Area or weather index based insurance provides indemnities that are not calculated through an estimation of individual loses; they use the estimated average production loss in the location of the farm, or an index of local rainfall or temperature. Index insurance has the advantage of reducing information asymmetries because indemnities are triggered by indexes that are out of the control of the farmer and this can reduce the administration costs. Despite its simplicity and great potential there are only few cases of widespread programmes, in particular the area-yield index National Agricultural Insurance Scheme (NAIS) in India.