The commercialization of drone technology has exploded over the past few years and the global use of drones is expected to have enormous implications. Insurance coverage for drone operation is an essential aspect of this technological evolution.
What is a drone?
Drones come in a variety of sizes and types, from model aircraft for personal use to large, fixed winged aircraft used by the military. The International Civil Aviation Organization (ICAO) has set a new definition referring to drones as RPAs (remote piloted aircraft systems). Model aircraft are distinctly different from RPAs as they are used purely for recreational purposes.
First used in military conflicts, RPAs became much more sophisticated after 9/11. At least 50 other countries use RPAs, while there is evidence that some terrorist organizations may operate RPAs as well.
Commercially, Amazon made headlines when it petitioned the Federal Aviation Administration (FAA) to use RPAs to deliver packages, but it is not alone. Annual spending on aerial RPAs, including civilian and military applications, is projected to reach $11.6 billion in 2023 (up from $5 billion in annual spending now). Over the next ten years, the Teal Group, which provides analysis of the Aerospace and Defense industry marketplace, forecasts that nearly $89 billion will be spent on RPAs globally.
Advantages for the insurance industry
Insurance is just one industry that could benefit from the use of RPAs. For example, after a natural catastrophe, an RPA could reach a remote scene much faster than a claims adjuster. Details of a risk could be validated without travel costs or in-person inspections. Instead of climbing a ladder, a claims adjuster could dispatch an RPA to investigate an icy patch of a damaged roof — drastically saving costs associated with claims adjusters’ workers’ compensation claims.
Since 2005, Predator RPAs have provided border surveillance in the U.S.. RPAs have been used for aerial reconnaissance, aerial policing and crowd monitoring. In 2014, the FAA approved the first large-scale commercial RPA operation in the U.S., along Alaska’s northern shore. The RPAs collaborate with researchers in gathering real-time data from one of North America’s largest oil fields. These same RPAs could be used to map the path of future oil spills. In Australia and Japan, RPAs are used in agriculture to study crop yields, survey property, and to tailor the use of herbicides, pesticides, and fertilizers. In Canada, RPAs are flown over potato fields to collect information that may help farmers reduce spraying and increase yields. The use of RPAs for science and research is virtually limitless.
Real-estate photographers use RPAs to shoot aerial shots of residential properties (despite the federal ban in the U.S. on such commercial use unless there is an exemption). These lightweight, radio-controlled helicopters shoot photos and videos that show homes in context to neighbors, golf courses and other landmarks. In Canada, realtors have used RPAs dramatically; after flying around a large exterior space, the RPA flies through the front door into the home for sale.
For the full article, refer to page 10 in the Fall 2015 issue. https://www.airroc.org/assets/docs/matters/airroc%20matters%20fall%202015%20vol%2011%20no.%203.pdf