In the most critical time of loss, policyholders want to be made whole again, as quickly and efficiently as possible. But, with challenges during a loss situation going so far as not even having a mailbox, how can carriers deliver on a promise to send the check?

Not long before I recorded this podcast with Andy Labrot, the Vice President of Product Management at Sapiens, back-to-back devastation caused a massive $55 billion in expected insured losses from Hurricanes Helene and Milton. Fast forward three months and the California wildfires have added another estimated $40 billion to the already staggering total.

As the impact of these disasters grows, I can’t help but ask: How fast can families get access to their claim funds, so they can pay for shelter, food, and essentials?

The answer reveals an unfortunate flaw in the current insurance claims process. While many carriers have the capability to authorize claims, delivering funds is often slow. Even with ACH payments, which can take several days, policyholders may be left waiting for relief. Worse still, many claimants receive physical checks — an outdated and inefficient method of disbursing funds, particularly when they may have lost everything in a fire or hurricane.

A recent study from Digital Insurance reveals that three-quarters (74%) of insurance professionals believe providing claimants with instant access to digital funds is very important or critical. So, where’s the disconnect?

One of the key obstacles is educating policyholders on how they can access their claims payments quickly. The frustration of waiting days — or even weeks — for a check can add unnecessary stress during an already difficult time. It’s critical that carriers not only implement faster payment systems but also ensure that policyholders understand how to use them.

91% of Americans own a smartphone, but a 2024 study revealed only about 65% of people use mobile apps or websites to pay their bills. Many simply don’t know the digital options available to them and it’s up to insurers to bridge that gap.

In 2025, it’s essential for carriers to embrace technology for faster, more reliable access to life-changing funds. Digital payments for everyone are here to stay and carriers should modernize their business to solve immediate challenges, prepare for future technological advancements, and anticipate the needs of tomorrow’s policyholder.

Listen to the full conversation or read transcript highlights below to learn how insurance carriers can remain competitive and meet the needs of modern policyholders.

Andy Labrot: How are claims typically paid out today versus how you believe customers want to receive their claim payments?

Jim Vandanacker: Honestly, and this is my favorite topic, claims payments. So yeah, let’s dig into it. So, we’ve all seen an influx of natural disasters lately. Year over year, and they seem to be more frequent. So, let’s take the most recent catastrophic events from Hurricanes Helene and Milton in the Southeast. Florida and North Carolina [were] left devastated among the other impacted end zones, [and] have policyholders that have lost everything, every personal item, along with their home.

So, how is an insurance company going to communicate with them? How are you going to send them a check when their home is washed away, and their mailbox is a quarter mile down river? It absolutely blows my mind on how many carriers still use manual processing and sending out checks as a default distribution method. And look, I get it. I get the “if it ain’t broke, don’t fix it” mentality. But is that what your policyholders want? Is that what they really need? And I’ll tell you right now, it isn’t. How as an insurance carrier, are you going to be the superhero that the family needs in their most critical time of loss, when they can’t get even a phone call in or receive mail?

It is so important that the carrier and the policyholder embrace technology to get the money where it’s needed immediately. And a lot of what we see really is that, once again, lack of communication. What options are available to policyholders? Are these customers aware of the choices that exist due to our connected banking and our real-time transactions, even digital wallet options? These are new things that people don’t know about. Andy, I’m sure you’ve heard of PayPal, Venmo, Apple Pay, Google Pay. You may have used it, but those are actually options that are available to both pay your bills and also receive claims. And a lot of people don’t even know that’s available.

Andy Labrot: Well, since claim payments are such a critical factor when it comes to retention for carriers. And as you pointed out, policyholders in times of need are really tuned into their favorite radio station, which is WIFM. Which is “what’s in it for me”? Getting payments the fastest way possible would be clearly a benefit to the policyholder and be largely beneficial to
the carrier from a retention perspective. What other options do you see in that area for carriers to pursue?

Jim Vandanacker: You know, the short answer of how people want to receive their payment is instantly. It’s a great concept that everybody wants to execute on. But how is that done in the most convenient and transparent way possible? Because the advances of technology and digital wallets, as I mentioned earlier, they’re also new styles of connectivity behind the scenes that carriers know … regarding real-time payments and transactions that makes payments occur instantly, not within 24 hours, but within minutes, or the modern method of ACH … which is the most typical electronic method of digital phone transfers.

I think the most critical lines of business that this can really apply to, where you want instant claim phone availability, applies to Homeowners’ Insurance, Flood, Workers’ Compensation. But let’s not kid ourselves; when the claim happens, as we mentioned earlier, policyholders want to be made whole again by their insurance company that they trust.

Andy Labrot: Well, Jim, that’s a fantastic answer. So last but not least, what issues do Americans encounter with digital money? So we’ve talked about speed. We’ve talked about why this is a benefit to them. So why hasn’t there been that universal adoption saying we want this and we want it now, you know?

Jim Vandanacker: Understanding the options. Luckily, it’s not a heavy lift on the end of that consumer to set up modern payment methods. I know that some of these digital wallet methods, people may have never heard of them before, but it is actually easy to set up. I was actually in London recently, and I had no idea that their modern way of paying everything is by, no contact. So I downloaded that digital wallet app on my phone and I could pay everything with it. My bus pass, my train pass, everything. And it’s fantastic. Now I have this payment method that I can pay with groceries.

All these digital methods are fantastic and need to be embraced, because it’s not just on consumer transactions day-to-day, but like we mentioned, you can pay your bills, you can receive claims. If I have something that happens and I can get a rental car, I need money for rent as a home replacement for my house that got washed away. You know, I can get that instantly. And that’s made available and a lot of modern vendors are accepting these digital wallets. And I think it’s, once again, just an education point of view.

And [at] InvoiceCloud, we take a great amount of pride in being able to be that strategic partner for insurance providers to help create an innovative, convenient, and secure payment method to make customers happy.

Download our ebook, Stop the Checks! Deliver On Brand Promise with Outbound Payments, for mission critical insight into digitizing the claims payments process to meet heightened customer expectations, reduce costs, and decrease the risk of fraud.