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The document examines the vulnerability of coastal sectors in SIDS to climate change and the inadequacy of current coping mechanisms. It proposes micro-insurance as a tool to protect low-income populations from specific perils, identifying barriers such as mistrust and cost, while suggesting policy options like state subsidies and public-private partnerships to implement these schemes.

The document investigates how low-income populations in the Caribbean (Belize, Grenada, Jamaica, St. Lucia) and the South West Indian Ocean (Mauritius, Seychelles) cope with extreme weather events. It finds a heavy reliance on 'medium level stressors' like savings and credit, which act as pseudo-insurance, and a concerning prevalence of 'high level stressors' such as 'doing nothing' (asset degradation) in the Caribbean. While there is an implicit need for microinsurance to prevent asset depletion, adoption is hindered by cost, lack of trust, and limited knowledge.