Jumpstart offers insurance coverage for natural disasters.
It’s the first company offering what’s known as “parametric insurance.” This consists of a lump sum paid to each customer immediately after an insurable event.
Rather than spending time filling out paperwork and waiting weeks for financial assistance, victims of natural disasters can receive payment immediately.
The company is led by Founder Kate Stillwell, who has 20 years expertise studying the science and risk of natural disasters, particularly earthquakes.
She was a fellow at the Earthquake Engineering Research Institute, and the former President of the Structural Engineers Association of Northern California.
More than 40 million Americans live in an earthquake zone. Another 50 million are exposed to natural disasters like floods. Worldwide, the opportunity for insuring those living in these high-risk areas is $180 billion.
California alone represents a $6 billion opportunity. This is Jumpstart’s initial target market. Earthquakes aren’t typically covered under traditional insurance policies. In fact, 9 out of 10 people lack this coverage.
Furthermore, a majority of Americans don’t have enough to cover a $500 surprise expense. Even 40% of those with high annual incomes — more than $100,000 — have less than $1,000 in savings.
When a natural disaster strikes, the majority of people aren’t ready for the financial destruction that occurs. Jumpstart offers a solution to this problem.
The company provides a financial cushion, i.e., a “jumpstart,” after the shock of a natural disaster. Here’s how it works:
Users sign up for a Jumpstart policy through its website or mobile platform, and pay a monthly premium of around $20.
In the event of an earthquake, the company uses data from the U.S. Geological Survey to determine which customers fall under what’s called the “red zone.” Those customers are automatically contacted by Jumpstart and told they’re eligible for an insurance payout.
Once the customer verifies their eligibility, they receive a payment directly into their bank account.
Payments are made by Lloyd’s of London, an insurance company. Jumpstart retains 20% to 30% of customers’ monthly premiums as commission, and remits the remainder of the funds to Lloyd’s. This company bears 100% of responsibility to make post-disaster payouts to customers.
Jumpstart has raised more than $1 million from investors, including InsureTech Gateway, an incubator for early-stage companies, and Berkeley Angel Network.
The company began selling its product direct to consumers in October 2018. And 60% of its sales growth comes from word-of-mouth referrals. The company has top customer reviews on Yelp and Clearsurance. For example:
Molly, a renter in Napa, California, said of Jumpstart, “It’s a no-brainer.” And Kathy, a homeowner in Brentwood, California, said “There is no catch.”
While the majority of its initial customers are individuals, Jumpstart will start focusing on business-to-business channels. Potential customer pipelines include employers (who could offer the service to employees), real estate companies, insurance companies, and financial services companies.
Jumpstart’s future plans also include expanding into countries like Chile and Japan.