Goal is to develop new method utilizing satellite data for assessment of damage in paddy field which can contribute toward substantial reduction of the damage assessment time and costs in framework of agricultural insurance in Indonesia. For the damage assessment, estimation of yield in each paddy plot is a key, so the research on the estimation of rice yield was carried out using satellite data which was acquired in harvesting season. Multiple linear regression analysis was conducted for the estimation of yield using 7 predictors, which are digital values of visible and infrared bands, NDVI, GNDVI and NDWI.

As the result, the estimation equation was created at a level of 1 % significance using predictors of near infrared and NDWI derived from satellite data in 2014, and the 10-fold cross-validation result was 0.7t/ha. Finally, the paddy plots where the indemnity shall be paid were identified by calculating the reduction ratio using the estimated rice yield and the average yield of the past 10 years. The results out of this research suggest that satellite data can be effectively used for estimation of yield and also assessment of damage at lower costs to calculate indemnity in agricultural insurance.