Key Challenges for the Region
Frequent and Severe Flooding: Storms like Hurricane Helene are driving more intense and widespread flood events across the Eastern U.S.
Limited Coverage for Non-Damage Business Interruption: Traditional insurance often fails to cover revenue losses from cancellations, access issues, and delayed reopenings.
Slow Recovery Timelines: Lengthy claims processes and infrastructure disruption delay the return to normal operations for hospitality businesses.
Key benefits of parametric insurance
Added Transparency
With pre-agreed parameters and payout structures eliminating ambiguity
Bespoke Policies
Custom covers for one or multiple locations adapted to the client’s existing coverage (e.g., traditional insurance, captive)
Swift Payouts
In a matter of days or weeks after a loss event, no longer requiring on-site loss assessment
Financial Freedom
Covering any type of direct or indirect financial losses resulting from the event
Flooding is one of the most disruptive climate risks facing the hospitality sector in the U.S. Beyond physical damage, floods lead to widespread non-damage business interruption—from mass cancellations to prolonged downtime and reduced tourist demand. Traditional insurance often fails to address these financial gaps, leaving businesses exposed.
Descartes’ Parametric Flood Insurance: Fast, Transparent Support for Climate Resilience
Descartes’ Flood-at-Location parametric solution uses real-time, on-site sensors to measure flood depth with precision. This enables rapid, pre-agreed payouts that help hospitality businesses recover quickly—not just from physical damage, but from lost revenue and operational delays.
case study example
Parametric Flood-at-Location Solution for North Carolina
A hotel in Asheville, North Carolina, experienced severe flooding from the French Broad River overflowing due to Hurricane Helene.
Problem
While their traditional insurance covered the physical property damage, it was unable to fully address other financial losses. After a wave of cancellations and an extended delay in returning to normal operations, the hotel decided to seek out an alternative solution that could protect them from the financial strain of non-damage business interruption in the future.
Solution
Descartes’ Flood-at-Location product offers a cost-effective solution for flood risk, using precise, no-contact sensors installed on-site to measure flood depth in real time. This parametric approach enables swift, transparent payouts, helping clients recover quickly from both property damage and indirect financial losses, such as business interruption and customer cancellations.
Result
If a similar event were to occur, with the flood depth at 3.9 feet and the location limit set to $10 million, the hotel group would receive a payout of $6 million.
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