The frequency and severity of hail events across Australia have led to:
Traditional carriers requiring a costly damage assessment for a payout due to the complexity of the risk
Strict limits set by commercial insurers for hail and tightening prices for all-risk policies, leaving car dealerships underinsured for their hail exposure, needing supplemental coverage
Key benefits
Fresh capacity:
Parametric products offer an alternative to underinsured risks like hail.
Customised protection:
Flexibility and straight-forward structure tailored to clients needs.
Transparency:
Certainty of capacity and pricing year on year and payouts are triggered when hail stones of a pre-defined size are registered by the radar.
Timely claims payment:
BOM radar data allow real-time claims assessment, enabling a quick payout post-event providing additional financial protection within days following a hail event
Risk of hail damage increasing for car dealerships
In recent times, the risk of hail damage for car dealerships across North America has surged, with more intense and frequent hail events becoming the new norm. While climate change discussions often focus on natural catastrophes, hail isn’t usually the first thing that comes to mind. However, hail storms in the US currently cause property damage ranging from $8 billion to $14 billion annually. With global temperatures on the rise, hail events are getting stronger, leading to bigger hailstones and more violent storms. Consequently, there will be expected growth in financial losses over the years and decades to come.
Insurance challenges for car dealerships
Traditional insurance for car dealerships is often unavailable or offered at an exorbitant price. Recognizing the escalating risks and coverage gap, Descartes introduces an alternative risk transfer solution – parametric insurance products. These solutions provide car dealerships and businesses with more than just coverage; we offer a seamless claims experience coupled with swift payouts, ensuring businesses can recover faster and resume operations.
Descartes parametric hail insurance
Descartes’ innovative parametric hail insurance designed specifically to address the peril of hail damage. This innovative risk transfer solution stands as a shield against the unpredictability of hail storms. Dive into our comprehensive case study to learn how Descartes hail coverage empowers auto dealers / car dealerships to overcome challenges and secure their investments effectively.
case study example
Case study
Problem
A client experienced $620K AUD in damages after a severe hail storm hit their Sydney area dealership. With a $250K AUD sub-limit, their all-risk policy proved inadequate and they were left with significant uncovered losses.
Solution
At their next renewal, the dealership opted to carve out their hail exposure to a parametric cover. This increased their certainty of coverage and led to a reduction in their commercial insurance premium.
Result
Utilizing advanced hail radar-based data, together with their broker, Descartes could offer them a parametric cover structured to ensure prompt financial recovery from future storms.
In the wake of the December 2018 hail storm, the client would have been paid 100% of the sum insured with the structure outlined above.
The client would receive $620K AUD
