of snowfall.
> 
> For example, the Twin Cities receives about 50" of snowfall in a typical winter, while there have been winters where nearly 100" has fallen, and winters where less than 20" has occurred.
> ...


You are correct in your assumptions, i am from the twin cities, and that is pretty cool, thanks for filling me in


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## SpectrumSnowIns (Apr 11, 2011)

mnlawns said:


> You are correct in your assumptions, i am from the twin cities, and that is pretty cool, thanks for filling me in


No worries. I too am originally from the Twin Cities, Anoka to be exact.


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## ford550 (Nov 9, 2008)

This is pretty cool insurance. Never heard of such a thing. Thanks for the info.


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## MSsnowplowing (Nov 1, 2012)

interesting, is this just for kansas city or any state?


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## JMHConstruction (Aug 22, 2011)

I bet the claims in KC have kept you busy for the last few years...


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## JMHConstruction (Aug 22, 2011)

MSsnowplowing said:


> interesting, is this just for kansas city or any state?


I'm going to do some assuming of my own, and say since he will be at the gie expo and the Michigan guys know of him, he can provide a policy in other states


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## SpectrumSnowIns (Apr 11, 2011)

MSsnowplowing said:


> interesting, is this just for kansas city or any state?


Any State except Alaska and Hawaii, although Alaska could become available if needed.


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## SpectrumSnowIns (Apr 11, 2011)

JMHConstruction said:


> I bet the claims in KC have kept you busy for the last few years...


I actually have no KC clients.


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## SpectrumSnowIns (Apr 11, 2011)

JMHConstruction said:


> I'm going to do some assuming of my own, and say since he will be at the gie expo and the Michigan guys know of him, he can provide a policy in other states


Correctomundo!


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## John_DeereGreen (Jan 2, 2011)

Robert is a first class businessman and very up front in his dealings. Highly recommend working with him if you have the need. Can't believe I didn't see this sooner.


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## JMHConstruction (Aug 22, 2011)

I'm not big league enough to need this, but more curious.

Do you have a set snowfall average you go off of, or do you set the amount to what the contractor has figured up? Also, do you go through the contractors contracts to determine what he averages per inch, or how do you determine this? Other than possible fraud, what keeps the contractor from telling you he makes $10,000 per inch, when in reality they make $1,000? Unlike auto, homeowners, even farming, where there is a "set" amount of what things are worth, how do you determine what an inch of snow is worth to each company?


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## SpectrumSnowIns (Apr 11, 2011)

John_DeereGreen said:


> Robert is a first class businessman and very up front in his dealings. Highly recommend working with him if you have the need. Can't believe I didn't see this sooner.


Thank you, Sir!


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## SpectrumSnowIns (Apr 11, 2011)

JMHConstruction said:


> I'm not big league enough to need this, but more curious.
> 
> Do you have a set snowfall average you go off of, or do you set the amount to what the contractor has figured up? Also, do you go through the contractors contracts to determine what he averages per inch, or how do you determine this? Other than possible fraud, what keeps the contractor from telling you he makes $10,000 per inch, when in reality they make $1,000? Unlike auto, homeowners, even farming, where there is a "set" amount of what things are worth, how do you determine what an inch of snow is worth to each company?


While it is up to the contractor to inform us of the $$ per inch, the application does require that the last three years of financials be listed, as well as projected financials for this winter. There is no need to submit each service contract however.

When it comes to the set average of snowfall, that, of course, varies by location. Instead of thinking as your average as a single number, think of it as a range of values, from XX" to YY", where the majority of winters tend to fall. You should be able to operate your business profitably within those two values. When you get outside of those bounds, that is where the insurance may prove to be useful.

I hope that helps.

Rob


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## JMHConstruction (Aug 22, 2011)

SpectrumSnowIns said:


> While it is up to the contractor to inform us of the $$ per inch, the application does require that the last three years of financials be listed, as well as projected financials for this winter. There is no need to submit each service contract however.
> 
> When it comes to the set average of snowfall, that, of course, varies by location. Instead of thinking as your average as a single number, think of it as a range of values, from XX" to YY", where the majority of winters tend to fall. You should be able to operate your business profitably within those two values. When you get outside of those bounds, that is where the insurance may prove to be useful.
> 
> ...


