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Frederick Millán, president, United Surety and Undemnity Company, stand in front of signage for the company. (Photo courtesy USIG)

Puerto Rican insurer launches micro insurance for hurricanes, earthquakes

Frederick Millán, president, United Surety and Undemnity Company, stand in front of signage for the company. (Photo courtesy USIG)

Puerto Rico insurer United Surety & Indemnity Co (USIC) has launched its parametric micro insurance products for hurricanes and earthquakes to provide homeowners and tenants with emergency cash once their policy is activated if such events occur.

Parametric micro insurance is a policy that covers the probability that a predetermined event occurs and pays the insurer once the parameters defined by the policy are activated. Different from a traditional policy, the parametric   does not require physical damage to the property and the policyholder receives compensation without adjustment or a deductible.

USIC Vice-President and Chief Risk Officer Rafael Blanes said, “As an insurance agency, we recognise the difficulties to afford unforeseen spending after a hurricane or an earthquake. Therefore, we have introduced in both products the alternative to obtain emergency cash to cover immediate needs or the expenses that arise after such emergencies”.

United Surety & Indemnity Company Vice-President and Chief Risk Officer Rafael Blanes (Photo:


In case of a hurricane, this micro insurance uses a property’s location to determine whether coverage is active when the path of the eye of a category 3 hurricane is within 50 miles or less from the property. Based on the information published by the National Hurricane Center (NHC), the payment to be received is calculated depending on the distance from the eye of the hurricane, the location of the property, and the maximum speed of the sustained winds.

“After the hurricane, we will pay the insured from US$200 up to US$4,000, depending on the alternative the client chooses and the parameters activated,” Blanes explained.

 Electricity poles and lines lay toppled on the road after Hurricane Maria hit the eastern region of the island, in Humacao, Puerto Rico, Wednesday, Sept. 20, 2017. (Photo: AP/Carlos Giust)

“The applicable parameters vary according to the insurance type, but are always specific, and measured with public and accessible information, from reliable sources such as the NHC and the United States Geological Survey.”

As for the earthquake parametric insurance, it uses the location of the property to determine if the coverage is activated if a 6.5-magnitude earthquake or greater is registered on the Mercalli intensity scale. The determination to activate the policy is calculated according to the data provided by the USGS. The payment will be from US$3,750 up to a maximum of US$30,000 depending on the alternative chosen by the client and the applicable parameter, USIC said.

A police officer, wearing s protective face mask as a precaution against the spread of the new coronavirus, removes debris caused by a 5.4-magnitude earthquake, in Ponce, Puerto Rico, Saturday, May 2, 2020. The quake hit near southern Puerto Rico, jolting many from their beds on an island where some people still remain in shelters from previous quakes. (Photo: AP/Carlos Giusti)

The hurricane parametric micro insurance has annual premiums starting at US$125, while the earthquake parametric micro insurance premiums start from US$115.