This paper uses state space models and the Kalman filter to merge weather radar and rain gauge measurements in order to improve area rainfall estimates. Particular attention is given to the estimation of state space model parameters because precipitation data clearly deviates from the normal distribution, and the commonly used maximum likelihood method is difficult to apply and does not perform well. This work is based on 17 storms occurring between September 1998 and November 2000 in an area including part of the Alenquer river hydrographical basin. Based on these data, the work aims to investigate the importance of the parameters estimation method to the accuracy of mean area precipitation estimates. It was possible to conclude that the distribution-free estimation methods produce, in general, better mean area rainfall estimates than the maximum likelihood. Copyright © 2010 John Wiley & Sons, Ltd.