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Insurance startups focus on outdoor adventures

Illustration of a hammock in the rain, shielded by an umbrella.

Illustration: Gabriella Turrisi/Axios

Traditional travel insurance is a billion-dollar industry, but often leaves travelers out to dry when weather disrupts their plans. Insurance startups are creeping into climate tech as investors eye a growing market for guarantees against unprecedented weather patterns.

Why it matters: Several startups want to plug this leak to protect the growing number of travelers joining the heavily weather-dependent world of outdoor recreation travel.

Driving the news: Sensible Weather recently announced a partnership with online campsite-booking company Tentrr.

  • Sensible offers what amounts to a "good weather guarantee" and automatically refunds travelers for items like ski lift tickets or campsite reservation fees if its predictive software indicates that the weather will negatively impact their activity.
  • Tentrr users are prompted at checkout to add Sensible's coverage to their booking.

Between the lines: Weather patterns have become increasingly unpredictable due to climate change at the same time as outdoor domestic travel grew during the pandemic.

  • Think of weather-guarantee coverage as the convergence of two years' worth of consumer trends coming to a head.
  • Plover Parametrics pitched a similar insurance model at Y Combinator's Demo Day this week. Plover cited a potential $95 billion annual recurring revenue market for weather-dependent insurance.

Our thought bubble: Homeowners' insurance plans have started adjusting to climate risks like wildfires and flooding by dropping coverage entirely instead of expanding it, citing the financial effects on their business.

  • The travel guarantee could create a model for shadow insurance that fills the gaps where traditional plans fall short.
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