Jumpstart Earthquake Insurance - Checking Out The Simulator and talking about Parametric Insurance

Published Date: 05/20/2024

Shaking Up the Insurance Industry: How Jumpstart’s Parametric Earthquake Coverage Is Changing the Game

When we think of earthquake insurance, most of us picture complicated claims, long waits, and uncertain payouts. But what if disaster recovery could be instant, transparent, and based on objective data — no adjusters, no paperwork, no gray areas?

That’s the revolutionary idea behind Jumpstart, a California-based insurtech founded by Kate Stillwell, a structural engineer turned entrepreneur. In a recent Insurance Hour episode, host Karl Susman sat down with Stillwell to discuss how her company is using parametric insurance to transform disaster recovery — and even built an earthquake simulator to show people what it feels like when the ground really starts to move.

What began as an engineer’s curiosity has grown into one of the most innovative insurance products on the West Coast — one that could redefine how we respond to natural disasters in an era of climate change and rising catastrophe losses.

From Engineering to Insurance Innovation

Stillwell’s journey to founding Jumpstart began in an unexpected place — the world of structural engineering.

“I worked with architects to design the skeletons of buildings and make sure they were safe in earthquakes,” she explained. “But I realized safe buildings were only one piece of the puzzle. For true recovery, we also need money flowing quickly back into the system.”

That insight led Stillwell to explore how financial systems — not just physical structures — determine the speed of disaster recovery. Her research led her to a concept used primarily in developing countries at the time: parametric insurance.

“When I discovered it,” she said, “I thought, this is what we need. Why don’t we have parametric insurance for individuals, especially for earthquakes?”

If farmers in Africa could receive automatic payments after droughts, Stillwell reasoned, Californians could do the same after earthquakes. And with that, Jumpstart was born.

What Is Parametric Insurance?

In traditional insurance, you file a claim after a loss, an adjuster assesses the damage, and eventually you receive a payment — if the loss qualifies.

Parametric insurance flips that process on its head.

At its core, parametric insurance pays out automatically when a predefined parameter — such as earthquake magnitude or wind speed — crosses a certain threshold.

As Stillwell put it:

“It’s an automatic lump-sum payment triggered by a data point. There are no claims adjusters, no arbitration — it either is or it isn’t.”

In Jumpstart’s case, the trigger is seismic data provided by the U.S. Geological Survey (USGS). If ground shaking exceeds a specific level near your location — 30 centimeters per second of ground velocity — the payout is activated.

It’s binary: if the event happens, you get paid. No inspections, no photos, no forms.

How It Works

Jumpstart’s policies are simple by design.

• You choose the amount of coverage you want — say, $10,000, $20,000, or $50,000.
• If an earthquake meets the trigger criteria (based on USGS data), you automatically receive your payment via electronic transfer, often within the same day.

That speed is possible thanks to Jumpstart’s partnership with Snap Refund, a payment processor capable of delivering large lump-sum payouts almost instantly.

As Susman noted during the conversation, same-day insurance payments are practically unheard of in the industry. “That’s amazing,” he said. “To get a check the same day or even the next day — that’s a game-changer.”

Stillwell agreed:

“It’s part of the beauty and simplicity of the model. Less overhead means fewer costs and faster recovery for customers.”

Why “Parametric” Is So Powerful

The innovation of Jumpstart isn’t just speed — it’s clarity and fairness.

Because the trigger is based entirely on third-party, publicly available data, there’s no subjectivity involved. You either experienced the qualifying earthquake intensity or you didn’t.

That transparency helps build trust in a world where policyholders often feel frustrated by complicated exclusions or disputed claims.

Moreover, parametric insurance helps fill what experts call the “protection gap” — the enormous difference between total economic losses from disasters and the portion that is actually insured.

Traditional earthquake insurance penetration rates in California are notoriously low — fewer than 1 in 10 homeowners have it. Jumpstart’s streamlined, affordable model helps close that gap by offering a product that’s easy to understand, quick to pay, and flexible in use.

“No Damage? No Problem.”

