Weather Insurance

Weather Insurance Overview:

The wrath of nature can not only be unpredictable, but also destructive. Natural calamities can affect us at various levels, and more viciously than we anticipate. To protect us from extreme weather conditions/variations, insurance companies offer weather insurance.

This type of insurance provides coverage against financial losses incurred which can be caused due to natural calamities/extreme weather conditions like storms, snowing, rain, fog, wind, sudden temperature dip or rise, etc. This type of insurance is ideal for those who depend on agriculture for their livelihood, film producers (to protect their film sets from damages during an outdoor shooting), etc.

Agriculture is an extremely dominant sector in India, especially because majority of the Indian population earn their living from the farming and agriculture. As it is evident that agriculture and farming is hugely dependent on the weather. A season without adequate rain or too much rain can ruin cultivation of crops magnanimously. This can impact the country’s agricultural output, GDP and economy. Being a highly vulnerable industry, agriculture sector must be protected with a comprehensive weather insurance policy.

Benefits of Weather Insurance Policy:

Weather insurance is ideal for farmers, film producers, agricultural managers and operators (whose repayments are affected by harsh weather conditions), banks, to protect them from financial losses caused by the climatic conditions.

Weather Insurance Plan Covers:

  • If there is a deviation of the observed weather index from strike index, it shoots up the operational cost with reference to agricultural/non-agricultural economic activity. The policy covers the same.
  • If extreme weather conditions harm the production of your crops. This can happen in a specific geographical and particular season, you are covered against such a loss.

Weather Insurance Policy Exclusions:

  • Damages caused due to nuclear waste, combustion or fuel.
  • Loss or damage caused due to radioactive, explosive toxic or hazardous properties explosion.
  • Loss or damages caused due to terrorist activities.
  • War, foreign invasions, unlawful operations, civil war, anti-social activities, hostilities, rebellion, detention, seizure, confiscation, etc.
  • Man Made anti-social activities like riots, strike, malicious acts, pollution contamination, and other damaging conditions which are not pertaining to the weather.

Companies providing Weather Insurance are:

In India the leading insurance providers for weather insurance are

HDFC Ergo

ICICI Lombard General Insurance

Documentation Required:

It is mandatory to provide the following documents to buy a weather insurance –

  • Valid photo identity proof
  • Land record – pertaining to the standing crop for which the insurance is taken

Weather Insurance Claims process:

The claim process is relatively simple and hassle-free. The assessment shall be conducted and the claim shall be settled based on the documents furnished. In case of the particular geographical location and at that particular time period provided in the policy wordings, the Actual Total Index of the coverage criteria deviates from the predetermined Index according to the product.

The company will get the weather data from the weather data agency. This happens once the policy period for claim settlement has been completed. The compensation shall be paid only according to the compensation payment formula listed down in the policy wordings. This amount shall be arrived at by the insurance company and paid to the policyholder, following all the terms and conditions of the policy.

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