Losing unrecoverable millions of dollars in rainfall damage may be a thing of the past when Jamaica signs on to a new insurance plan.

The Excess Rainfall product, which was to have been agreed on by the Government last month, is in the final stages and may be signed by month's end, said Dr Simon Young of the Caribbean Catastrophe Risk Insurance Facility (CCRIF).

The Government is in the process of deciding what kind of coverage it wants, Young said, as the current package doesn't include damage from rain. The island is covered for earthquake damage and wind and storm surge damage from hurricanes but now it will have "the full suite of natural hazard coverage", Young told the Jamaica Observer.

Such coverage is important as countries like Jamaica and Trinidad and Tobago may have several small rainfall events that incur losses throughout the year and not necessarily a one-off hurricane for which some governments may be prepared.

Also, it is not sustainable to set aside funds for rainfall damage by hurricanes given the economic challenges so it's practical to offer a product that transfers some of that risk from governments, Young said.

Previously, it was difficult to estimate how much loss is caused by rainfall during a hurricane as it was often complicated by storm surges and wind damage, he said. That has changed due to two tropical storms, Nicole in 2010 and Gustav in 2008, which gave CCRIF the opportunity to assess rainfall damage without much interference.

Both storms had significant rainfall but little wind and storm surge activity which allowed analysts to assess rain damage and use that to make "educated guesses" for other such events that came with all three factors. That information is also being used as a starting point for other countries in the region that do not have adequate rainfall data, he said.

Calculating payouts by the Excess Rainfall product will use a simpler model than the hurricane and earthquake ones that look at wind speed, storm surge and the amount of quaking to find out what the country's losses are.

The product will use satellite data to look at the amount of rainfall exposure recorded in 25-kilometre grids and then a national aggregate will be done to see what the country's losses have been.

The product will begin with Jamaica then move to Trinidad and Tobago and Haiti, Young said.

CCRIF assists regional governments by providing insurance coverage for when hurricane and earthquake disasters strike, such as the US$7.8 million ($683 million) paid out to Haiti after its 2010 earthquake.