Addressing Tornado Risk for Solar Power Plants
Severe convective storms (SCS), which include tornadoes, hail, and straight-line winds, are some of the most frequent and destructive natural disasters in the United States. In 2023, SCS events resulted in a record-breaking $58 billion in insured losses.
Tornadoes, specifically, present a substantial threat to utility-scale solar assets, with their high winds and flying debris capable of shattering panels, twisting mounting structures, and damaging inverters. Even weak tornadoes, such as EF0 events, can result in extensive damage and financial losses.
Our satellite-based tornado product is designed to address the unique vulnerabilities of solar power plants. Using very high-resolution satellite imagery, it directly identifies solar panel damage without solely relying on estimated wind speed or EF categories. Payouts are based on the pre-agreed limit and are directly linked to the percentage of the client’s surface area affected, offering precise, transparent financial protection tailored to the needs of solar energy operators. Benefits of this innovative approach include a very high correlation between damages on the ground and the modelled payouts, effectively reducing the basis risk.
Assess
We assess and evaluate the client’s tornado exposure, leveraging our proprietary risk model.
Customize
Design a customized cover, fit to the client’s needs, in which payout structures are indexed according to percent of surface damage caused by a tornado.
Monitor
Upon policy inception, we monitor the insured's location for tornadoes to determine whether a qualifying storm has occurred.
Payout
Insured client receives a payout within days of reporting a loss, accelerating financial recovery and return to normal operations.
Our Parametric Approach to Tornado Exposure for Solar Operators
Our parametric tornado product is powered by an in-house tornado-risk model that utilizes highly granular tornado event data. This innovative methodology allows us to assess the likelihood of tornado occurrences for potential policyholders. By combining advanced risk modeling with a deep understanding of tornado behavior, we deliver tailored coverage solutions that align with each client’s unique risk profile and financial needs, even in high-exposure areas.
Working in close collaboration with brokers and clients, our team designs customized coverage structured around the percentage of surface damage caused by a tornado. This parametric solution guarantees swift compensation when a tornado impacts the client’s property, regardless of the tornado’s EF category. This ensures transparent and reliable payouts directly tied to the extent of damage.
With prompt funds available, clients can address physical repairs, mitigate revenue losses, or cover operational disruptions during recovery. This approach also integrates seamlessly with traditional property policies, providing supplemental financial protection to help solar operators recover faster and more efficiently.
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