Blue Marble Microinsurance and Nespresso have developed a pilot program to bring weather index insurance to coffee farmers in Colombia, according to a recent Artemis blog.
Coffee crops are exposed to great risk from weather conditions, and farmers in developing countries often lack insurance options. The program provides coverage for excess rainfall and drought during the developmental stages in which coffee is most vulnerable.
Satellite technology is used to obtain the data required to create the weather indices against which the parametric policies can be triggered. If excess rainfall or drought occurs in a covered area, payments can be made automatically and quickly without the need for time-consuming claims assessment.
“This pilot initiative helps to establish a support mechanism for smallholder coffee farmers in Colombia so that they can continue to thrive in the face of climate change,” said Guillaume Le Cunff, President and CEO of Nespresso USA.
The program is a good example of the growth of microinsurance, which provides affordable insurance coverage to low income populations in developing counties.
So your car got flooded and two thoughts immediately flash in your head: how am I going to get to work and how am I going to pay for this mess?
I can’t help you with the first question, but the answer to the second is easy: insurance.
Comprehensive auto coverage: If you’re one of the 78 percent of Americans that opted to purchase comprehensive auto coverage, you’re in luck. Standard comprehensive coverage will pay for damages to your car caused by water or flood, subject to a deductible. It’ll even cover you if hail smashes your windows to pieces and rain ruins your leather seats.
If your car is so water-logged that it’s inoperable, then it might be a “total loss” – meaning that paying to fix it is greater than how much your car is worth. If it’s a total loss, your insurance will pay you the actual cash value for the car (that’s the purchase price minus any depreciation since you bought the car) and then salvage it.
Not everything is covered: But comprehensive coverage is not all sunshine and roses. It won’t cover you for any of your electronic equipment in the car that’s not permanently installed (think: your GPS navigation if for some reason you don’t use your smartphone for that – but your smartphone isn’t covered either). Comprehensive is also probably not going to help you out if you left your windows open during a rainstorm, so keep your eye on that weather forecast.
What if I don’t have comprehensive coverage? Unfortunately, if you didn’t opt in for extra coverage, you’re probably out of luck. Basic auto insurance doesn’t cover flood and water damage. Your homeowners and renters policies probably also won’t help: these policies don’t cover damage from floods. If you have a newer or higher-value vehicle, this lack of coverage could be a serious problem.
As FEMA puts it, “anywhere it can rain, it can flood.” The odds are good that you live in a place where your car can get damaged from water or floods. Speak to your insurance agent or carrier about whether comprehensive coverage is the right move for you and your vehicle.
If you live in the projected path of Hurricane Florence, you should be prepping your home and finalizing your emergency and evacuation plans.
Here are some Dos and Don’ts to consider for prepping and riding out the storm.
Don’t go outside during the storm.This is a no-brainer. Even a category 1 hurricane can reach sustained winds of 74 mph. Category 5 winds are over 156 mph. Wind speeds like this can turn even small debris into deadly missiles. And don’t be fooled by the eye of the storm – there will be a period of calm before the hurricane force winds return from the opposite direction.
Don’t grill indoors.If your power goes out, don’t be tempted to throw some steaks onto a grill indoors. Charcoal or gas grills can release deadly levels of carbon monoxide.
Don’t drink non-bottled or untreated water. Flood waters are often filled with bacteria and other contaminants – including sewage. Don’t drink tap water – and don’t drink any water exposed to flood water, including bottled water. The FDA has tips on how to make your tap water safe to drink.
Don’t drink alcohol.I repeat: Don’t drink alcohol during a hurricane. You never know when you will need to evacuate at a moment’s notice or deal with a life-threatening emergency. You’re going to want all your wits about you while the hurricane is raging – lives could depend on it, yours included. That’s why some jurisdictions will ban alcohol sales prior to a hurricane.
Do stock up on lots of water. The CDC recommends at least 5 gallons of water per person. You may also want to buy iodine tablets to clean drinking water.
Do make sure you have more to eat than chips and salsa. Or bread, for that matter – you’re going to want to have lots of non-perishables with nutritional value, especially canned foods. A minimum 3 to 5-day supply per person is recommended.
Do prepare yourhouse properly. Clear your yard of furniture or anything else that could blow away. Cover your windows and doors using storm shutters or plywood – and stay away from windows and doors during the storm, if you can. Make sure your carbon dioxide detector has enough battery life to prevent CO poisoning. (Check out a longer list for house prep here. I.I.I. also recently gave some advice on preparing your home.)
Do be responsible and prepare for the worst. Make sure you have emergency and evacuation plans in place before the storm hits. Communicate these plans to everyone at your house. Find out where the nearest storm shelter is. Keep track of the storm. Have flashlights and extra batteries ready. Buy a first aid kit. Ready.gov has more advice here.
These are not exhaustive lists. Make sure to check governmental information for help on prepping for a hurricane. And be safe out there. Hurricanes are not a joke.
On July 16, FEMA launched its first catastrophe bond to transfer risk from the National Flood Insurance Program (NFIP) to the capital markets, reports the Artemis blog. This will be the first catastrophe bond to solely provide reinsurance coverage for flood risks.
FEMA is seeking $275 million of reinsurance protection from a FloodSmart Re Ltd. (Series 2018-1) issuance. FloodSmart Re, a Bermuda domiciled special purpose insurance vehicle, will seek to issue two tranches of notes that will be sold to insurance linked securities funds to collateralize underlying reinsurance agreements to cover a portion of the National Flood Insurance Program (NFIP) U.S. flood exposure.
The transaction will cover NFIP losses from flood events that are directly or indirectly caused by a named storm event impacting the United States and also Puerto Rico, U.S. Virgin Islands and District of Columbia.
By Sean Kevelighan, CEO, Insurance Information Institute
On May 27, for the second time in three years, Ellicott City, Maryland was ravaged by what meteorologists term a “1,000-year flood”—this while some businesses were still celebrating the one-year anniversary of their reopening after the August 2016 catastrophe.
As affected households and businesses assess the damage and pledge to rebuild (or to relocate) after this deadly event, one fact looms largest: that 1,000- or 100-year floods now seem to strike with numbing regularity. The time has come, then, for communities and individuals to accept this paradigm shift by embracing resilience.
Local, state and federal governments have a wide range of tools at their disposal to effectuate resilience, including public policy solutions and rebuilding/retooling critical infrastructure to withstand greater stresses. However, for business owners, homeowners, and renters, the most important step they can take is to close the “coverage gaps” that expose them to massive uninsured losses that can delay or prevent recovery. And for regulators and insurers, this creates an excellent opportunity for public/private solutions to meet this growing challenge head-on.
A deadly storm system pummeled the southern and central U.S. this weekend leaving many areas flooded. The weather system extended from the Canadian Maritime provinces to Texas, and brought gale force winds and widespread flooding from the northern Midwest through Appalachia.
Flooding will continue to be a threat this week, the Weather Channel reports, as more than 200 river gauges reported levels above flood stage from the Great Lakes to eastern Texas. Floodwaters on the Ohio River in Louisville and Cincinnati are at their highest level in about 20 years.
Flood damage is excluded under standard homeowners and renters insurance policies. However, flood coverage is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers.
Below is a look at the National Flood Insurance Program’s flood insurance penetration rates in just a few of the affected areas. The table illustrates the low penetration rates of flood insurance.
The New Yorker magazine reported recently on the work of the Buoyant Foundation Project, an organization that provides architectural flood mitigation solutions for vulnerable populations.
Amphibious architecture allows an otherwise-ordinary structure to float on the surface of rising floodwater. An amphibious foundation retains a home’s connection to the ground by resting firmly on the earth under usual circumstances, but allows a house to float when flooding occurs.
A buoyant foundation is specifically designed to be retrofitted to an existing house that is already slightly elevated off the ground and supported on short piers. Under the house the foundation’s buoyancy blocks provide flotation, vertical guideposts prevent the house from floating away, and a frame ties everything together. Any house that can be elevated can be made amphibious.
Amphibious retrofitting has not yet gained widespread acceptance, and buildings with amphibious foundations are not eligible for subsidized policies offered by the National Flood Insurance Program.