Extreme heat cover, the right coolant
parametric insurance cover to protect them from these sudden losses due to heat can come into play.
Parametric solutions are a type of insurance that covers the probability of a predefined event happening, instead of indemnifying the actual loss incurred. Last year, some 21,000 SEWA (Self-Employed Women's Association) workers, out of 2.9 mn members, were provided with an innovative heat insurance cover.
This year, the number has increased to 50,000. The insurance provides a critical risk solution by compensating for the loss of income due to extreme heat events.
The beneficiary gets a cash payout of ₹400 when the day's temperature reaches 40° C. Once it crosses 43° C, beneficiaries receive payouts between ₹535 and ₹1,800, depending on the heat's severity.
Premiums for these women are paid by SEWA and Climate Resilience for All.
Besides NGOs, National Disaster Management Authority is also initiating parametric insurance pools for enhanced disaster protection. The reason is similar: the biggest impact of natural calamities is on the poor, who can't pay insurance premiums.
