Last winter, Michigan brewery Lakemaid tried to deliver beer to ice fishers by drone, only to be thwarted by FAA regulations that, at the time, prohibited unmanned aircraft from flying above 400 feet for commercial purposes. More recently, Amazon has been working with the FAA to test the viability of same-day deliveries by unmanned aircraft.

Beer and books aside, you can now add insurers to the list of businesses that are interested in drones. In October 2014, State Farm filed for FAA permission to test unmanned aircraft for insurance purposes. This February, the insurer received approval to use drones for roof and aerial inspections. Similarly, Allstate joined the Property Drone Consortium, a collaboration between insurance and construction companies to explore commercial use of drone technology.

Indeed, Property Casualty 360 reports: “The FAA estimates that by 2020, about 30,000 small, unmanned aircrafts will be used for all types of business purposes. Worldwide, total spending for these aircraft systems is expected to top $89 billion in the next decade…”

Notably, the FAA has proposed new regulations that would permit drones of less than 55 pounds to be flown below 500 feet. While far from a final ruling, this would open up avenues for insurers to use drones—to improve underwriting and claims adjustment (and especially to assess damages after catastrophes), streamline operations and even retool the claims workforce. But as with any new technology, there are some challenges ahead. Join me over the next few weeks as I look at the pros and cons for insurers.

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