Evolving trends for hail exposure & opportunities for hail insurance innovation
Hailstorms are the primary driver of severe convective storm losses in the U.S., accounting for 50-80% of claims annually and causing billions in insured losses, particularly impacting industries reliant on outdoor infrastructure.
As industries like agriculture and renewable energy continue to grow, business expansion into risk-prone areas creates a complex challenge that the traditional insurance market struggles to fully cover, leaving companies vulnerable to financial losses.
Descartes’ Parametric Hail Cover fills the gap. Each policy is tailored to the client’s needs and budget, utilizing local radar data to precisely assess hail exposure.
Why Choose Descartes’ Parametric Hail Insurance?
- Robust Radar Technology: The hail risk is assessed with high granularity, observing hailstone size and storm intensity.
- Direct Monitoring: Hailstorms are monitored directly, eliminating the need for on-site visits.
- Swift Indemnification: With real-time hail detection, payments are quickly released after a policy has been triggered.
How It Works
After a hailstorm event, we obtain the Maximum Estimated Size of Hail (MESH) calculated by our data provider based on local radar data, along with the insured area(s) impacted by the event. Once the hailstone size has been confirmed, a payout is quickly released according to the predetermined payout structure.
See an Example of a Payout Structure in Action
Download our product sheet (PDF) to see our radar-based hail solution in action and how it can protect businesses at risk.
FAQ
What is the data source?
We use imagery from ground-based radars that are operated by the local meteorological agency.
How is the hail size determined?
The Maximum Estimated Hail Size (MESH) is determined by the data provider through an automated system which integrates the imagery from the U.S. radar network, as well as surface observations and numerical weather prediction models.
What damages are covered?
Our parametric policy covers any economic loss
sustained from a triggering event, including but not limited to property damage, business interruption, and additional expenses. There does not have to be direct physical damage to trigger coverage.
How does the radar detect hail?
Radars continuously scan a wide range of atmosphere surrounding the asset location. The scans detect the presence of clouds, and the characteristics of particles contained within the clouds, such as water droplets, snow, hailstones, etc. This allows for precise detection of the hailstones and their size in diameter. Post-processing techniques enable the distinction between hailstones, rain, and snow.
Can this be part of a multi-peril policy?
Yes, it can be partnered with any other parametric policy (e.g., tornado, cyclone, etc.).
How does parametric insurance help with the recapture risk of tax credits?
Investment tax credits (ITC) are subject to recapture if the property is no longer a qualified energy facility or a change in ownership occurs. Due to its flexibility in design, our parametric hail cover can address any resulting coverage gaps that project developers and lenders may be exposed to in their traditional insurance policy.
How does the claims process work?
Client’s side:
Insurer’s side:
