Environmental Risks and Insurance Strategies for Climate-Resilient Road Infrastructure in India: Policy Gaps, Risk Transfer Mechanisms, and Institutional Pathways

Abstract

India’s road infrastructure, comprising national, state, and rural networks, faces escalating environmental threats from climate-induced hazards such as floods, heatwaves, and landslides. These hazards compromise structural integrity, reduce asset lifespans, and increase maintenance expenditures, posing significant challenges to transport resilience. The purpose of this study is to estimate the nature and magnitude of environmental risks, examine the sufficiency of current insurance mechanisms, and recommend ways to incorporate climate resilience in road infrastructure planning and financing. The study method involved a mixed-methods approach integrating policy analysis, spatial risk assessment, and comparative analysis of insurance products. Historical and future climate data were examined in conjunction with contractual frameworks and case studies to determine vulnerabilities and institutional lacunae. Findings reveal that flooding is the most costly hazard and impacts more than 11,200 km of roads each year, with costs over ₹4,800 crore. Conventional insurance products continue to be narrow in scope, while parametric models offer quicker compensation but are hampered by adoption. Case studies show that climate-resilient designs can decrease maintenance expenses by as much as 40% and greatly extend asset life. The results point towards the necessity of comprehensive risk governance, niche insurance products, and innovative funding tools. Integrating climate risk analysis into planning and regulation procedures, coupled with enhanced institutional coordination and performance-based contracts, will be key to creating a climate-resilient road network infrastructure that can absorb tomorrow's environmental stressors.