A Category 4+ hurricane makes US landfall before Nov 30, 2026
A Category 4 or stronger landfall can take coastal terminals and distribution out of service for weeks. Named-storm deductibles, mobilization, lost throughput, and other retained losses stay with you. A fixed payout on the landfall classification funds that retained layer while the adjuster works the claim.
- Reference event
- Cat 4+ CONUS landfall
- Threshold
- Cat 4 · 130 mph sustained
- Observation
- Execution → Nov 30, 2026
Term sheet
Terms for discussion. Not an offer, solicitation, or recommendation to enter into any transaction. Size, availability, and pricing are agreed bilaterally with eligible contract participants.
- Structure
- Binary event contract, negotiated bilaterally.
- Trigger event
- A hurricane makes landfall in the contiguous United States at Category 4 or higher on the Saffir-Simpson Hurricane Wind Scale. Landfall means the center of the storm’s circulation crossing the coastline, as determined by the National Hurricane Center.
- Reference region
- The lower 48 states. Landfalls in Hawaii, Alaska, and US territories do not qualify unless the contract specifies otherwise.
- Observation period
- Execution date through November 30, 2026, 11:59 p.m. ET.
- Reference source
- National Hurricane Center (NOAA) published classifications.
- Determination
- Storm intensity as classified by the National Hurricane Center at landfall. Category 5 landfalls also qualify. Where classifications are revised after publication, the documentation names the governing publication and fixes the treatment of later revisions at execution.
- Payout
- Fixed amount agreed at execution, paid upon the first qualifying landfall. If no qualifying landfall occurs within the observation period, the contract expires at zero.
- Premium
- Paid at execution.
- Settlement
- Cash settlement within five business days of final determination.
- Size and tenor
- Negotiated bilaterally. Regional variants (Gulf Coast only, Florida only) and alternative category thresholds are available and priced accordingly.
- Documentation
- Bilateral contract specifying the trigger, reference region, data sources, determination process, and settlement timeline in full, including the fallback where the reference source is discontinued or restated.
The economic exposure
Insurers write named-storm deductibles as a percentage of insured value, so a single landfall can retain an eight-figure layer before the property program responds. You also spend on costs the program excludes: crew mobilization and pre-landfall shutdown, paid whether or not the storm arrives; demurrage on cargo that cannot move; penalty and expediting clauses on missed deliveries; and the labor and materials inflation that follows a major event into the rebuild.
Property insurance pays against adjusted loss, and only after the applicable retention. Gulf crack spreads, utility names and building products move on landfall, and they also move on unrelated drivers, so the hedge ratio is an estimate you re-derive each season, and one that can fail in the year you need it. A contract settling on the National Hurricane Center classification replaces that correlation with a stated amount. You swap one basis for another: a fixed sum in place of a measure of what the storm cost you.
Why this structure
The National Hurricane Center publishes a classification, the contract settles on it, and cash arrives in the weeks when you are funding restoration out of working capital, ahead of the claim close. Cost is fixed at execution, so you budget the season as a line item instead of carrying an open-ended retention.
What it does not do. A qualifying storm can come ashore several hundred miles from your assets and pay in full. A Category 3 can sit over them and pay nothing. Narrowing the reference region tightens the mismatch at a higher premium.
Other exposure areas
Discrete structures similar exposures the same way.
Contact Discrete for institutional inquiries.