Understanding Weather Triggers

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4 min read

Common trigger types:

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Data sources:

  • NOAA weather stations (U.S. standard)
  • Open-Meteo historical and real-time data
  • Weather.com commercial data feeds
  • Satellite-derived data (for remote locations)

    • Setting the right strike level:

    Work backward from your client's business. What wind speed actually keeps their customers away? At what rainfall amount do they close early? The trigger should match business reality, not arbitrary thresholds.

    Explaining basis risk to clients:

    "There's a small chance the trigger fires and you're fine, or it doesn't fire and you're impacted. Here's why the certainty of payout still makes this worth it for your situation…"

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