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Earthquakes, Hurricanes, Hailstorms, and Other Catastrophic Damage
Parametric insurance to the rescue
By Austin James, CPCU, ARM
This article first appeared in The Communicator, Spring 2021. To read more, click here.
Every year our country experiences catastrophic weather threats in a variety of forms. This could come from hurricanes, wildfires, hail storms, earthquakes, and blizzards. Many of these events can cause damage that reaches into billions of dollars. There are a lot of insurance companies that protect against these catastrophic claims; however, most have high deductibles and there are a lot of exclusions. A product has arisen in the marketplace to fill the coverage gaps excluded by traditional insurance and help to pay for losses beneath the deductible: parametric insurance.
How Does Parametric Insurances Differ From Our Current Insurance?
Parametric insurance is an index-based insurance product that has been around for decades in the reinsurance space. Its goal is to provide immediate funds to the...