After Seattle balked at the cost, One Concern found a company , American Family Insurance, to fund the city’s use of the services. It has paid $250,000 since last year, according to One Concern. In return, American Family gets access to predictions and market insights that Peter Gunder, its chief business development officer, said could influence the “design of our insurance products as well as the pricing .”

Mr. McDonald said Seattle had alerted One Concern to the problems it discovered, including the unanalyzed commercial areas and errors in the seismic assessment of buildings. The building where Mr. McDonald works, for example, was made to withstand strong earthquakes, yet in simulations appeared heavily damaged. The model also often reported surprisingly high numbers of destroyed buildings because, Mr. McDonald realized, it mistakenly counted each apartment in a high-rise as a separate structure.

The company then revised its product twice, adding new sources of building data in Seattle, including satellite imagery, and updating its algorithms . That fixed some issues, but introduced others.

The Costco now appeared in the earthquake simulation, but “the entire University of Washington dropped out,” Mr. McDonald said. More troubling, each update produced vastly different damage predictions when simulating the same earthquake. City workers must now revamp nearly completed plans for sheltering earthquake-displaced residents that were developed using the original version, Mr. McDonald said. ( Company leaders said that product iteration was common in Silicon Valley and helped customers. )

Barb Graff , Seattle’s emergency management director, said that, despite frustrations, the city would use the service — especially because it cost nothing. “It’s hard to look a gift horse in the mouth,” she said, adding that she viewed the partnership as a pilot project.

Some former workers also voiced misgivings, even while saying they saw promise in One Concern’s approach. Tom Logan, who interned at the company last year and recently completed his Ph.D. in engineering at the University of Michigan, is among nine former workers who spoke about their experiences. Dr. Logan said the salesmanship — such as claiming to estimate damage on each block with 85 percent accuracy within 15 minutes of an earthquake — was misleading , and it was dangerous for cities to rely too heavily on it.