In recent weeks, it has become much easier for insurers to use drones—also known as unmanned aerial vehicles (UAVs)—for a variety of purposes. State Farm, AIG, USAA and Erie Insurance Group were all successful in obtaining Section 333 exemptions from the FAA:

  • State Farm had two exemptions approved in February 2015, for roof and other aerial inspections.
  • AIG and USAA were granted exemptions on April 3 for research and development. Notably, USAA has been conducting research and development on drones since 2010 in partnership with Texas A&M University, and can now conduct independent research.
  • Erie Insurance Group was granted an exemption on April 8 for three purposes: (1) research and development; (2) surveys and inspections and (3) risk assessment and management, loss prevention and underwriting.

In addition to the Section 333 exemption, these insurers will also be granted blanket Certificates of Waiver or Authorization (COA) for flights at or below 200 feet. Previously, they would have had to apply for and receive a COA for a particular block of airspace.

New rules for drones

Earlier this year, the FAA announced interim policies to allow commercial drone use with restrictions—for example, drones must weigh less than 55 pounds, may not carry cargo and must stay certain distances away from airports or heliports. These policies are clearly encouraging insurers to devise new applications for drone technology. As I wrote in an earlier blog series, the applications include claims adjustment at large or complex sites, and in catastrophe situations.

However, current rules specify that drones must operate within visual line-of-sight of the operator, and may not fly over people. This may limit their utility in a catastrophe situation. According to Insurance Networking News, the Property Drone Consortium (PDC), a lobbying group representing insurers, construction companies and drone manufacturers, is working with the FAA to identify these and other scenarios where drones could be used safely, but which are not permitted currently.

In general, these developments are good news for the insurance industry, signaling willingness on the part of regulators to help businesses leverage new technology in innovative ways.

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