Keven Moore on Insurance: Drones may be coming to a fender-bender or storm near you

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(Photo form WIkimedia Commons)

Unmanned aerial vehicles, or drones, are commonly used by the military, but they are now being developed for much broader uses in the civilian world.(Photo form Wikimedia Commons)


 

It’s a bird, it’s a plane …no …it’s a drone? More specifically, it’s an insurance drone?
 

Imagine in the future, as you are driving to work, you rear-end the car in front of you when it stopped for a yellow light. As you wait for the police to arrive, you look up in the sky and see an unmanned aerial vehicle, or drone, with your insurance carrier’s logo visible on the side. It hovers over the accident scene collecting pictures from every angle while also “talking” to both vehicles’ motherboards, gathering G-force data, speed at impact and weather conditions.
 

Or imagine a severe storm hitting your neighborhood at night, blowing off roof shingles on several houses. As you survey the damage to your house the next morning, you observe a fleet of drones flying through the neighborhood as they investigate the damage and collect data to help the insurance adjusters process their claims.

Just like Teflon, smoke detectors, the Internet, memory foam, and Velcro, drones now appear to be the next government innovation set for civilian use. The same aerospace technology created by the CIA and used to hunt terrorists could be buzzing around your neighborhood soon. This technology is being introduced and explored by many different industries, and the insurance industry appears to be leading the way.
 

Late in 2103, Amazon announced that it is exploring a drone delivery system. But first they will have to solve numerous technological challenges, such as increasing battery life, getting the drones to work without a central command, getting them to “think” on their own, and determining what kind of navigation sensors they will use. They will also have to work out the liability and insurance concerns before a drone make any deliveries.
 

Many of us had never heard of drones until the United States military utilized their small fleet in the Iraq war, and most were unarmed in the beginning, primarily being used for surveillance purposes until they decided to arm one for a missile attack in 2004. Today, according to one report, the military is operating in excess of 7,000 unarmed UAVs in Iraq and Afghanistan, ranging from Predators with 55-foot wingspans to micro UAVs that soldiers launch from the palms of their hands.
 

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The drone industry might one day produce 100,000 new jobs and $82 billion in economic activitiy, one report shows. (Photo from Wikimedia Commons)

While drones are commonly used by our military for surveillance and dropping bombs, UAV are now being developed for much broader uses outside the military. Take, for instance, Datron’s 2.5-pound drone in San Diego that is equipped with a camera, can climb to 1,500 feet and has a two-mile radius. It was designed to help firefighters obtain immediate situational awareness, to help make tactical and operational decisions to assist in fighting fires instead of placing men on an unstable roof. The UAV is sent up to assess the roof and how the fire is spreading to help make quick decisions to safely and effectively fight the fire.
 

A report by the Association for Unmanned Vehicle Systems International predicts that in just a few short years the drone industry may add up to 100,000 new domestic jobs and produce $82 billion in economic activity between 2015 and 2025. However, for now many states are cautiously placing restrictions on drone usage.
 

Many have a fascination with this type of emerging technology, and countless ideas for usage are being tossed around. Imagine a drone, instead of a person delivering a pizza, for example. Even the utility industry is interested in having them hunt for downed power lines after a storm.
 

From a risk management and safety perspective, uses for drone are likewise endless. Think about it: if a lifeguard spots somebody struggling to swim too far out off shore in the ocean, he could quickly deploy a drone to deliver a life ring much fast than rushing out and swimming to his aid.
 

As the insurance industry becomes more interested in using drones for property claims investigation, they will become more of a commonplace tool for underwriting and the investigation process. Such use will allow professionals to carry out a variety of tasks, thus allowing adjusters and underwriters to go boldly where no adjusters or underwriter has gone before.
 

Here are a few ideas for usage in the insurance and risk management industry:
 

Catastrophe (CAT) Damage Assessment – Today drones already gather data from some of the most dangerous weather phenomena on earth. But one day drones will be able to follow severe weather in real time, serving as eyewitnesses, sending information back to the public and emergency responders. Reporting damage in real time while it is occurring will replace the need to interpret damage through the use of radar signatures and traditional storm reports from storm chasers. The level of detail that a drone can reveal and make available for insurance companies to properly make a claims payment decision is massive.
 

Roof claims and investigations – For insurance companies, the most time consuming and most hazardous task of a field adjuster’s job is to climb up on to a roof to assess damage. By using a drone, an adjuster can stay off of a ladder and observe all types of structures and roof pitches as the drone flies close to a roof without disturbing it. A drone will be able to zoom in and be able to count surface granules on an asphalt shingle. They will be able to review for hail damage, nail pops, roof blisters and other common issues all while the adjuster stands on the ground or sits behind his or her desk.
 

Fire and explosion investigations – Complex fires and explosions are difficult to investigate, offering several challenges quick investigation. Often, investigators and claims adjusters will have to rent aerial boom trucks and scissor lifts or employ the use of a fire trucks to acquire a bird’s-eye view of the damage. The value of viewing down on a fire loss to observe burn or damage patterns is crucial to investigators. After an explosion the first thing investigators search for is the radius of the debris field, which is much easier to determine the origin or cause from above. As drones come into use to help investigate such disasters, investigators will not be able to substitute the low costs, flexibility and safety of operating a small drone for exercises such as these.
 

Underwriting and loss control surveys – Before insuring any property coverage, an underwriter must first send out their loss control inspectors to assess the condition of the property before they can complete the underwriting application. This is very costly when you factor in the labor costs and travel and vehicle expenditures involved. In the future, underwriters can send out drones to assess square footage of the building, the condition of a building’s exterior as they can provide great views of roofing, siding, windows, perimeter fencing, lighting exterior hazards, neighboring exposures in great detail. They can also use it to monitor if an insured really did replace his or her roof after that last hail storm settlement.
 

Building envelope studies – Tremendous amount of time and energy can be exerted on tracking leaks and other sources of water damage to a building. In the future, drones will play a vital role in improving this process. Today infrared cameras are a common tool to observe wet areas in roofs and walls, as well as identifying areas of too much air leakage. These cameras can be now be mounted on to a drone, giving adjusters a bird’s-eye view of a building’s heat signature. This is already being done successfully in many search-and-rescue operations, where seeing a person’s heat signature in the darkness of the night or in bad weather is an advantage.
 

This new drone world is not a reality just yet, considering all concerns over privacy. The FAA has not yet released regulations governing the commercial use of UAVs—though it no doubt will soon—as approximately 42 states have some form of anti-UAV legislation in various stages of consideration.
 

With all the advantages that they offer, the question is will drones replace the human workforce one day? No not yet; the data they collect can be cumbersome and complex when compared to many common investigative tools, and the data is often useless without professional evaluation. But if you are still worried about you job, my suggestion is that you learn how to fly a UAV and adopt the evolution of change.
 

Be safe, my friends.

 

Keven Moore is director of Risk Management Services for Roeding Insurance (www.roedinginsurance.com). He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.

 

Click here to read more columns from Keven Moore.

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