Wildfires are becoming increasingly frequent and severe across the United States, putting significant financial pressure on Homeowners Associations (HOAs) and Condominium Owners Associations (COAs). In fact, Natural catastrophes in the United States alone accounted for roughly 95 percent of global insured losses in the first quarter of 2025, with wildfires as the dominant driver. Q1 economic losses in the United States reached almost $71 billion—the highest figure since 1994 and significantly above the Q1 average since 2000 of $12 billion.
Descartes' parametric wildfire insurance offers HOAs and COAs a transparent, data-driven complement to traditional coverage. Using satellite imagery combined with climate and weather intelligence, the product monitors burnt areas within a predefined radius around the insured location, triggering a rapid payout when a wildfire breaches that perimeter—no lengthy claims process, no deductibles, no uncertainty.
How it Works
- Coverage Area Definition: During the quoting process, underwriting defines a buffer zone—typically a 100-meter radius—around the insured location(s). This becomes the trigger perimeter for the policy.
- Continuous Satellite Monitoring: Publicly available, high-resolution satellite imagery from sources such as the European Space Agency's Sentinel 2 continuously monitors the coverage area for wildfire activity.
- Trigger Activation: If a wildfire breaches the predefined perimeter, the policy trigger is activated. A declaration of loss is submitted by the client and broker, along with a first loss notice of the event.
- Independent Verification: A certification agent retrieves satellite data from the data provider, and a calculation agent confirms the burnt area map and corresponding payment amount.
- Swift Payout: Upon verification, the client receives 100% of the insured limit—typically within a matter of weeks, with no claims adjustment or on-site inspection required.
Why Choose Descartes’ Parametric Hail Insurance?
✔️ Satellite-Powered Precision
Our solution relies on high-resolution satellite imagery capable of identifying burnt areas down to 10x10 meters, enabling highly accurate detection of localized wildfire activity directly around your insured location.
✔️ Fast, Certain Payouts
Payments are issued within days or weeks of a verified trigger event. This speed provides HOAs and COAs with the immediate liquidity needed to manage emergency response costs and protect reserve funds.
✔️ Flexible, Scalable Coverage
With limits of up to $100 million per contract and support for single or multi-location policies across short-term, annual, or long-term agreements, the product adapts to the complexity and scale of any association's risk profile.
✔️ Seamlessly Complements Traditional Insurance
Whether used as a deductible buydown, a coverage gap layer where wildfire is excluded or sub-limited, or as extra capacity beyond what traditional markets can offer, Descartes' parametric solution integrates directly into existing insurance programs.
Want to Learn More?
Download our product sheet (PDF) to:
- Learn more about our satellite-based wildfire solution, relevant locations, quote requirements, and more.
- View an example payout scenario.
- Discover more details about the product in our Frequently Asked Questions section.
Interested in a solution?
Contact our commercial team.
FAQ
What constitutes a wildfire?
A wildfire is defined as an unmanaged and uncontrolled fire that has its ignition or starting point outside the coverage area and has not been caused by either intentional and/or willful misconduct, as defined in the policy terms.
How is the coverage area defined?
The coverage area is determined by taking the insured location(s) and adding a buffer of a predefined shape, typically 100 meters, around the insured location(s). The exact geometry of the buffer area would be determined by underwriting during the quoting process, in collaboration with the broker and client.
What is the resolution of the data?
Depending on the satellite imagery data source, the resolution can be upscaled to 10x10 meters. The use of extremely high-resolution data lets us capture very localized fires, enabling us to correctly identify burnt areas with high precision
What data providers are used?
We use publicly available satellite imagery data sources such as Sentinel 2 published by the European Space Agency. The data provider would be predetermined and outlined in the policy
What types of damages are covered?
A parametric policy covers any economic loss sustained from a triggering event, including but not limited to property damage, business interruption, & extra expenses. There does not have to be direct physical damage to trigger coverage, but a declaration of loss statement is needed.
How does the claims process work?
Client’s side:
1) The client and broker files a first loss notice of event.
2) The client and broker informs the insurer of the loss resulting from the wildfire.
Insurer’s side:
1) The independent certification agent retrieves satellite data from the data provider.
2) The calculation agent informs the insurer of the burnt area map and payment. After receiving the event report and declaration of loss, the client will receive a payout. The overall claim settlement is defined in the insurance policy and is usually a matter of weeks.
When does parametric insurance make sense?
Parametric coverage is ideal for clients who own property in high wildfire exposure zones, those who have experienced significant losses or challenging claims, or clients facing coverage limitations due to building materials or construction-phase exposures. It also helps fill protection gaps and provides fast, predictable payouts without delays or complexities.