Thanks. I was just curious how that all worked.


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## MSsnowplowing (Nov 1, 2012)

SpectrumSnowIns said:


> While it is up to the contractor to inform us of the $$ per inch, the application does require that the last three years of financials be listed, as well as projected financials for this winter. There is no need to submit each service contract however.
> 
> When it comes to the set average of snowfall, that, of course, varies by location. Instead of thinking as your average as a single number, think of it as a range of values, from XX" to YY", where the majority of winters tend to fall. You should be able to operate your business profitably within those two values. When you get outside of those bounds, that is where the insurance may prove to be useful.
> 
> ...


Hmmm, 
Sounds like you could really lose money if a person knows the average snow fall totals each year.

Either way it's gambling.


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## SpectrumSnowIns (Apr 11, 2011)

MSsnowplowing said:


> Hmmm,
> Sounds like you could really lose money if a person knows the average snow fall totals each year.
> 
> Either way it's gambling.


Actually, I would say that the real gamble is not to have the insurance, as an extreme winter could be a real bummer without it.

I am not sure what you mean by your statement about knowing the average snowfall. The snowfall data in this country is freely available to everyone, so everyone should know their numbers, whether it's the snow contractor or the insurance carrier.

Rob


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## sota (Jan 31, 2011)

I would love to hear about any Erie, PA clients you have/had from the 2017/2018 season. Greatest snowfall ever type event must really cause some grey hairs.
Actually, I'd love to hear/see data from both sides of that equation and event.


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## Luther (Oct 31, 2007)

Why the interest in Erie when you’re from New Jersey?


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## sota (Jan 31, 2011)

Real world numbers.

Plus, I was there when it happened.


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## SpectrumSnowIns (Apr 11, 2011)

Unfortunately, I had no clients in Erie last winter.


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## sota (Jan 31, 2011)

I think you'd have dodged a bullet. If ever there was a case of TOO much snow in a given time frame, it was that weekend.

I don't remember seeing snow that high in front of houses since I was a wee lad in Massachusetts back in the mid 70s.


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## SpectrumSnowIns (Apr 11, 2011)

Yep, Erie would have been a significant claim payment, no doubt. However, when coverage is placed for locations across the country, From Seattle to Boston, any large payment like that is less significant than if it were the only policy placed.


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## SpectrumSnowIns (Apr 11, 2011)

FYI, if anyone in the Seattle area is interested, I will speaking at an ASCA event on the afternoon of Tuesday, November 6. Details are available here: https://www.ascaonline.org/page/snowacademyseattle/.


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## SpectrumSnowIns (Apr 11, 2011)

Just a quick note that for coverage to begin on December 1, a snowfall insurance policy would need to be purchased by Tuesday, Nov 20.

Coverage can still be available after November 20, but the coverage period will need to start at least 10 days after premium is paid, which will put us into the month of December for a start date. Recall that no snowfall that falls before the policy coverage begin date.

Be safe!


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## cjames808 (Dec 18, 2015)

JMHConstruction said:


> I'm not big league enough to need this, but more curious.
> 
> Do you have a set snowfall average you go off of, or do you set the amount to what the contractor has figured up? Also, do you go through the contractors contracts to determine what he averages per inch, or how do you determine this? Other than possible fraud, what keeps the contractor from telling you he makes $10,000 per inch, when in reality they make $1,000? Unlike auto, homeowners, even farming, where there is a "set" amount of what things are worth, how do you determine what an inch of snow is worth to each company?


Id guess a policy for $10,000 costs a bit more than one for $1,000.


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## SpectrumSnowIns (Apr 11, 2011)

cjames808 said:


> Id guess a policy for $10,000 costs a bit more than one for $1,000.


Ten times as much, in fact.


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## cjames808 (Dec 18, 2015)

That’ll keepem honest. You wouldn’t insure your Miata for $100,000 and not expect significant increase in premiums.


