Natural disasters leave a trail of destruction — not only physical damage but also emotional and financial hardship for those affected. For many homeowners, recovery starts with filing insurance claims to secure the funds necessary to rebuild their lives. When disasters strike — hurricanes, floods, wildfires — homeowners urgently need quick access to funds for essential expenses. Unfortunately, traditional claims processes often introduce delays and frustration, compounding the challenges during critical times. Digital solutions are reshaping this landscape, delivering faster, more efficient payouts and enhancing the overall disaster recovery experience.
The National Oceanic and Atmospheric Administration (NOAA) reports that the United States faced 27 billion-dollar weather and climate disasters in 2024, with projections indicating a nearly 20% rise by the close of 2025.1 Global insured losses from natural catastrophes reached $137 billion in 2024, marking the fifth consecutive year with losses exceeding $100 billion. Key contributors to this staggering figure included Hurricanes Helene and Milton, severe convective storms (SCS) in the U.S., widespread urban flooding worldwide, and record-breaking insured losses from natural catastrophes in Canada.2
Looking ahead, natural catastrophe-related insured losses are projected to climb to $145 billion in 2025, significantly surpassing the 10-year average, according to a report by Swiss Re. Factors such as population growth, urban sprawl, and climate change are intensifying risks, with severe thunderstorms, floods, and wildfires driving this year’s loss estimates. Notably, approximately $40 billion of these losses are attributed to the Los Angeles wildfires alone, reflecting a long-term annual growth trend of 5% to 7%.3
As natural disasters grow more frequent, the United States shoulders the majority of insured losses. In 2024, nearly 80% of global insured losses were concentrated in the U.S., with states such as Florida, Texas, California, Louisiana, and Colorado hit the hardest.4 While the immediate impact of catastrophic events is often localized, their ripple effects can disrupt the broader business landscape. The resulting surge in claim volume, combined with increased complexity and severity, places significant pressure on claims organizations.
In the aftermath of a natural disaster, the need for swift financial assistance becomes paramount. However, traditional claims processes are often plagued by inefficiencies that place unnecessary stress on policyholders during already difficult times. A significant hurdle in these traditional systems is the reliance on manual methods, such as paper checks and lengthy approval procedures. These outdated practices often force claimants to spend hours navigating automated call systems, waiting on hold, and submitting extensive documentation.
In the aftermath of a natural disaster, these delays are further exacerbated by the potential unavailability of essential infrastructure, such as mail delivery or basic utilities, which severely hinders the claims process. The ability to process claims via mobile platforms has become indispensable, simplifying and expediting payouts for insurers. Mobile technology and instant payment systems are critical during crises, equipping insurers with the tools needed to deliver immediate funds to policyholders.
The complexity of monitored property claims introduces yet another layer of delays. When mortgage lenders must approve claim payouts, the process can drag on for weeks, leaving homeowners without the resources necessary to address urgent repairs, such as fixing a damaged roof or mitigating flood damage. These delays not only worsen the situation by increasing the risk of further damage but also add financial and emotional strain on policyholders.
Digital innovation is revolutionizing disaster recovery by streamlining and accelerating insurance claim payouts. Digital claim payments not only enable adjusters to close claims more efficiently but also help reduce claim severity, mitigate risks, and lower loss adjustment expenses (LAE).
A significant portion of claim payments is routinely directed to vendors, such as auto repair shops and contractors. For many multi-line carriers, these payments are further divided among various categories, including single-party, multi-party, subrogation, auto lienholders, property mortgagees, and other vendor types.
Digitalizing workflows for these diverse claim payment types is essential for ensuring faster payouts, particularly in cases involving auto total loss and property damage mortgagee claims. By leveraging digital decisioning and payment systems, insurers can dramatically reduce cycle times — often by weeks or even months. This, in turn, significantly lowers associated costs, such as car rental, lodging, and other expenses, while improving the overall claims experience for policyholders.
The most crucial benefit from digital claim payments is the immediate access to funds for repairs and other critical needs after a disaster. This allows homeowners to start rebuilding their lives and properties without enduring long waiting periods, which can potentially worsen damages like mold or roof leaks.
Digital payouts can reach policyholders even if traditional communication methods like mail service are disrupted due to the disaster. This ensures that individuals in affected areas receive the financial support they need regardless of logistical challenges.
Seamless integrations with existing technology ecosystems can connect insurance adjusters, lienholders, and contractors in a unified platform, streamlining the entire claims process and resulting in faster digital payouts. Such approaches ensure that all parties involved can approve and access funds quickly, eliminating the delays traditionally associated with monitored claims.
The speed and convenience of digital claim payouts significantly improve the customer experience, fulfilling the promise of insurance and leading to higher satisfaction and loyalty. Policyholders appreciate the ability to receive funds promptly, especially during a crisis.
Digitalizing the payout process streamlines workflows, reduces manual errors, and shortens the overall claims cycle time. This improved operational efficiency not only benefits policyholders but also helps insurers manage the surge in claims that often accompanies natural disasters.
Significant cost savings can be achieved by reducing paper checks. Traditional paper check processing is expensive, costing between $6 to $8 per check, according to a 2022 Bank of America business-to-consumer (B2C) payments report.5
Paper checks are particularly vulnerable to fraud and demand additional resources to oversee escheatment. According to the AFP 2025 Payments and Fraud Report, checks remain the most frequently targeted payment method for fraud, with 63% of respondents reporting attempted or actual check fraud in 2024. Mail interference also continues to be a major issue, with 23% of organizations attributing check fraud to mailbox-related theft.6
Digital payment capabilities help insurers meet regulatory requirements, such as California’s mandate to fast-track advanced payments to claimants to speed recovery after the January 2025 wildfires. The California Insurance Commission also ordered insurers to advance 30% of a policy’s dwelling limit (up to $250,000) for personal property and an advance payment of at least four months of living expenses, without requiring an itemized claim.7
As the property and casualty (P&C) insurance industry navigates the complexities of escalating risks associated with climate change, it is imperative for insurers to adopt technology that bolsters resilience and streamlines operations. Digital claim payments mark a pivotal advancement, strengthening the industry's capacity to respond to and recover from climate-related events.
NOAA statistics underscore the urgency of addressing flooding, wildfires, and severe storms, while the benefits of digital claim payments provide a clear pathway to improved efficiency, security, and customer satisfaction. Looking forward, the integration of these technologies will be essential in adapting to an unpredictable environment and safeguarding the industry's future.
Are you ready to modernize your payment offerings to deliver more to your customers? One Inc provides a cloud-based, scalable payment platform that enables innovation and growth. Our extensive vendor network offers carriers immediate access to a vast ecosystem of service providers ready for digital payments. By leveraging our next-gen technology and ecosystem partnerships, we deliver a simplified, seamless, and elegant customer payment experience. One Inc’s integration with Hi Marley’s two-way texting application delivers combined functionality that allows adjusters to support the claim process from claim intake to claim payment, entirely through text messaging. With One Inc by your side, continually adding value, cloud-based digital payment success is achievable. Learn more.