A north Queensland-based underwriting agency is marketing a unique parametric wind insurance cover to support property owners in cyclone-prone northern Australia.
Redicova has alerted Queensland insurance brokers to the product and how it can provide consumers with payments quickly after a severe tropical cyclone passes over their insured address.
Redicova Managing Director Karen Hardy says with the Bureau of Meteorology (BoM) predicting it is likely there will be an above-average number of tropical cyclones for the 2022–23 Australian tropical cyclone season, the cover can help households and businesses get back on their feet quickly after a cyclone.
The season started on 1 November and runs to 30 April.
Since Australian records began in 1969–70, the average number of tropical cyclones that form in a season in the Australian region is 11, four of which typically cross the coast.
However, the established La Niña in the tropical Pacific Ocean and warmer-than-average sea surface temperatures north of Australia have influenced this year’s cyclone outlook.
Ms Hardy says parametric insurance pays claims based on event triggers, unlike traditional indemnity insurance that compensates policyholders for assessed losses.
Redicova pays an agreed lump sum that is triggered when the BoM declares a severe tropical cyclone which passes over an insured’s address.
“It’s not designed to replace traditional insurance, such as home, business, strata or farm coverage, but to complement it,” Ms Hardy says.
“Redicova focuses on speed of delivery – we pay within three business days of receiving a claim, no questions asked. We specialise in uninsurable risks like crops and economic loss. We are not property insurers.”
Redicova is available for locations in northern Australia along the coastline and up to 300km inland in postcode zones between Carnarvon in WA (postcode 6701) to Bundaberg in Queensland (4670) including the Northern Territory.
Ms Hardy says insurers are often slow to finalise claims under the traditional indemnity insurance model. The time between an event and settlement can drag out for months or even years, which prompted her to design a parametric product, backed by Lloyd’s, that pays claims fast.
Living and working in Tully, 140km south of Cairns, Ms Hardy has personally experienced the damage and despair severe tropical cyclones create.
“You can insure with Redicova for as little as $1,000 based on your needs and budget.
Redicova pays 100% if you are in the path of very destructive winds and 30% to those within a 5km buffer zone.”
Ms Hardy says applications for Redicova are myriad. “It can be used to reduce traditional premiums, insure the uninsurable, or protect cash flow and income after a severe tropical cyclone.”