Weather the Storm: How Parametric Insurance Pays Out in 24 Hours (Not 24 Months)
Download MP3What You'll Learn In This Episode:
- What is parametric insurance and how it can help property owners in high-risk markets
- Why traditional insurers are pulling out of markets affected by hurricanes, earthquakes, fires, floods, and hailstorms
- How parametric insurance works differently from traditional policies - no lengthy claims process, just trigger-based payouts
- Real-world examples of parametric triggers:
- Wind speeds over 100 mph within 20 miles of your property
- Earthquakes above 5.0 on the Richter scale
- Hail larger than one inch
- Fires occurring within a certain radius of your home
- Key benefits of parametric insurance:
- Fixed, predetermined payouts (e.g., $100,000-$200,000)
- Much simpler claims process
- Fast settlements - just need confirmation from weather services or official data sources
- Reasonable premiums with various limits and deductibles available
- Important considerations:
- Requires working with a surplus lines licensed broker
- Different from standard admitted carrier policies
- Can be used to replace or enhance existing coverage
- Coverage applications:
- Property protection
- Business interruption
- Loss of sales coverage
- Commercial real estate
- Why parametric isn't as foreign as you think - life insurance is actually the most common form of parametric insurance (fixed payout upon death with just a death certificate required)
- Who should consider parametric insurance: Property owners and businesses in areas where traditional insurers are limiting or canceling policies
Looking for parametric insurance coverage? Consult with a licensed broker who specializes in surplus lines and parametric products to understand if this innovative insurance solution is right for your situation.
