Micah Kalisch is the CEO and Founder of Chrp Technologies, helping home insurance companies build great relationships with their insureds through an AI-enabled loss prevention platform. Micah was interviewed by Andrew Daniels, Founder and Managing Director at InsurTech Ohio.
Micah, how does the industry approach home inspections, and why isn't it sufficient?
“This is a two-part question. First, homeowners insurance companies will generally address inspections for homes once they hit what they call their ‘target age’, which is around 30 years old. We have been able to effectively show through data that after five or six years the small components in homes start breaking. You'll see more attritional losses in homes that are between 10 and 20 years than you will after 30. By using traditional inspections, the industry misses a lot of preventable hazards..
The second part is the word ‘inspection’. As soon as a homeowner hears the word ‘inspection’ and someone shows up at their home, they expect the insurance company is looking for something wrong with their home and a reason to drop coverage. This is really where self inspections have improved the interface between the insurance carrier and the insured. Homeowners are now empowered to learn more about their home, conduct their own survey, and feel more comfortable with the photos being taken.”
What point do minor and major repairs start occurring in the life of the home?
“We touched on it a little in the first question, but it’s about the year five mark for most minor maintenance related components and then year 10 is usually when things start to fail. There are multiple factors that contribute such as installation error and degradation of product, but generally within 10 to 15 years, it's a good idea to start replacing things like seals, lines, and valves. Location also plays a large role in how quickly something degrades and the nature with which it degrades. For example, there’s a big difference in the speed steel corrodes in a house on the ocean and one inland, or the rate a roof deteriorates in warm climates verses cold. Everything plays a factor and we have been able to capture all of that data and turn it into usable insights that can be used across the industry to underwrite more effectively."
What are some of the small things that will cause these repairs and drive losses?
“The biggest one we see is common chlorides. Think about every kitchen in the US; and I will bet you there are common household cleaners sitting next to brass, stainless steel and metals that do not get along with chlorides. Bleach alone is the biggest corroder of those components. Bathrooms are another one where everyone likes to go heavy on the bleach as they clean, and that along with a damp environment is very conducive to starting the corrosion process. Others are simple maintenance issues where neglect of a small problem can lead to a massive loss.”
What can carriers do to partner with homeowners and take action on that knowledge?
“There's been a longstanding tradition of people hating insurance companies simply because the only times they ever hear from them are when a policy is bound, when a claim is filed, or when they're trying to drop the policy. There's a fantastic opportunity for carriers to partner with insureds and maintain the health of their home by conducting regular inspections, providing insights and in a lot of cases, providing assistance with connections to contractors.
There are incentives for specific repairs and can be given out, but mostly, showing they actually care about the health of someone's home is a great way to further that relationship while also keeping losses down. This is really a win-win for everyone involved. Obviously, there will always be people who think the process of inspections is meant to be intrusive, but once they realize that it's meant to be helpful and a way to keep their rates down, people are much more receptive.”
What are some of the most interesting inspection photos you have seen?
“We've seen it all. Everything from the most ridiculous home construction ideas to projects that have a deep rooting in the ‘homemade’ category. And there have been some scary ones. I will say that one of the most impressive things is when it comes to self inspections, the level of care that people take. Everyone makes their beds before taking pictures and there's a certain level of pride that we see time and time again. A clean and tidy home is a reflection of the pride that someone has in their home and can very easily be correlated to the general condition of it. A healthy home is generally a claim free home as a carrier this is what you want to see in an inspection."