Addressing Excess Rain Risk in North America
In the U.S., excess precipitation creates cascading risks across critical infrastructure and economic systems. Intense rainfall and flooding can damage power generation and transmission assets, overwhelm stormwater and wastewater systems, disrupt transportation networks, and delay construction while increasing repair and insurance costs. Climate projections point to a growing threat: overall pluvial flood risk in the U.S. could increase by approximately 12% under a medium-emissions scenario and up to 19% under a high-emissions scenario by mid-century.
Urban flooding and sewer overflows also degrade water quality and pose public health hazards, while business interruptions and infrastructure failures strain emergency services, insurers, and financial institutions. Parametric insurance offers a streamlined, complementary solution to traditional coverage by using objective, remotely sourced data—such as rainfall measurements—to trigger payouts, eliminating the need for on-site loss assessments.
How our parametric excess rain cover works
Descartes' parametric excess rainfall insurance combines satellite observations and robust precipitation datasets to assess risk at the insured location, with payout structures indexed to the daily cumulative rainfall over a set number of days, as reported by a third-party data source. The structure is calibrated to the type of crop or property, and precipitation is continually monitored throughout the coverage period. Once a predefined threshold is met, policyholders can receive payment within weeks, rather than waiting months for claims to be adjusted.
Covered Industries
Hospitality
Heavy rainfall disrupts guest operations, reduces occupancy, and causes costly business interruptions.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
How our parametric excess rain cover works
Descartes' parametric excess rainfall insurance combines satellite observations and robust precipitation datasets to assess risk at the insured location, with payout structures indexed to the daily cumulative rainfall over a set number of days, as reported by a third-party data source. The structure is calibrated to the type of crop or property, and precipitation is continually monitored throughout the coverage period. Once a predefined threshold is met, policyholders can receive payment within weeks, rather than waiting months for claims to be adjusted.
Feature | Traditional insurance | Descartes’ parametric |
Claims & loss adjustment | Loss assessed on-site. Subjective, complex, open to dispute. | Triggered by independent third-party data. Objective and transparent. |
Payout timeline | Months, sometimes years, of adjustment. | Days to weeks after the event. |
Use of funds | Usually restricted to repairing physical assets. | Flexible. Covers any financial loss, including non-damage business interruption. |
Coverage | Off-the-shelf, limited room to customize. | Tailored to each client’s exposure and budget. |
Risk period | Annual or long-term agreement. | Flexible to match client needs. |
Where a parametric excess rainfall layer fits
Parametric is most powerful as a complement to your existing program. In today’s market, it allows organizations to reinvest premium savings into closing the structural gaps a traditional policy leaves open.
The most common ways clients put it to work:
- Buy down a high deductible: reduce retained exposure following excess rain and flood-related events.
- Top up a sublimit: increase available protection where traditional flood or water damage coverage may be constrained.
- Cover non-damage business interruption: protect against revenue loss, project delays, supply chain disruption, and operational downtime caused by excessive rainfall.
- Secure immediate liquidity: access rapid funds to support emergency response, cleanup costs, operational continuity, and recovery efforts.
- Wrap an exclusion: address precipitation-related exposures that may be excluded or only partially covered under traditional policies.
Who it's for
- Agribusinesses: protection against crop damage, reduced productivity, delayed harvests, and operational disruption caused by prolonged rainfall and saturated soil conditions.
- Food & beverage companies: protection against supply chain disruption, raw material shortages, production delays, and revenue impacts linked to excessive rainfall.
- Construction firms: coverage for project delays, site inaccessibility, increased costs, and schedule disruptions caused by heavy precipitation.
- Real estate owners: protection against property-related financial impacts, tenant disruption, and increased operating costs following severe rainfall events.
- Infrastructure operators: support for assets exposed to flooding, drainage failures, transportation disruption, and precipitation-related operational impacts.
- Utilities: protection against service interruption, infrastructure stress, and recovery costs resulting from extreme rainfall.
- Public sector entities: rapid liquidity to support emergency response, community recovery, and resilience initiatives following major precipitation events.
Parametric coverage in 4 steps
Assess
We assess and evaluate the client's risk exposure to excess rain, leveraging precipitation datasets and satellite data.
Customize
Design a customized cover, fit to the client’s unique needs payout structures are indexed according to daily cumulative rainfall over a set number of days.
Monitor
Upon policy inception, we monitor the insured's location for precipitation to determine whether a qualifying event has occurred.
Payout
Insured clients receive a payout within weeks to cover damages incurred and boost liquidity.
Global Parametric Insurance Specialist
10 countries with offices around the world
20+ perils covered with best-in-class (re)insurers, written on A+ paper
150+ scientific experts: risk modelers, data scientists, and software engineers
$15B+ capacity already deployed through corporate brokers
FAQ
For more information on parametric insurance, triggers, claims processes, coverage structures, and drought-related solutions: Descartes FAQ Hub
What is parametric excess rain insurance?
Parametric excess rain insurance is coverage that pays out when measured precipitation at an insured location exceeds a pre-agreed threshold, rather than when a physical loss is confirmed through a claims investigation. The trigger is an objective rainfall index measured using satellite data and weather station records. Payout is calculated as a percentage of the insured limit and does not require proof of direct property damage.
What index is used to measure excess rain risk?
The index is typically maximum daily precipitation, measured at or near the insured location and compared against a predefined threshold. Thresholds and the corresponding payout scale are calibrated using historical rainfall and flood data, cross-referenced with the client's own claims history where available, to reflect the frequency, intensity, and duration of past events at that location.
How is the excess rain insurance payout calculated?
The payout is a percentage of the insured limit that scales with how far measured rainfall exceeds the threshold. Exact thresholds and scale are set individually based on the insured location's rainfall history and risk profile.
What types of damage does parametric excess rain insurance cover?
Parametric excess rain insurance covers any economic loss resulting from excess rainfall, including property damage, business interruption, and extraordinary expenses incurred to manage the event. Because payout is triggered by the rainfall index itself rather than a damage assessment, direct physical damage does not need to be confirmed for a claim to be paid—a qualifying rainfall event alone is sufficient.
How does the excess rain insurance claims process work?
The process generally follows five steps: the client notifies their broker and the insurer of a loss; an independent certifier retrieves the rainfall data and confirms whether the trigger threshold was met; an event report is generated specifying the payout amount under the policy's structure; the client submits a formal declaration of loss; the payout is released per the policy terms.
How does parametric excess rain insurance complement a traditional flood policy?
Traditional flood or rain-related coverage typically requires the event to be officially recognized and mainly compensates direct property damage, often with long claims delays, high deductibles, and limited coverage for indirect costs such as emergency response or service disruption. Parametric excess rain insurance pays based on the rainfall index regardless of the physical damage assessment, so it can provide liquidity for costs a traditional policy excludes—filling gaps in deductibles, coverage limits, or indirect-loss exclusions.
Contact Us
Whether you're quoting a complex risk, looking to break into new markets, or just curious about parametric insurance, our team is here to help you win. Reach out and we will get back to you within 48 hours.
