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Organizations Involved: Environmental Defense Fund
Source: Initiative on Climate Risk and Resilience Law


The concept of parametric insurance, while not new, is getting increased attention as a way to provide faster and more flexible funds to victims of disasters and as a tool to provide post-disaster funds for emerging and otherwise difficult-to-insure risks. There is also hope that parametric policies can broaden disaster insurance coverage, improving financial resiliency to everworsening climate extremes. Applications in the U.S. to achieve these public policy goals have been limited to-date, but are now starting to expand. This primer explains the concept of parametric insurance with a focus on its use in providing financial protection against disasters.

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