Coastal flooding remains one of the most destructive and costly consequences of storm surge in the United States. Even structurally resilient assets can suffer significant financial losses when operations are disrupted; or surrounding infrastructure becomes unusable. Flooding is the second-costliest peril on average globally, having generated over $2 trillion in cumulative economic losses since 2000.
Descartes' parametric storm surge insurance provides fast, transparent financial protection for coastal exposures vulnerable to hurricane-induced coastal flooding. Leveraging advanced storm surge modeling and objective water elevation measurements, the solution delivers rapid payouts based on the maximum modeled water level at the insured location, helping organizations recover quickly from physical damage, uninsured losses, and Non-Damage Business Interruption exposures.
How it Works
- Coverage Area Definition: The insured location is mapped using GPS coordinates, shapefiles, or detailed property boundaries provided during underwriting.
- Storm Surge Event Monitoring: Following a hurricane, advanced storm surge models calculate maximum modeled water level across the insured area.
- Third-Party Verification: An independent certification agent validates modeled water levels using official hurricane tracks, NOAA gauges, and other ground-truth data sources.
- Index Calculation: The policy measures the maximum modeled water level affecting the insured location and compares it against predefined payout thresholds.
- Automatic Payout Determination: Payouts are calculated according to the agreed schedule based on the severity of the surge event.
- Fast Financial Recovery: Once the event report is completed, funds are released rapidly to support recovery and business continuity efforts.
Why Choose Descartes’ Parametric Storm Surge Insurance?
✔️ Rapid Liquidity After Major Coastal Flood events
Funds are released quickly following a triggering event, helping organizations address urgent financial needs while traditional claims processes remain ongoing.
✔️ Designed for Coastal Flood Risk
Unlike broader hurricane covers, this solution specifically targets storm surge exposure and the financial impacts of coastal flooding.
✔️ Coverage for Uninsured Financial Losses
The policy can help address costs often excluded or inadequately covered under traditional programs, including operational disruption, debris removal, landscaping expenses, and NDBI losses.
✔️ Robust Data & Independent Verification
Payouts rely on advanced storm surge modeling combined with third-party certification and official data sources, ensuring transparency and consistency.
Want to Learn More?
Download our product sheet (PDF) to:
- Learn more about our storm surge solution for coastal exposures, eligible locations, and quote requirements.
- View an illustrative payout structure based on modeled water level.
- Discover more details about the product in our Frequently Asked Questions section.
Interested in a solution?
Contact our commercial team.
FAQ
How is the coverage area determined?
The coverage area is delineated by the layout of the insured location(s), as outlined in the request for quotation provided by the mandated insurance broker.
How is the data source able to assess the percentage of loss?
Using leading storm surge modeling technology, our data partner integrates National Hurricane Center official hurricane tracks and official topographical sources to produce a storm surge footprint. This footprint determines the storm surge flood extent and water elevation in the coverage area. A third-party certification agent uses this footprint, in addition to NOAA gauges and other ground-truth data where applicable, to calculate the loss.
How is a storm surge policy triggered?
1. Following a hurricane event, the client sends a loss notification.
2. Storm surge footprint data is then assessed by the data provider within days.
3. Payout is promptly executed based on the data provider’s event report with the modeled peak water elevation at the insured location(s) listed in the report.
How is the index computed?
We average the maximum water elevation of the entire perimeter reported by our data provider.
Why did you create a special product for storm surge?
Following major hurricanes such as Hurricane Ian, we aimed to close the protection gap by developing this tailored solution based on robust modeling providing improved accuracy for hurricane-induced flood risk on the coast.
How does this compare to a Cat-in-a-Circle (CiC) cover?
CiC offers broad coverage for hurricane-related financial losses caused by both wind and flood, based on a named storm’s track and intensity within a pre-agreed coverage area, even many miles inland. In contrast, our storm surge product is designed specifically to protect against floodrelated financial exposure for coastal assets near the shore, regardless of the track or intensity. This cover is determined by the modeled maximum water elevation at the asset’s location.
How does this complement traditional insurance programs?
Our product complements traditional insurance by providing fast liquidity after a triggering event to help cover financial impacts that may not be fully addressed by indemnity policies, such as deductibles, delays in claims settlement, operational disruption, and other uninsured or excluded costs.
Where is it available?
It’s available for the West Coast of Florida and in the Galveston Bay region of Texas. Other areas along the gulf may be available upon request.
