Crucial Role of Geocoding in Insurance

Geocodes are available with varying degrees of precision. However, only true rooftop geocoding can maximize an insurer's investment. 

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--With access to precise geocoding data, claims departments can swiftly assess risks, verify policy coverage and estimate claim values. This streamlined approach minimizes manual intervention, reduces errors and enhances operational efficiency.


Geocoding plays a crucial role in the insurance industry, particularly for underwriters, claims departments and adjusters, by delivering accurate structure location. Geocoding can increase profit margins, improve risk assessment, minimize losses on claims and empower claims and adjusting teams.

Geocodes are available with varying degrees of precision, such as ZIP9 geocodes, interpolated geocodes, parcel geocodes and rooftop geocodes—each offering a different level of accuracy. However, only true rooftop geocoding can maximize an insurer's investment and enhance risk assessment. 

The two most popular types of geocodes are parcel-centric geocodes and rooftop geocodes. Parcel-centric geocodes identify the center of a parcel or lot, while rooftop geocodes find the exact roof of a structure. Certain providers, including major search engines, may pass off parcel-centric geocodes as rooftop-accurate. 

Relying on parcel-centric geocodes when writing policies can lead to inaccurate risk assessments and underwriting compliance issues. Parcel-centric geocoding may increase the number of full-limit-losses paid, decrease revenue or even get your company in hot water with regulatory agencies. 

When vetting geocoding providers, it's worth verifying the absolute accuracy of the geocodes they return. 

Great Geocoding Requires Great Address Validation

Address validation cleanses and standardizes the geocoded addresses to reduce false positive matches. Using address validation, geocoding can also identify the address type, including non-postal address, residential or business, or determine if there is a multi-unit structure.

Pairing Geocoding and Data Enrichment Maximizes ROI

Whether you're writing a business owner's policy (BOP), vacant land policy, property policy or product liability policy, you must ask your clients questions about their home or business. However, peppering your clients with property attribute questions regarding their home or business can be tedious. Often, clients don't know the answer, and sometimes, they may even give incorrect information. Rooftop geocoding enriched with property attributes can improve the experience for you and your clients. 

Insurers using property attributes to augment the data they already have typically do so through a separate company's application programming interface (API). Through this API, insurers can obtain hundreds of supplementary data points and use them to paint a clearer picture of the risks involved with insuring the property in question. 

In addition to generating a positive ROI on the front-end, geocoding and data enrichment provide insights that enable insurers to enhance their risk management strategies. By identifying specific property characteristics and associated risks, insurers can develop loss-prevention initiatives and offer valuable risk mitigation advice to their clients. 

Geocoding Using Cloud-Based APIs Adds Flexibility and Speed

Historically, geocoding uses on-premise systems that tie up hardware resources and require time-consuming updates and processes. Geocoding using cloud-based APIs is more efficient because all data updates and hardware maintenance aren't needed. The flexibility of chaining together multiple cloud-based APIs is a huge plus.

Cloud-based geocoding can also be very fast. Some cloud-based providers can process geocodes much quicker than most on-premise systems for a fraction of the overall cost.

Persistent Unique Identifiers (PUIDs) Are Key 

Addresses can sometimes change due to street name modifications, address renumbering or subdivision developments. Getting the most out of geocoding means choosing a provider with persistent unique identifiers (PUIDs)—a type of digital fingerprint. PUIDs remain constant even when the underlying address data changes—allowing insurers to link historical data and maintain data integrity.

Considering how often addresses can change, it's not cost-effective for carriers, brokers and agents to manually correct them. PUIDS can help insurers automate this process, saving time and cost. 

And, by linking the property to previous claims, property updates, loss trends and other data, underwriters can more easily determine policy premiums and program eligibility. 

Geocoding Streamlines Straight-Through Processing

Rooftop geocoding has become a necessity for streamlining straight-through processing in claims departments. With access to precise geocoding data, claims departments can swiftly assess risks, verify policy coverage and estimate claim values. This streamlined approach minimizes manual intervention, reduces errors and enhances operational efficiency.

Rooftop geocoding also aids in efficiently deploying adjusters. Empowered with exact coordinates, insurers can assign adjusters who are geographically closest to the claim site, send them to the right place the first time and reduce travel expenses while providing timely and responsive claims handling. 

The future of geocoding holds exciting possibilities. With advancements in artificial intelligence, machine learning and data analytics, insurers can harness the power of geocoding to extract deeper insights from location data. This enhanced understanding of risks and exposures will enable insurers to develop more tailored policies, promote risk management and drive ROI

Berkley Charlton

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Berkley Charlton

Berkley Charlton is the chief product officer at Smarty, a leader in location data intelligence.

Prior to Smarty, Charlton worked at Pitney Bowes Software as their managing director of product management. He led the global data business and geocoding business in creating an entire suite of location intelligence, geocoding and data products with their enterprise location intelligence portfolio. Charlton also worked as the VP of strategy and business development at Gadberry Group, where he managed product strategy for geocoding and data products.

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