Markets/Coverages: Descartes Launches Parametric Tornado Coverage for Solar Farms

Descartes Underwriting has announced the launch of a parametric insurance product to protect utility-scale solar farms against tornado damage.

According to a press release, the coverage uses satellite data and analytics to insure transition-sector investments against physical damage, business interruption and other intangible impacts of tornadoes.

The policy covers ground-based photovoltaic solar farms in the United States with generation capacity greater than 10 megawatts. Payouts are calculated when an identified tornado enters the mapped surface area of an insured wind farm and causes damage to panels, as identified by high-resolution satellite imaging. The percentage paid of the pre-agreed limit — up to $70 million — matches the percentage of surface area damaged.

For example, if the National Oceanic and Atmospheric Administration identified a tornado as crossing the site of a solar farm insured under a $50 million policy, and satellite images show that panels on 15% of the site suffered damage, the insured would receive a payout of $7.5 million — or 15% of the limit — within weeks of the event occurrence.

“Parametric tornado policy indexes are usually based on windspeed estimates,” said Sébastien Piguet, Descartes chief insurance officer and cofounder. He said that his company’s new product “combines the accuracy of on-site assessment with the parametric benefits of swift, transparent claims payments.”

Topics Catastrophe Natural Disasters Windstorm New Markets Agribusiness