The New World Of No-Contact Disaster Claims

Mother Nature throws a lot of natural disasters our way—earthquakes, floods, hurricanes, tornadoes, wildfires. There are some steps we can take to reduce damage, like keeping our roofs in good shape. And in most years, preventative steps can give you some semblance of peace of mind.

But 2020 has been unlike any other year, for obvious reasons. The COVID-19 pandemic has drastically altered the way we live our daily lives—and what happens after a natural disaster hits. Social distancing makes insurance claims particularly tricky.

Insurance companies have had to adjust on the fly to not only keep their customers and employees safe, but also to expedite claims. Through an impressive mix of technology and data, some insurers are well-positioned to meet this significant challenge.

Your Insurance Adjuster Is in the Sky

When the pandemic hit, many home insurance companies turned to a technology they had been using for years: drones.

Drones allow adjusters survey damage and to get a bird’s eye look at steep and complicated roofs without having to climb them.

“We’ve made more than 70,000 flights with our drones fleet over the past few years,” says Patrick Gee, Senior Vice President of Claims at Travelers. He says that in the past, a contractor with special types of rigging might need to get up on a customer’s roof, slowing down the claims process. But drones can oftentimes evaluate all of the damage in one visit.

When drones won’t do the trick, insurers might use low-flying planes and satellite images. This especially comes in handy in the immediate aftermath of a natural disaster if the area is restricted for visitors.

At Allstate, “We look for the fastest way to get the imagery that we need to start the customer with their road to recovery,” says Chip Teague, head of the national catastrophe team. If the air space is restricted, Allstate will use satellite imagery to help assess the damage and start the claims process.

Artificial Intelligence Shapes Claims

In addition to imagery from drones, planes and satellites, some insurers turn to artificial intelligence (AI) to help them better assess disaster damage. For example, Travelers downloads all the weather radar data in the United States four to five times a day, according to Gee. If there’s a hail storm happening, they can convert the radar imagery into a “hail footprint,” overlaid with all of their policyholders’ homes in a particular area, which helps them understand how many claims might be coming.

But the process doesn’t stop there, depending on the severity and type of disaster. Gee estimates Travelers has aerial imagery of about 90% of the properties in the United States, which helps get them started on a claim. When the skies are clear, low-flying planes can get additional pictures from various points of view. The photos are then run through AI models so they can get a better idea of the degree of damage.

In some cases, the use of AI allows Travelers to start the claims process before an adjuster can get there in-person. For example, if a home is destroyed by a wildfire, Travelers can compare before and after photos and use AI to calculate the dimensions of the home and determine what it will cost to rebuild it. Gee says this allows Travelers to send payments almost immediately, given their ability to validate the damage.

Your Smartphone Can Be a Virtual Claims Center

Not all natural disaster claims can be evaluated on aerial imagery alone. In some cases, an insurance company is going to need a closer look. For example, if a tree falls on your roof and creates a leak, you’re going to need visual evidence of the damage to the interior.

But with COVID-19, some customers may not want anyone outside their family entering the home.

That’s where products like Allstate’s Virtual Assist and Direct Connect come in. For example, Direct Connect allows customers to connect with a claims adjuster by phone and stream video for the adjuster to see. “We’ll walk the customer through all the damages and, consequently, all the benefits of their policy,” says Teague.

Farmers Insurance has taken a similar technology-first approach during COVID-19, with video chats and automated tools to get measurements.

“A lot of claims can be handled virtually and accurately with an ease of use from a customer standpoint,” says Patrick Owens, national catastrophe response manager for Farmers Insurance. “That allows us to not have any in-person interaction whatsoever.”

Some insurance companies have also adopted electronic online payments through apps like Venmo and Zelle. This allows insurers to send claims payments to customers, who can get the funds almost immediately. The money can be used by displaced customers to pay for hotel costs and clothing, says Teague.

Claims Centers Go Mobile

In some natural disasters, aerial imagery and smartphones won’t be able to tell the whole story. You may need an adjuster to come to your property or, if you are displaced, you may want to visit a mobile claims center to get help processing your claim. To help facilitate these face-to-face interactions, insurance companies have instituted safety procedures to reduce the spread of COVID-19. This includes face masks, plastic shields and tables that are spaced apart.

For example, the Allstate Mobile Claims Center is deployed to areas affected by a natural disaster. They run on generators and satellites, which can be useful for areas with widespread power outages or cell phone towers that are knocked out. After giving some initial information, you can wait in your car in a “virtual queue” until you get a text that your appointment is next.

