Picking up the pieces after a natural disaster can be overwhelming. Fortunately, there is a tool available for Californians dealing with the aftermath of a natural disaster. Recently launched at InsureTech Connect, Jumpstart announced the release of a type of natural disaster insurance in California for earthquakes.
The Cheat Sheet spoke with Kate Stillwell, the CEO of Jumpstart, to learn more about this technology.
The Cheat Sheet: How did you get the idea for Jumpstart?
Kate Stillwell: The idea was born way back in 2005 after Hurricane Katrina and reinforced again and again in each natural disaster since then. I’m a structural engineer by trade, with a specialty in designing buildings to resist earthquakes, so it’s my life’s work to build safety and resilience. But Katrina was a professional crisis: What good are safe buildings if other pillars of resilience are missing? And one of those pillars is getting people the right amount of money, at the right time, to adapt to the new normal.
If the Big One were to strike today, the amount of money flowing into the economy would be a tiny fraction of what’s needed, because a small minority have a financial buffer such as emergency savings or insurance. (Earthquake insurance is not mandatory in California and very few people buy the conventional insurance that’s available). So the need – the opportunity – is gaping.
Jumpstart is not meant to “make you whole,” it’s meant as a financial jumpstart after a life-changing shock. It’s enough of a cushion to tip the balance so they can stay, tough it out, be part of the rebuild, so at a macro level, we create an upward spiral of resilience and recovery.
CS: How does Jumpstart work?
KS: Jumpstart is powered by data. It’s an entirely new product category known technically as “parametric.” Customers receive payouts based on the occurrence of an event, not human arbitration. Event occurrence is as measured by a completely transparent dataset, so it takes away the big-guy-little-guy dynamic that people hate about conventional insurance.
CS: Who is the independent data source?
KS: In the case of Jumpstart, the independent data source is the United States Geological Survey (USGS). Jumpstart pays a pre-established amount of money after an earthquake of a pre-specified shaking intensity as reported by the USGS. Jumpstart will automatically reach out to each customer in the impacted region via text message. Once a customer responds to confirm they’ve been affected, the payment is automatically authorized for direct deposit, and they use it for whatever they need to bounce back.
At the time of launch, insurance policies are underwritten and administered by AmWINS Group, Inc. and the insurer is The Channel Syndicate 2015 at Lloyd’s (of London)—a non-U.S. surplus lines insurer qualified to accept insurance placements from California surplus line brokers for California insureds.
CS: Is Jumpstart only for earthquakes or all natural disasters?
KS: Right now, Jumpstart is only for earthquakes, but we have plans to roll out the product in other states and to expand to other types of natural disasters.
CS: What advice would you give to individuals who are scrambling to recover financially after a natural disaster? How can they bounce back quickly?
KS: The secret to bouncing back is to know what resources you have available, to tap them all, and share them all. When people find out I’m a structural engineer they all ask me what they should do to prepare for an earthquake. My number one piece of advice is not retrofit your house or buy insurance but know your neighbors! There’s going to be all sorts of unexpected consequences and we’ll all need to rely on each other – you might have a big stash of water, but your neighbor might have plenty of solar chargers. You might have shovels but a bad back, your neighbor might have kids that need to be watched while they use your shovels.
Knowing what resources are available also applies to financial resources. Know what you have and how to access it. Create options for yourself to tap into money at the moment it’s most needed. It’s not going to be mass destruction like in the movies, but there will be unexpected consequences and flexible resource —including a resourceful state of mind! This will go a long way toward adapting.
CS: Anything to add?
KS: At the end of the day, Jumpstart is fundamentally about resilience, ensuring more money comes into the system after natural disasters, creating an upward spiral of recovery. Jumpstart is an InsureTech startup that’s creating value for both individuals and the community. We’re democratizing natural disaster insurance by protecting more people at an accessible price point.
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