On sweltering summer mornings, Laxmiben Nadia leaves her shanty by 8 a.m. to collect waste in the Vatva neighborhood of Ahmedabad, one of the hottest cities in western India's state of Gujarat.
Draping her sari so she can cover her face and protect herself from the putrid smell of the rubbish mound, Nadia, who's 57, sorts through the massive waste garbage dump, stretching over 6 miles on the city's outskirts, to earn a living for her family of five. There are over 50,000 waste pickers like her in Ahmedabad — and nearly 1.5 million in India.
One day last summer, just past 9 a.m. Nadia had completed one round, collecting plastic and discarded metals that she typically sells to scrap traders for about $4. Though sweating profusely, she contemplated another round but suddenly fell to the ground.
"I did not realize what happened to me as I laid there for around 20 minutes and was unable to get up," recalls Nadia, who is from India's historically and socially marginalized Dalit caste (formerly known as "untouchables").
Her fellow waste pickers hurriedly arranged for a motorized rickshaw to take her to a small government clinic, where the doctor informed that she had suffered temporary paralysis due to the heat.
The relief of a $14 payout
This wasn't the first time Nadia had suffered ill effects from heat. But this incident had a different outcome. After treatment for heat stroke, which cost less than a dollar, she lost a week of work while recovering. But she didn't panic about paying her bills. She received $14 in two installments through a newly instituted parametric heat insurance program. The word parameter refers to a measurable event — in this instance, a certain temperature — that would trigger a payout to replace income lost by daily wage workers who stay home to protect their health during extreme heat.
That's a critical benefit in India, which is seeing record-breaking heat waves linked to climate change. Last year, several Indian cities recorded a staggering 52.3°C (126°F), resulting in over 48,000 cases of heat stroke and 161 deaths, according to official data — a figure scientists believe is significantly underreported.
Parametric insurance programs are being introduced and gaining ground in India, offering financial protection for climate-linked losses — ranging from income lost by daily wage workers during heatwaves to reduced earnings from farmers because of heat-stressed livestock (which produce less milk and are less fertile and more disease prone) and damage to crops caused by excessive rainfall.
The insurance program that came to Nadia's aid is a collaboration between the Ahmedabad-based Self Employed Women's Association (SEWA) — a trade union of over 3 million informal women workers — and the nonprofit , which provides technical expertise and co-funding for the insurance program. Piloted in 2023 across 22 districts, including Ahmedabad, the program now covers 50,000 SEWA members who voluntarily enroll and pay $3.50 as part of the annual premium. The remaining cost of the insurance premium for each worker — about $4.73 — is covered by Climate Resilience for All.
The premium payments go to the Indian insurance company ICICI Lombard, who handles local delivery of payouts — and to global insurance provider Swiss Re, which covers part of the payout in case of large claims.
These payouts are triggered based on region-specific temperature thresholds. In Ahmedabad, for example, members receive $8.78 if daytime temperature exceeds 43.6°C (or 110.48 F) for two consecutive days, and $14.63 if it crosses 44.1°C (111.38 F) for two days in a row. Members get one payout for each qualifying heatwave, regardless of whether they keep working or suffer any direct loss. In 2024, the program disbursed around $350,859 to enrolled SEWA members. Most payments are processed within six to eight weeks of the heat threshold being met.
"I used the insurance money to set up a small food cart in the evenings, where I sold boiled eggs and omelets with bread," Nadia says cheerfully. While the income was modest, she was able to earn a dollar or two each night.
Pankaj Tomar, India Head of AXA Climate — a division of the French multinational insurance company AXA Group — says parametric insurance offers an accessible safety net for informal workers facing climate related risks like extreme heat and floods. Tomar is not affiliated with this program.
How parametric insurance works
Unlike traditional indemnity insurance, which only pays out when sickness is proven through medical documentation, parametric insurance doesn't require filing a claim. Instead, it offers automatic payouts when specific thresholds, such as a certain temperature or rainfall level, are crossed.
"Most health insurance policies don't cover the kinds of health risks informal workers face, especially those caused by climate change," says Tomar. "Parametric insurance is unique because it's designed to respond to climate-related health hazards, which traditional policies fail to cover. What sets it apart is that people don't need to prove their losses or fill out tedious paperwork, and they can use the payout however they want," he adds.
The record-breaking heat waves have heightened the risk of income loss, poor crop yields and an increase in vector-borne diseases for 90% of India's population, according to a PLOS Climate study published in April 2023.
"The idea of compensating for lost work hours due to heat is highly effective in countries like India, which has a large population of gig workers and daily wage laborers who are forced to either work in hazardous conditions or go hungry," says Akshay Deoras, a research scientist at the National Centre for Atmospheric Science and the Department of Meteorology at the University of Reading.
There are also parametric insurance programs like the U.N. Capital Development Fund for cyclone affected countries like Vanuatu, Tonga, and Fiji. In India's flood-prone northeastern state, Nagaland was the first to insure its entire population, against heavy rainfall through parametric insurance in 2020.
Called the Disaster Risk Transfer Parametric Insurance Solution (DRTPS), it disbursed over $117,000 in March this year to residents affected by the 2024 monsoon.
When it comes to either rain or heat, the threshold set for payouts is critical. When SEWA piloted its parametric insurance scheme in 2023: the temperature threshold set for payouts was too high, so even on extremely hot days, the women covered didn't receive compensation.
"Now we have adjusted it to a more appropriate range," says Anisha Baghban, SEWA's secretary.
A day off for the first time in decades
For 40-year-old Shobha Ben Bimabhai, another member of SEWA, the insurance payout for extreme heat allowed her to do something she hadn't done in 30 years: Close her home decor shop for a couple of days — she runs it from an outdoor wooden pushcart where she stands in direct sunlight for hours.
"This summer was unbearably hot, and even customer footfall decreases on hot days," Bimabhai says. Because authorities don't allow vendors like her to stay open after dark, she has no way to shift her work to cooler hours.
"Regardless of the weather, I had to go to work, but this time, I took two days off," she says, adding, "I used the money to pay for my daughter's one month school fee and buy her a few books."
Baghban says that the insurance program has helped thousands of women, like Nadia and Bimabhai avoid exploitative situations, such as taking out loans with punitive repayment plans because of income loss during extreme weather. "Our goal is to ensure that daily wage working women also lead a life with dignity," she adds.
Despite its current success, Deoras, the research scientist, argues that parametric insurance should not be the only source of support for gig workers facing extreme weather. He emphasizes the need for government-led risk reduction measures: shaded public rest areas, improved access to drinking water and early warning systems to alert people to potentially risky levels of heat. "The insurance program should also be expanded to cover other climate-related threats, like drought and air pollution, as climate risks grow," he adds.
Baghban agrees. "We are planning to propose the scheme to the state government because the challenge now is to scale the initiative to other regions, and that will be difficult without government support," she says.
"I never thought an insurance scheme could be for someone like me," says Nadia, adding that with her limited income, traditional health insurance has always seemed too expensive. Now, she says, the parametric plan, "even for a short while, helped me manage my daily expenses when I needed to rest."
Jyoti Thakur is a freelance journalist based in New Delhi, India. She reports on gender, environment, health, and social justice. Her work has been published in The Guardian, Al Jazeera, Nikkei Asia, Deutsche Welle and other outlets.
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