Hurricane season may be over, but the damages caused by Hurricanes Helene and Milton have left their mark - totaling more than $100 billion, according to Vortex Insurance data.
Many businesses were left with tens of thousands of dollars in out-of-pocket costs due to deductibles and losses not covered by insurance.
The company touted the increase importance of parametric insurance in the face of hurricanes.
For example, a senior care facility in Tifton, Georgia, located within the 20-mile radius coverage area for Helene, had a $65,000 insurance limit. Under its policy, the facility received a 70% payout, totaling $45,500 to address immediate needs while awaiting other traditional coverage to begin.
"When policies trigger, the claim payments are quick and require no documentation on the part of the policyholder, which makes things a little easier during a difficult time,” said Andy Klaus, vice president of business development and lead producer for Vortex.
Parametric hurricane insurance can be used by businesses to cover deductibles, losses from flood damage, or lost wages due to business closures. There are no restrictions on how the payout can be used, the company said.
Unlike traditional insurance, parametric hurricane insurance is based on parameters selected by the purchaser at least 30 days before the policy’s effective date. Purchasers can choose a 20- or 40-mile coverage area around their business location. If the recorded storm path of a major hurricane crosses into the coverage area, the policy triggers and the policyholder receives the payout. No proof of loss is required.
The payout is triggered automatically once the specified parameters are met, eliminating the need for policyholders to file a claim. This results in faster claim processing and quicker payouts for businesses to cover immediate needs. Businesses within 20 or 40 miles of Helene’s official NOAA storm path received their payouts by October 27.