• Weather insurance offers financial protection against losses that may be incurred as a result of adverse, measurable weather conditions.

  • Premiums are determined by the probability of occurrence of the insured weather event and the size of the potential loss.
  • Conventional weather insurance usually covers unlikely weather events, including hurricanes, earthquakes, and tornadoes.
  • Protection against meteorological events with a high probability can be provided with the help of weather derivatives, a financial tool for hedging the risk of losses associated with the weather.