Although excitement over insurance technology has been rising, simple low-cost mitigation measures can be just as valuable in preventing damage to homes when disasters strike.
The value of these low-cost mitigation measures is evident in the resilience of homes built by Habitat for Humanity. During Hurricane Andrew in 1992, there was a community of Habitat houses that survived the massive destruction, and more recently Habitat houses in Panama City, Fla., were found still standing while all those around had been destroyed by Hurricane Michael's strong winds and heavy downpours, said Leslie Chapman-Henderson, the CEO and president of the Federal Alliance for Safe Homes, or FLASH.
"We were becoming concerned that the message was that you had to spend a lot of money to be resilient, and we wanted the message to come through that no, you really don't have to," she said.
Some of the differences between houses that survived and those that did not were the careful placement of metal connectors, straps and bolts, the nailing pattern of the roof deck and the protection of openings such as doors and windows, said Chapman-Henderson, who spent more than a decade working with Allstate before lending her expertise to FLASH, a nonprofit focused on increasing property resilience.
Rob Galbraith, director of underwriting research at United Services Automobile Association, said that although making homes more resilient does cost some amount of money, the return is "pretty incredible." He noted a recent study by the National Institute of Building Sciences that found that for every dollar spent on mitigation, six are saved in future disaster costs.
"We know that they work," Galbraith said, "whereas with insurtech, it's the promise of what could be."
Tim Kennedy, business owner of commercial lines and internet of things at insurance software provider Guidewire, said that although there has been some adoption of smart technology in the insurance space, it has been "much slower" in the home than on the road, where usage-based policies are well-established.
"There are so many different opportunities out there for using these IoT technologies, it's kind of breathtaking," Kennedy said. "It's in the early stages, and the adoption is very slow to date."
FLASH's Chapman-Henderson noted that there are many positive insurtech developments for housing already, such as water sensing devices that can shut off water automatically in the event of a leak. She is also looking forward to the development of sensors that can scan the overall structure or skeletal system of a home. Scientists are already using this type of technology to monitor bridge health, she noted.
"That's the kind of stuff that we get very excited about," Chapman-Henderson said. "But I do think for all that excitement there is a tendency to skip over the basic fundamentals of good building, and that is a problem."
One fundamental that she advocates is having a building code as a minimum basic. A study by third-party researchers produced an "overwhelming statistically validated finding" that consumers are not worried about their building codes because they assume "very strongly" that they have one, even though many do not, Chapman-Henderson said.
Chapman-Henderson also emphasized the importance of big data, which she said "changes everything" for insurance and resilience.
Data has helped her team pilot a rating scale for homes in Florida, which gives a score from 1 to 100 based on the house's resilience to disaster. She likened the idea to a "CarFax" for homes, something that is necessary to make informed decisions about a big purchase.
"Basically I'm asking for reform, starting with consumer transparency to revolutionize how we build homes in America," Chapman-Henderson said. "We're just caught in this endless cycle of building homes, watching them get destroyed and building them the same way."