As I write this article, Hurricane Dorian is barreling towards the east coast of the United States as a Category 4. The projected track models show varying paths. Originally, models projected landfall would occur in Florida or Georgia. Now, South Carolina and North Carolina appear more likely.

Regardless of where Dorian hits, hurricanes of a comparable magnitude now happen once per year or more on average in the US. A few recent examples include Michael and Florence in 2018 as well as Irma, Harvey, and Maria in 2017. 4 out of the 5 most costly hurricanes in US history have taken place since 2012. This means that getting home insurance coverage, especially along the coasts in Southeast states, can be difficult or impossible.

Dorian projected path models from August 31, 2019. Source: The Weather Channel

Even if it is possible to get coverage, the costs are much higher than regions that aren’t prone to disasters. Kin Insurance is a startup that just raised $47 million to tackle this problem. Here’s what the company is working towards and the positive impact it could have for homeowners in disaster-prone regions.

Data Points To Determine Coverage

Insurance companies have been using risk assessments for centuries. For home insurance, a number of factors go into determining rates and coverage amounts. Similarly, Kin Insurance uses thousands of data points to recommend the best coverage for each individual. In order to check plan options, homeowners can enter a home address and a few other details to get insurance quotes. The company homepage says that it’s possible to insure your home in less than 15 minutes and save up to 20%.

While many different insurtech businesses give potential customers the chance to reduce rates and quickly start a new policy, they have mostly preferred to focus on markets that aren’t as likely to have major claims. This seems to make sense as these appear to be more profitable in the long-term. Kin Insurance is an insurtech startup that is challenging this idea by focusing on places that are especially susceptible to a variety of natural disasters.

The Kin Insurance team

Coverage Availability

Currently, Kin Insurance is available in Texas, Florida, Georgia, and Alabama. The Kin Insurance website lists specific stats for the top natural disaster risks in each of these states. Take my home state of Alabama, for example. Alabama has the most violent tornadoes of any state (EF4, EF5, and F5) in the US. On the list of disasters for the state, this is followed by hurricanes and fires.

Because of tornadoes, home insurance in Alabama is $200 higher than the national average. While tornadoes are more likely to occur in the northern and central parts of the state, home insurance is actually costlier in the southern part of the state where hurricane damage is more likely.

For homeowners in the four states listed on its website, Kin Insurance provides plans for a variety of coverage needs. It’s important for homeowners to note that home insurance plans vary on a state-by-state basis. There is a variety of policy differences to understand; however, Kin Insurance clearly outlines these points to homeowners. For example, on its page for Florida residents, the text says that hurricane coverage only includes wind damage. Floods that occur during hurricanes must be covered with a separate flood insurance policy.

3 biggest disaster risks for Florida homeowners

Kin Insurance Funding and Future Expansion

On August 27, 2019, Kin Insurance announced it had raised $47 million from August Capital, with participation from Hudson Structured Capital Management (HSCM Bermuda), Avanta, and UChicago Startup Investment Program. In total, the company has now raised $64 million.

Soon, it will launch the Kin Interinsurance Network, an insurance carrier in Florida. With the recent funding round, Kin Insurance plans to expand to other states throughout the US in the coming years.

By taking on risks that other insurance companies traditionally haven’t, Kin Insurance is able to expand to markets that are underinsured.