Drones and the Insurance Industry: Changing the Way We Do Business

March 28, 2018 / Distinguished

Drones are changing the face of the insurance industry one small airborne device at a time. Now multiply that by a few million. Ever since the FAA eased regulations on the commercial use of drones in 2016, there has been a huge uptick in drone usage, especially by insurers. There could be as many as 7 million drones flying in the US skies by 2020, with 2.5 million of those being commercially operated.

Drones could become as commonplace as computers and phones for insurance carriers conducting business as usual. Drones are typically used to assess damage in claims and manage post-disaster inspections. Roof inspections are often dangerous—but sending a drone out provides comprehensive photos and less risk to the adjuster on the ground (or, in this case, the roof). Commercial boilers and large structures that have sustained damage are other places drones reduce risk, time, and expenses in managing claims.

Hurricanes, like when Harvey hit Houston last year, offer insurers opportunities to test and use drone technology, especially during the time period when claims adjusters cannot reach flooded locations. The complementary aspect of utilizing drones to facilitate inspections can help expedite the claims adjusters’ process. Not to mention aiding in rescue efforts as well.

Drones are set to assist the insurance industry and disaster recovery in lots of ways, and while safety is a primary focus, issues like security, privacy, and nuisance risks like trespassing need to be considered when using this new technology. There is also the risk of a drone malfunctioning and causing physical or property damage. Additionally, all data secured by a drone must be kept secure.

The FAA does not require drone insurance for commercially operated UAS (unmanned aircraft systems), but many insurers recommend coverage to offset the risks of damage and other liability for these small, high-flying machines.

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