INTEREST IN SNOW COVERAGE IS ACCUMULATING

Nothing sells better than success, except maybe snow.

Last year's record snowfall in the Northeast has greatly increased the demand for snow insurance, with sales of policies far exceeding the pace of a year ago.

Generally, the coverage is sought by municipalities facing large snow-removal expenses or by businesses fearing weather-related losses. Last year, Massport, the agency that runs Boston's Logan International Airport, bought a policy that paid out limits of $2 million (BI, Jan. 15, 1996).

This year, the Metropolitan Washington Airport Authority purchased a policy covering Washington Dulles International Airport and Washington National Airport from the Frederick E. Penn Insurance Agency in Needham, Mass., which also sold the Logan policy. Penn is one of only a few agencies that offer snow insurance.

The Washington coverage will pay $25,000 for each inch of snow above 40 inches that falls on Dulles, up to $1 million, while the trigger at Washington National is 35 inches. The policy costs the authority $35,000 and is underwritten by Reliance National Insurance Co., the underwriter for most of the Penn Agency's policies.

Richard Penn, chief executive officer of the Penn Agency, said this year his agency has sold 20 to 25 snow policies, whereas last year it sold only the Logan policy. Interest in the policy is higher still. Many businesses, he said, were interested but did not buy it.

In the next few years, however, Mr. Penn anticipates these businesses will take the plunge into the snow coverage. "You need a couple of more years of severe weather and people will include it in their regular coverage," he said. "It takes time for people to buy into something new."

Another agency, Customized Worldwide Weather Insurance Agency, has tripled the number of policies sold this year, said Pat Sleicher, director of special events for the Manhasset, N.Y.-based agency. Worldwide Weather sold about 60 policies this year, triple the 20 it sold last year. The main buyers are municipalities, condominium associations and restaurants, but it is available "for anyone with snow removal exposure," Ms. Sleicher said.

Like Mr. Penn, she attributes the heightened interest to last year's snowfall in the Northeast.

The policy's form has not changed from last year. One policy pays when the number of storms exceeds a specified figure-generally four-of a certain intensity. The most popular type of snow policy, however, pays when seasonal snowfall exceeds a specified level, or snowfall on a specified day exceeds a certain amount.