Descartes Underwriting Launches $70 Million Parametric Insurance Solution for Solar Farms
Descartes Underwriting has introduced an innovative parametric insurance product designed specifically to protect utility-scale solar farms in the United States from tornado damage, offering coverage of up to $70 million. This solution aims to address the increasing risks associated with severe weather, particularly tornadoes, which pose a significant threat to solar power infrastructure.
The Need for Tornado Insurance in Solar Energy
With the surge in extreme weather events, the insurance sector is adapting by developing more efficient ways to safeguard crucial assets that contribute to the renewable energy transition. The new parametric insurance policy from Descartes ensures that solar farm owners are financially protected against losses caused by tornado damage, allowing them to maintain operational continuity.
How the Parametric Insurance Works
- The product is tailored for solar farms with a generation capacity exceeding 10 MW.
- Payouts are determined based on the extent of damage to the solar farm’s surface area.
- The policy utilizes advanced technology to deliver quick and efficient claims processing.
According to InsurTech Insights, this innovative insurance product leverages satellite imagery and advanced analytics to assess damage accurately after a tornado strikes.
Benefits of Descartes’ Tornado Insurance
The new insurance policy encompasses various types of losses, which include:
- Damage to solar infrastructure
- Business interruption costs
Descartes’ Chief Insurance Officer and Co-Founder, Sébastien Piguet, highlighted that traditional parametric tornado policies often rely on wind speed estimates. In contrast, Descartes’ unique product minimizes basis risk by utilizing state-of-the-art technology for on-site assessments and ensuring swift, transparent claims payments.
Technology Behind the Coverage
This pioneering insurance policy uses data from the National Oceanic and Atmospheric Administration (NOAA) combined with satellite imagery to rapidly evaluate damage caused by tornadoes. Tanguy Touffut, Co-Founder and CEO of Descartes, noted that advancements in data processing allow for a shift away from conventional insurance methods, paving the way for solutions that better protect investments impacted by climate change.
As the frequency of Severe Convective Storms rises, this parametric insurance product stands out as a critical tool for safeguarding renewable energy investments. For more information on renewable energy insurance solutions, visit our renewable energy insurance page.
