You can buy insurance for just about anything. Health insurance, car insurance, home insurance and travel insurance are some of the most common types.
And in the 1980s, then-Entertainment Tonight anchor Mary Hart famously insured her much-admired legs for $1 million.
If that seems odd, a quick Google search discloses that septuagenarian Vegas crooner Tom Jones apparently insured his chest hair for $7 million.
While those policies may have been more publicity stunt than an actual fear of spider veins or exfoliation, it makes you wonder what you CAN’T insure.
I mean, wouldn’t it be nice to take out an insurance policy to guarantee gas prices won’t go skyrocketing back up again?
Wait. What? Apparently, now you can.
Gas prices are the latest thing for which Americans can buy insurance.
At least that’s what the folks at the California-based LoveMyGasPrice.com are calling their price protection plan for cost-conscious motorists. The concept launched this week.
The idea is fairly simple.
A customer buys “insurance” in 20-gallon increments per month. For the fee, which is $3.99 per unit (20 gallons) per month, the company “guarantees” that the price for a gallon of gas won’t go above $2.75.
If it does, LoveMyGasPrice.com will reimburse its customers the difference via their Pay Pal account.
The concept is the brainchild of G.P. Manalac, LoveMyGasPrice.com CEO and founder, who has more than 20 years in the fuel industry both in wholesale trading and retail electric and gas companies.
“We’re basically bringing everyday drivers the strategies and expertise that very large businesses already use to manage their energy costs,” Manalac said in explaining the company’s business model. “So just like FedEx, UPS or Southwest Airlines, we purchase large quantities of gas in bulk at a lower fixed price and pass along those savings to customers when gas prices rise. When they don’t, we assume the risk and take the hit, not our customers.”
While he refers to the product as insurance, it’s not a regulated insurance product, just a service that gives motorist peace of mind about how much they may get stuck paying at the pump from month to month.
Prices in most of the region are averaging a little above $2.50 a gallon, so a customer doesn’t have to worry about costs going up much more than a quarter a gallon, or about $5 for the 20-gallon insurance unit.
Now, if prices fall, the customer doesn’t get anything but the same lower price that everyone else is enjoying.
That’s where Manalac said his service is different – and better – than the system used by large fuel-buyers.
Since this plan is a price guarantee versus a pre-pay situation, the customer isn’t locking into a higher rate if the prices go down – a scenario that happened to many home and small-business oil heat customers this winter.
Manalac said he realizes his idea would have been more attractive to the motoring public a few years ago when gas prices were skyrocketing and everyone was panicking about how high the cost of gas would go.
But he said now is a better time to buy into such a service because gas prices are at some of the lowest rates in years and customers would be buying in at a much lower rate.
He said rates are still unstable and even he doesn’t know what direction they’re heading, but if it’s up, his customers will be set.
Manalac admits it’s not a plan for everyone.
He said for people who can withstand a little upward mobility in their fuel budget, or don’t want to spend $3.99 a month for a gas price increase that might not occur, the service probably doesn’t sound appealing.
But, for people who drive a lot and want to maintain a certain fuel budget, it’s a good system to keep gas prices predictable, Manalac said.
“For people who are concerned about gas prices, it is an option,” he said.