04 Aug How Drones Will Change the Insurance Industry
Just a few years ago drones didn’t even exist – they were primarily just intended for military use. Now drones are being used for journalism, filming, photography, shipping, disaster management, search and rescue, geographic mapping, structural safety inspections, precision agriculture, wildlife monitoring, law-enforcement, border patrol, construction sites, storm tracking, and fun.
Last year, the Federal Aviation Administration approved its 1,000th commercial drone permit; according to the Association of Unmanned Vehicle Systems. Experts believe that drones will be very useful for a plethora of professions, but especially in the realm of insurance. Here are five predictions for how drones are going to disrupt the insurance industry:
1.) Drones are the fastest growing sector in aviation.
The Federal Aviation Administration estimates that drone sales will rise from 2.5 million to 7 million in 2020. Out of those sales, 2.7 million will be solely for commercial purposes. Drones have already disrupted other industries such as aerial photography and filming because drones are much easier to fly, cheaper, and more versatile. However, Insurance industries have been known to fall behind when it comes to staying current with technology trends. Although we might think of drones as super cool fun toys, the reality is that drones are far more sophisticated than your average toy.
2.) Insurance claims will be efficient and instant.
Insurance is set to be one of the five top markets to utilize drones. If a person was to suffer from property damage, claims could no longer take weeks to process and be completed in just a few minutes. The versatility of drones allows insurers to have aerial views of the property, which could help insurers immediately survey the damage in a short amount of time.
3.) Setting a precedent for personal drone usage.
As far as the personal use of drones, the technology is moving at such a pace that there isn’t a precedent to follow when it comes to insuring personal use. If you are a person with a drone, then it is personal property. Most insurance companies exclude liability related to an aircraft of any kind from their personal liability policies. However, the more that there is a demand for drones, the more that insurers should plan to cover this type of property just like any other property.
4.) Insurers will be drone pilots.
The new rules established by the FAA makes getting a license to fly a drone much easier than getting a standard driver’s license. Before 2015, any company flying a drone had to have a pilot’s license. This requirement was replaced by completing a knowledge test and obtaining a drone-specific certification. Now, anyone can fly a drone for personal or commercial use.
5.) Redefining insurance and the customer experience.
In this day and age, customers want better, faster, and more personalized service. Insurers should keep in mind that their policies should include drones for commercial use as well as personal use. There are a lot of regulatory uncertainty surrounding drones, especially liability, and insurers are trying to make sense of how they can adequately insure these drones for the people and the companies that use them. The cost of a drone can range anywhere from $40 to over $2000, so it is no wonder you might want to know if it would be covered on a residential insurance policy like a homeowner, renter, or condo policy.