Insurance for potential damages from excessive solar heat in India

A discussion has emerged regarding the 'Parametric' insurance scheme operating in India to protect vulnerable communities affected by climate change, such as severe solar heat and heavy rainfall. This insurance provides financial relief, especially to low-income women in India who face health risks when working outdoors during periods of high temperatures.

Unlike traditional insurance methods, damage assessment is not carried out here, and payments are made automatically as soon as the specified environmental thresholds are exceeded.

Lata Solanki, a 42-year-old garment seller in Ahmedabad, India, is one such beneficiary, and this insurance provides her with the financial strength to stay home when the temperature exceeds 43.72 degrees Celsius. It is highlighted that receiving more money as relief than the insurance premium is very important, especially given India's average rural monthly income of around 10,000 rupees. According to the Lancet Countdown research team, India lost 247 billion working hours due to high temperatures in 2024, with an economic cost of approximately 194 billion US dollars.

This program, implemented jointly by Mahila Housing Trust (MHT) and 'Go Digit' insurance company, aims to cover over 30,000 women in Gujarat state. Payments ranging from 850 to 2,000 rupees are received based on temperature increases, and the government has also introduced similar insurance schemes for damages caused by heavy rainfall in states like Nagaland, India. Although there are some concerns about its effectiveness, this transparent insurance mechanism is stated to be extremely important for building resilience in the face of climate change.