Insurance is among the industries already deploying and expanding the potential of commercial drones,eyeing two strategic objectives: better risk management through improved data collection, analysis, and actionable insights; and reduced operational costs through improved efficiency and effectiveness in claims adjudication, claims processing, and customer experience.

Several leading insurance companies were first in the air, securing FAA permission as early as 2015 to use drones for aerial data collection, catastrophe response, research and development, underwriting, and claims resolution support. Since then, more insurance companies, both national and regional, have begun using drones.

Sensing disruptive potential, numerous insurance technology (insurtech) firms have entered the drone domain to offer both comprehensive and specialized services to the insurance industry.

For example,Betterview, an insurtech devoted to using drones for property inspections, has executed more than 6,000 rooftop inspections in the last two years. the company signed a partnership agreement with Loss Control 360, which makes software for insurance companies and inspectors. According to it’s website “Betterview is the Property Intelligence & Risk Management Solution the insurance industry depends on to identify and mitigate property risk, improve underwriting and inspection efficiency, and build a more transparent customer experience.​” Nearmap, one of the world’s largest location intelligence and aerial imagery solutions providers, has signed an agreement to acquire Betterview.

According to a report by Deliotte drone deployment is rapidly expanding and evolving, with current and potential applications spanning the insurance value chain. For example:

Pre-loss

– – Risk engineering and pricing – Aerial site assessments can identify property features that allow the owner either to seek a reduced risk profile or to take appropriate actions to lower overall risk and justify premium discounts.
– – Natural disaster monitoring – Drones can be quickly and safely deployed to monitor areas threatened by natural disasters. Governments working with insurance companies can monitor a situation and alert local residents to potential danger.

Post-loss

– – Inspection – Drones can provide a safer, faster, and more cost-effective way to conduct a site inspection, particularly in challenging working conditions.
– – Risk assessment – Drones may allow insurers to engage a generalist, rather than a specialist, to perform field assessments and obtain high-quality visuals.
– – Claims adjudication – The precise photos that drones take can potentially improve the quality of the claims adjudication process.
– – Fraud prevention – The moment a property claim is reported (First Notice of Loss), a drone could be deployed to inspect the claims site, increasing information capture accuracy and timeliness.

But Deloitte cautions that “Courts have upheld trespass claims involving aircraft operated below navigable airspace that interfered with a property owner’s use of their land.In addition, drone operators may be liable for trespassing for physically entering on land to retrieve a drone. In addition, where risk assessment is conducted by drone, regulators may expect insurers to seek prior approval from insureds. Because drones are capable of flying at lower altitudes than manned aircraft, common-law nuisance claims against drone operators might be successful.”

However, according to a recent report from The Wall Street Journal aerial home inspections are something insurance companies claim their customers give consent to when they purchase a policy, and that it allows them to “respond more quickly to disasters and charge rates that better reflect a property’s risk.” The companies also claim that aerial home inspections are “less intrusive” than visiting customers’ homes to do inspections.

Major insurance companies such as American International Group, State Farm and Allstate have gained approval from the Federal Aviation Administration to use drones for insurance adjustment claims over the past few years.