In the wake of record damage by Hurricanes Harvey, Irma and Maria, and potentially additional hurricanes to come, the Federal Aviation Administration (“FAA”) has begun to open up the skies to the use of drones. To that end, the FAA has advised the following about drone use generally in hurricane-impacted areas:
The FAA warns unauthorized drone operators that they may be subject to significant fines if they interfere with emergency response operations. Many aircraft that are conducting life-saving missions and other critical response and recovery efforts are likely to be flying at low altitudes over areas affected by the storm. Flying a drone without authorization in or near the disaster area may unintentionally disrupt rescue operations and violate federal, state, or local laws and ordinances, even if a Temporary Flight Restriction (TFR) is not in place. Allow first responders to save lives and property without interference.
Notwithstanding the foregoing, the FAA has also recognized that used properly, drones can have multiple benefits in the wake of the hurricanes and, as of September 6, 2017, has issued more than 70 authorizations to drone operators for a broad range of activities. Among the activities permitted is the use of drones by insurers to document property damage and adjust claims. With displaced insureds, flooded streets, and significant property damage that could render property inaccessible for extended periods, the ability of insurers to quickly and relatively conveniently fly their drones and adjust claims will be on full display for the first time.
While useful tools for insurers and their adjustors, drones also come with their own set of safety and privacy considerations. To that end, as restrictions are lifted and more flights are permitted, there is a strong likelihood large quantities of drones will be flying and potentially in close proximity, increasing the risk of collisions. There is also the need to keep airspace safe for traditional manned aircraft, particularly helicopters, being used in recovery efforts. Moreover, with thousands of displaced landowners, drone operators tasked with securing consent prior to flying over an insured’s property may find it difficult to timely locate the owner and secure the necessary consent. Will the operators abide by these operational standards? Regardless, insurers will no doubt end up collecting vast amounts of data they will need to ensure is handled properly.
Insurers and their own drone operations will thus be tested, and not just from the standpoint of whether they can safely operate drones and gather relevant data, but from a customer service viewpoint as well. The first widespread use of drones raises a number of potential questions the answers to which insurers and reinsurers will only know through the passage of time. For example, will processing time be faster using drones? Will insureds appreciate the potentially less personal adjustment process from a remote claims examiner? Will any distrust in the process creep in? Does this create a potential higher incidence of contested claims?
The 2017 hurricane season will challenge the insurance industry perhaps like no other, and will be remembered for years to come due to the size and scope of Harvey, Irma and Maria and the billions of dollars in losses they have left behind. This hurricane season will hopefully also be remembered as the time when insurers first successfully incorporated the use of drones in adjusting large scale catastrophe claims.