What Is Parametric Insurance?

Parametric insurance is changing the way property owners and businesses manage risk. Unlike traditional policies that rely on claims adjustments, parametric coverage pays out automatically when predefined conditions are met, such as a specific amount of rainfall or wind speed. While it offers speed and simplicity, it also comes with unique risks and limitations. Understanding how parametric insurance works—and when it makes sense—is essential for making informed coverage decisions and ensuring you’re fully protected.