Customers Prefer Virtual Claims Now

While so much uncertainty has surrounded 2020 due to COVID-19, insurance companies report that customers have quickly adopted virtual claims handling. For example, USAA says that claims processing has gone nearly 100% virtual and that roughly 1,500 properties have used virtual tools for claims estimates. The insurer says early signs indicate that virtual claims handling has resulted in increased efficiency and faster settlements.

Travelers also reports that its customers have responded favorably to virtual claims. “We’ve seen adoption increase across all those digital tools and payment mechanisms significantly during COVID,” says Gee. He adds that customer feedback has been positive.

Owens at Farmers says, “Customers have been very understanding, and honestly, we’ve had some customers where they didn’t want us coming to their home.” He adds that while there will sometimes be a need to inspect a customer’s home in-person, opportunities will increase to be able to handle claims virtually. “There is a place for this kind of claim handling going forward, even in a post-pandemic world.”

This new tool pinpoints the communities most in need of disaster relief

Global warming has all but guaranteed that storm seasons will continue to intensify, in traditional hurricane hot spots and further afield, meaning more people are likely to be affected by destroyed homes and communities and in need of financial support. But there is never enough support to go around, so charities are always looking to donate as efficiently as possible. A partnership between GiveDirectly and Google.org aims to smooth the process of delivering funds to the people who require them most urgently.

The charity, the largest in the world that assists via direct cash transfers only, and the tech giant have launched Delphi, an online tool that allows aid organizations to pinpoint the specific locations, down to granular zip-code level, most in need of assistance. The data-driven effort creates scores based on the overlap between two metrics—poverty level and destruction of property—then ranks and shows those neighborhoods visually in Google Maps.

[Image: courtesy of GiveDirectly and Google.org]

It could prove crucial for nonprofits such as GiveDirectly, which has to make hard decisions about where their cash would go the farthest. Landing on a better method became a priority after many organizations, including GiveDirectly, largely ignored the hard-hit community of Port Arthur after 2017’s Hurricane Harvey, in favor of concentrating on Houston. It later emerged that three out of five most impacted people were residents of Port Arthur (three years later many residents are still homeless and awaiting aid).

The organization used the tool retrospectively to assess their distribution efforts for Harvey, which caused approximately $125 billion worth of damage. “In retrospect, if we had had the tool, we would have been able to make sure that these marginalized communities were not missed,” says Alex Nawar, humanitarian director at GiveDirectly.

Before the development of the new product, GiveDirectly principally used on-the-ground techniques to find the most crippled communities. They relied on media coverage, phone calls, on-the-ground searches, and information collected by other organizations. That proved to paint inaccurate pictures, often leaving less visible communities disregarded. “This tool would have really made sure that no one was left behind because they were not part of the narrative, or not part of the word-of-mouth campaigns,” Nawar says.

A team of four Google Fellows developed Delphi (named after the ancient Greek shrine that was home to an oracle who could predict the future) over the span of six months. They used Earth Engine, Google’s geospatial data viewer, explained Julie Xia, one of the fellows, and plugged data into it. They used census block data for locations, SNAP (food stamp) data for poverty levels, and data from the National Oceanic and Atmospheric Administration for property damage (NOAA also produced high-resolution satellite imagery that can be viewed on top of the maps). Users can set thresholds (such as at least 30% of the population on SNAP or at least 50% of the region damaged) and weight the metrics as required.

GiveDirectly would then target those communities with direct cash relief. The charity only sends money transfers, typically on prepaid debit cards, because that allows people to decide for themselves how to spend the money on recovery. Sending clothing, for instance, can clog up supply lines; food donations can go bad; and it’s hard to donate vital items such as building materials. It’s also simply less patronizing. “Traditional aid has some paternalistic bent to it,” says Alex Diaz, head of crisis and humanitarian response at Google.org, “but the notion of direct cash transfer, at its core, acknowledges the dignity and agency within recipients.”

Delphi, which is now live, will not be limited to GiveDirectly. It has the framework to be used not only for hurricanes but also for other disasters, such as wildfires. Nawar adds that it’ll also save aid organizations time, and field costs by about 25%, by cutting back on the laborious fieldwork. Recently, the American Red Cross expressed interest in trialing it, and Diaz hopes—having made it open-source and easy to use—that it’ll ultimately benefit the humanitarian sector as a whole.