By Simon Jessop
LONDON (Reuters) – Conservation group The Nature Conservancy has purchased a new, expanded insurance policy that could see up to $2 million paid out to help protect coral reefs around the main islands of Hawaii in the event of storm damage.
The policy is an example of so-called parametric insurance, which pays out when certain predetermined triggers are reached and is increasingly seen as a quicker way for money to be disbursed to damaged areas in the event of natural disasters.
It also follows a landmark deal among the world’s governments to protect biodiversity and a greater focus during annual climate talks in Dubai in December on helping provide finance to better protect nature.
Describing the new cover as “a major upgrade”, TNC said it added an extra 314,976 square kilometers to the coverage area.
The minimum payout also increased to $200,000 to enable “a more meaningful response”, with a cap of $1 million per storm.
The policy is triggered when tropical storm winds of 50 miles an hour or more hit the coverage area. While the previous policy was not triggered, worsening climate impacts meant the new policy was needed, TNC said in a statement.