Introducing Jumpstart: A New Hassle-Free Approach to Natural Disaster Recovery
Bill Sinn | October 02, 2018
Using its technology, Jumpstart is the first parametric InsurTech company in the U.S. for earthquakes and aims to provide a broad base of customers with affordable, hassle-free coverage to help families and individuals bounce back after an earthquake of a pre-specified intensity, with fast payment initiated by text message.
Even though the US Geological Survey reports a 99% chance of a magnitude 6.7+ earthquake somewhere in California within the next 30 years, only about 11 percent of California households in 2016 purchased earthquake insurance, which is not required by residential mortgage lenders. As a result, only a fraction of needed rebuild funds are likely to flow into post-quake California.
Jumpstart intends to upend this status quo by appealing to significantly more people than those who currently buy earthquake coverage. To do so, Jumpstart has created an unorthodox product that keeps what people love about insurance – receiving money when it’s needed – while eliminating what people hate – high costs and complicated claims processes.
Here’s how Jumpstart works:
- Earthquake Insurance: Customers can sign-up online through Jumpstart’s website. At the time of launch, insurance policies will be underwritten and administered by AmWINS Group, Inc. and the insurer will be 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.
- Fast, Simple Payments: After an earthquake of a pre-specified intensity as measured by the United States Geological Survey, Jumpstart will automatically reach out to each customer in the impacted region via text message. Once a customer responds to confirm some loss or damage, the pre-defined payment amount will be automatically authorized for direct deposit into the customer’s bank account, eliminating a complicated claims process.
- No Hassle: The insurance payments can be used for anything that will help customers bounce back quickly. In a disruptive earthquake, everyone experiences unanticipated expenses, regardless of the presence or extent of physical damage. Payments will provide a financial jumpstart to begin the process of recovery.
- Financial Inclusion: Considering that 62% of Americans have less than $1,000 of savings, millions of Californians may not have the means to begin rebuilding their lives after a disruptive earthquake. At a price of approximately one-tenth that of conventional earthquake insurance, but for a very different product, Jumpstart dramatically increases access to a financial cushion.
“As a structural engineer, disaster resilience is my life’s work, but after Hurricane Katrina, I realized that resilience means more than safe buildings,” said Kate Stillwell, founder and CEO of Jumpstart. “When a big quake strikes my hometown of Oakland, millions of families will be devastated financially – even more so than physically. Our immediate needs might be things we can’t anticipate – childcare expenses, or a place to stay for a month. Surprise costs can throw a wrench in not only your daily routine, but also your long-term financial sustainability. Just-enough money, at just the right time, allows each of us to stay in our communities and be part of the solution.”
Policies like Jumpstart’s are known as “parametric,” since payments are linked to the occurrence of a pre-specified event or data measurement, i.e. “parameter.”
Says Will Thorne, Innovation Leader at the Channel Syndicate, “Jumpstart’s proposition offers something new to consumers who will likely need financial help after a potentially life-changing earthquake event. We are delighted to be working with Jumpstart and AmWINS to facilitate the delivery of Jumpstart’s innovative product in California.”
“The current protection gap – the amount of economic loss that isn’t insured – impacts the entire market and plagues the global economy,” said Trevor Maynard, Head of Innovation at Lloyd’s. “Jumpstart’s parametric model could play a significant role to help close this gap and build resilience of local communities.”
Although Jumpstart’s first offering will be for earthquakes in California, it has plans to roll out the product in other states and to expand to other types of natural disasters.
For more information and to sign up, visit www.jumpstartrecovery.com.
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