One of Jumpstart’s most groundbreaking features is that you don’t need property damage to receive payment.

“Even if your house isn’t physically broken,” Stillwell explained, “a major earthquake will still cause disruption — lost wages, school closures, power outages, extra expenses. The payout is there to help you recover economically, not just fix things.”

That makes Jumpstart less about rebuilding walls and more about restoring stability — whether that means covering hotel bills, replacing lost income, or simply taking care of your family while things get sorted out.

The Jumpstart Shaker: Experiencing the Earthquake

During the interview, Susman and Stillwell sat in front of an unusual piece of equipment — a custom-built earthquake simulator known affectionately as the Jumpstart Shaker.

Created under the direction of Jumpstart’s former chief marketing officer, Juan Jaramillo, the simulator uses the same hydraulic technology found in lowrider cars to replicate the violent motion of a magnitude-7 earthquake.

“We wanted people to experience what it’s like — not just to feel the shaking, but to understand how our system would respond,” Stillwell said.

When participants go through the simulation, they receive a mock text message moments later:

“You just experienced a major earthquake. You’re eligible for your $10,000 Jumpstart payment.”

The idea is to make the process tangible — showing consumers how fast and simple post-disaster support could be.

Susman and Stillwell climbed into the trailer together for a demonstration. As the shaking started, Susman described it vividly:

“We’re laughing now, but this is jarring. You can only imagine what this would feel like if it were real — if you were at home with things flying around.”

Where Jumpstart Is Available

As of now, Jumpstart operates in California, Oregon, and Washington, with plans to expand soon into Nevada, Idaho, and Utah — states that share similar seismic risks.

Interestingly, Stillwell noted that demand doesn’t always align with geography. “You’d expect the most interest in high-risk states like California,” she said. “But sometimes, after media coverage or public education campaigns, we see spikes in awareness even in places like the Pacific Northwest.”

For example, a 2015 New Yorker article about the Cascadia Subduction Zone — a massive fault off the West Coast — dramatically raised public awareness of earthquake danger in Washington and Oregon. “That single article had a huge impact on how people think about earthquakes up there,” Stillwell recalled.

The Future: Parametric Insurance for Everything

While Jumpstart started with earthquakes, Stillwell believes the model can — and will — expand far beyond that.

“Parametric insurance fills a totally different mental bucket,” she explained. “It’s not about traditional claims or damage assessment — it’s about data-driven fairness. Anything that can be measured can be insured this way.”

That means future parametric products could cover floods, hurricanes, extreme heat, or even cyber events, provided there’s a measurable trigger.

It’s a vision shared by Neptune Flood, which acquired Jumpstart in 2021 to expand its reach and invest in the parametric frontier. Neptune CEO Trevor Burgess has publicly expressed confidence in this model, especially for closing coverage gaps in climate-related disasters.

Why This Matters

Parametric insurance doesn’t replace traditional coverage — it complements it.

Think of it as financial first aid: a quick infusion of funds when you need them most, without waiting for months-long claims processes. It provides liquidity when disaster strikes, helping people recover faster while traditional insurance handles larger structural losses.

As natural disasters become more frequent and costly, innovative solutions like Jumpstart represent a crucial step toward financial resilience.

Earthquake Safety: What You Can Do

Stillwell ended the segment with a timely reminder that preparedness starts with people, not policies.

When the shaking begins, she emphasized, remember the official advice:

“Drop, cover, and hold on.”

Get low, protect your head, and stay put until the shaking stops. Then, once it’s safe, check for hazards, connect with loved ones — and if you’re a Jumpstart policyholder, expect your text message.

A New Era of Insurance

As the Insurance Hour episode wrapped up, one thing was clear: Jumpstart is more than a company — it’s a movement.

By blending engineering, technology, and empathy, Stillwell and her team have shown that insurance doesn’t have to be slow, complicated, or reactive. It can be simple, objective, and empowering.

In a state where earthquakes are inevitable but recovery doesn’t have to be painful, Jumpstart offers a glimpse into what the future of insurance could look like — a world where data drives trust, and payouts happen at the speed of disaster.