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## SpectrumSnowIns (Apr 11, 2011)

Just an FYI, I was featured on a recent podcast that just went "live" yesterday:
https://www.snowmagazineonline.com/video/weather-loss-insurance-risk/
Check it out if you are so inclined!


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## Mark Oomkes (Dec 10, 2000)

I'm guessing you'll be seeing a huge increase in requests for policies next year.


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## Defcon 5 (Mar 20, 2014)

Mark Oomkes said:


> I'm guessing you'll be seeing a huge increase in requests for policies next year.


Starting with you??


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## Mark Oomkes (Dec 10, 2000)

Defcon 5 said:


> Starting with you??


Winter is not over until EWE say it's OVER!


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## Mark Oomkes (Dec 10, 2000)

Defcon 5 said:


> Starting with you??


I wonder if he sells spinner insurance...


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## Mike_PS (Feb 28, 2005)

ok, we don't need to turn this thread into a joke so let's stay on point


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## SpectrumSnowIns (Apr 11, 2011)

Mark Oomkes said:


> I'm guessing you'll be seeing a huge increase in requests for policies next year.


It's unfortunate but yes, requests for coverage increase tremendously after an extreme winter, either heavy or light.
In fact, a year like this spurs mid-winter interest for policies that cover the last portion of the season. I just wrote coverage for a Jan 20 - Apr 15 policy today.


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## Mark Oomkes (Dec 10, 2000)

SpectrumSnowIns said:


> It's unfortunate but yes, requests for coverage increase tremendously after an extreme winter, either heavy or light.
> In fact, a year like this spurs mid-winter interest for policies that cover the last portion of the season. I just wrote coverage for a Jan 20 - Apr 15 policy today.


I assume rates would be higher than if one signed up in October?


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## Mark Oomkes (Dec 10, 2000)

I guess part of the issue would be is does it really help when you need it?

I assume payout is when the season is OVER (as defined by @Defcon 5 ) so what about cash flow issues during the season?


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## SpectrumSnowIns (Apr 11, 2011)

Mark Oomkes said:


> I assume rates would be higher than if one signed up in October?


No. The rates do not typically change. The Jan 20 - April 15 policy would have had the same premium if it were purchased in October.


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## Mark Oomkes (Dec 10, 2000)

SpectrumSnowIns said:


> No. The rates do not typically change. The Jan 20 - April 15 policy would have had the same premium if it were purchased in October.


Interesting


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## SpectrumSnowIns (Apr 11, 2011)

Mark Oomkes said:


> I guess part of the issue would be is does it really help when you need it?
> 
> I assume payout is when the season is OVER (as defined by @Defcon 5 ) so what about cash flow issues during the season?


The policies will typically pay the claim after the season is over. The exception is if you have an excess snowfall policy. If the snowfall exceeds the insured threshold, we can usually get a partial claim paid before the winter ends. Or if you have a big storm policy, you can receive your claim after the storm(s) occur.

Rob


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## SpectrumSnowIns (Apr 11, 2011)

It's getting to be that time of year again! Let me know if anyone has questions.


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## Mark Oomkes (Dec 10, 2000)

SpectrumSnowIns said:


> It's getting to be that time of year again! Let me know if anyone has questions.


Do you have a lack of qualified employee insurance?


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## Mr.Markus (Jan 7, 2010)

Mark Oomkes said:


> Do you have a lack of qualified employee insurance?


Boy, would THAT be something i would be interested in...


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## SpectrumSnowIns (Apr 11, 2011)

Mr.Markus said:


> Boy, would THAT be something i would be interested in...


Me too!


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## sota (Jan 31, 2011)

should I PM you directly, or ask here.
also, what details do you need.


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## BossPlow2010 (Sep 29, 2010)

sota said:


> should I PM you directly, or ask here.
> also, what details do you need.


You should call him


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## SpectrumSnowIns (Apr 11, 2011)

You can give me a call. 816-810-2346


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## sota (Jan 31, 2011)

hey maybe i could call him.


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## SpectrumSnowIns (Apr 11, 2011)

Hmmm.....maybe.


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