Ensuring Insurance Covers the Proper Property
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Location, location, location. Those are often claimed to be the three most important words in real estate. Since new homeowners need to properly insure their new investment, location, location, location are also the three most important words in property insurance, making it a good case study in address accuracy.
While insurance companies also rely on accurate addresses for correspondence by mail, the most important reason for ensuring the address accuracy of a property’s location is it plays a significant factor in properly assessing the risk riding on a policy issued to insure the property. For example, determining whether the property is located near a flood plain, fault line, tornado alley, or wildfire zone.
To accomplish these goals, insurance companies require two software solutions. The first is address validation certified by the United States Postal Service (USPS), which verifies, standardizes, and corrects address data as needed, and determines if the address is deliverable. The second is address geocoding, which determines the latitude, longitude, full ZIP code, latest census tract code, country code, and block code for the address by leveraging reference data from a variety of sources, including the United States Census Bureau, Topologically Integrated Graphic Encoding and Referencing (TIGER) files, and the USPS ZIP+4 database. Geocoding can also be used to estimate the distance between a property and a flood plain, fault line, tornado alley, or wildfire zone. By translating an address into its exact geocode using latitude and longitude coordinates, insurance companies can pinpoint the location of the property. These solutions enable the insurance company to evaluate the risk associated with the property and issue an appropriate policy.
Insurance customers also value having the most accurate and up-to-date address for their property so that insurance documents, cancellation notices, non-renewal notices, claims acknowledgements, and other correspondence arrive in a timely manner.
Ensuring insurance covers the proper property begins with ensuring the address accuracy of the property’s location.
This post comes from guest blogger Jim Harris of Obsessive-Compulsive Data Quality. Harris is a recognized data quality thought leader with over 20 years of enterprise data management experience. Harris is a freelance writer, independent consultant, and Blogger-in-Chief at Obsessive-Compulsive Data Quality (ocdqblog.com), a vendor-neutral blog about data quality and its related disciplines.