Drones And Insurance: Seeing The Value To Customers

drone insurance

Photo from Don McCullough

The word “drone” still causes most people to think of a military drone, not drones used for commercial use. But when it comes to the insurance market, drones aren’t that scary. They can actually have some practical applications to improve service.

Claire Wilkinson of the Insurance Information Institute (I.I.I.) notes that some insurers have filed permission requests with the FAA to use drones — or unmanned aerial vehicles (UAVs) — in faster processing of claims.

The specific use would be to target heavy disaster areas and get a quicker reading on the damages. (No use has been mentioned for the standard fender bender, and it would likely fail to be cost efficient at this time.)

It would have definitely been handy for Hurricane Sandy and Hurricane Katrina. UAVs are simply more capable of getting to high-risk environments and assessing damages than the flesh-and-blood claims person. As a result, families could have settlement checks in a few days, thus enabling them to pick up the pieces and rebuild their lives.

Drones could also be employed to quickly and effectively assess property damage and larger traffic accidents, thus helping companies to get pictures and information and go to work while customers are still too shaken up to think straight. In other words, it’s potentially an added layer to amp up the peace of mind that an insurance customer feels.

However, there are risks, and that was pointed out in a recent blog post from Steve Doyle at WillisWire.

Standard aviation risks will be as pertinent to UAVs as they are to other aircraft. Privacy is also a major one to consider.

“Commercial drones will likely be hired for narrow purposes: inspecting wind turbines for cracks or roadways for storm damage, for example,” Doyle said. “But the digital eyes will see anything in their view and send back that information to the party collecting the visual data. This raises privacy concerns issues. Surveillance of employees or non-employees, whether intentional or not, could have serious liability repercussions that will need to be addressed.”

With sales of UAVs expected to triple from $5 billion in 2013 to $15 billion in 2020, it’s pretty clear that drones and insurance will go hand-in-hand in the not-too-distant future. The time between then and now will require the government to figure out how to regulate this burgeoning technology.

Doyle adds: “Regulation is a key element to the successful widespread development of the drone industry in the U.S. given the complexities of the liability environment, the crowded skies over metropolitan areas, and the variety of UAVs and their uses.”

 

In Summary

While the use of drones in the insurance field has yet to be worked out, it’s easy to see where the technology could do some good. By assessing damages quickly and getting affected claimants their settlements faster, it’s just one more way to expedite the process and reduce the overall stress levels surrounding a potentially traumatic life event. The risks are there, certainly; but with a commitment to proper regulation, UAVs are just one more tool to serve you, the customer.

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