Rainy-Day Refunds

San Francisco's Fireman's Fund, seventh-biggest U.S. fire-casualty-marine insurance underwriter, is often called the West Coast Lloyds. It is willing to take chances on risks that other companies do not handle. The 93-year-old business was founded in San Francisco after the city had burned to the ground six times in 18 months. Fireman's Fund earned its name --and helped ensure its survival--by turning over 10% of its profits as an incentive to San Francisco's volunteer fire brigades. Later it met one of the biggest fire losses ever paid out by a U.S. insurance company: $11 million in claims from the 1906 earthquake.

This month Fireman's Fund took on a new kind of risk: rain insurance for vacationers. Policies covering 88 resort areas in 32 states and the District of Columbia were approved for sale last week in New York, Connecticut and Florida. The company soon expects to be selling silver linings to vacationers from coast to coast.

Though vacation rain insurance has long been available in Europe, Fireman's Fund is the first company to offer it in the U.S. Policies reimburse the vacationer for rainy days (above the average precipitation) according to the amount of money ($100, $200 or $300 a week) he plans to spend and number of weeks (two to four) he plans to stay at a resort during its normal vacation season, e.g., Nov. 1-April 30 in Palm Springs, June 1-Sept. 30 in Atlantic City. For example, in a resort where there was above-average precipitation (over .05 in.) for five days, a 14-day vacationer would collect 10% of his expenses. If it rained as many as ten days, he would recover a total of 100%. A 28-day vacationer starts collecting (20%) on the ninth day, works up to 100% on the 16th day. Premium cost: 5% of the total amount insured.

Fireman's Fund issues vacation insurance only for areas where there is a nearby Weather Bureau, regularly receives official rainfall reports from each area. Thus the vacationer who is rained out does not have to file a claim; his refund is automatically sent out when the statistics show he earned it.

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