By Jeffrey C. Taylor
On a rainy morning in January, an unmanned aircraft wobbled erratically over the nation’s capital before coming to ground on the White House lawn. The drone’s surprise landing sent the Secret Service scrambling and spoiled more than one intelligence official’s breakfast. That a drone had broken into restricted air space without being detected was a breach serious enough. Fortunately, the craft wasn’t carrying a camera, a missile, or a vial of anthrax.
With questions of national security now hovering in their own right, investigators went to work. To the Secret Service’s relief, the drone was without weaponry, and agents soon found the responsible party — not a terrorist cell, but an inebriated government employee who piloted the drone in an after-hours joyride. In the brief history of unmanned flight, Washington’s crash landing became a sobering moment of “what if?”
For insurers as well as law enforcement officials, drones carrying remote sensing technology are raising further questions as they transform both underwriting and claims handling. These tools are providing detailed information that can bring greater speed and precision, reduce underwriting and claims-handling costs, and enhance customer service. As remote sensing devices become more sophisticated and ubiquitous, property insurers and repair professionals are working to establish ethical guidelines and make sure the technology is deployed responsibly.
In the property insurance industry, remote sensing is most commonly used with advanced sensors attached to manned aircraft. The sensors capture imagery and data about structures that can be used to determine exterior dimensions and even building features and materials. Sensors could also be attached to unmanned aerial systems (UAS), but commercial use of drones is currently not allowed in the United States. The FAA is working on final rules to ensure “safe integration” of unmanned aircraft in U.S. airspace, rules that Congress has mandated be in place by the end of 2015.
While lawmakers have delayed commercial UAS use, rapidly rising personal use of drones has gone largely unchecked and unregulated. In 2014, Bloomberg News reported the retailer Amazon was selling 10,000 drones per month. With thousands of personal drones joining the roughly 7,500 commercial drones expected by the FAA to be in flight by 2018, American horizons may soon be buzzing. Drone use by untrained hobbyists is raising questions about limits of the technology, and stories of irresponsible use are becoming commonplace. Major incidents from the past year have included the now notorious crash on the White House lawn and a drone piloted into the Grand Prismatic Spring at Yellowstone National Park. Fears of further misuse prompted the FAA to declare the 2015 Super Bowl a “No Drone Zone,” and several municipalities have passed anti-drone laws, including some that authorize citizens to shoot them down, if necessary.
Property insurance experts are presumably watching such incidents with rising concern, with many seeing the need to reassure policyholders that they are using remote sensing safely and ethically. Industry groups, such as Xactware’s Remote Sensing Lab (see sidebar), provide property insurance leaders an opportunity to establish ethical guidelines, help maximize safety, and more effectively address privacy issues, since safety and privacy drive most concerns about drones and remote sensing technology. The groups believe that new industry standards should help allay policyholders’ worries and better inform consumers.
The FAA’s proposed guidelines for commercial drones include strict safety standards broadly supported by property insurance professionals. For operators, standards include advanced training and flight experience, periodic recertification, thorough preflight inspections, and reporting of accidents. The range of flight restrictions includes UAS size and weight, altitude, speed, and restrictions for certain types of airspace, such as near airports or operations outside the operator’s visual line of sight.
Beyond those rules, insurance professionals are considering other standards for drones used to inspect exterior damage, including the following:
In addition to a single-site damage inspection after a natural catastrophe, drones offer enormous potential for assessing commercial buildings, multifamily housing, and neighborhoods. Specific standards for those uses are actively being considered. The standards can also help drive new advances in technology that may help improve safety and efficiency. Already, insurance professionals can arrive on a loss site with a complete exterior plan of the structure, including the roof and information about detached buildings, decks, patios, materials, and finishes. To complete the estimate, the estimator focuses on assessing the damage, which may still require some climbing of a ladder to get a closer look at potential repairs.
In the not-too-distant future, an operator may be able to determine the scope of damage by placing a drone in a case on the ground and opening the lid. Once preflight inspections and tasks are finished, the operator pushes a single button to launch the flight. The drone can use aerial data downloaded to fly a predetermined route automatically and then return to the storage case. Sense-and-avoid technology is also under development to help drones steer clear of other aircraft and obstacles.
Long before the advent of drones, the U.S. Supreme Court established the principle of a “reasonable expectation of privacy.” In the past, that largely meant law enforcement couldn’t eavesdrop on conversations in a public phone booth without a warrant. What precisely that means in the new era of data mining, social media, and remote sensing is still being defined. Privacy concerns may be fueled by alarmists who often overstate the kinds and volume of data being collected and how it is used.
Certainly, a flying platform mounted with a camera and other sensing capabilities has tapped into some of the deepest privacy fears held in society. Most articles on drone technology are followed by comments from readers voicing their anticipations of drone cameras looking through windows, flying over backyards, or intruding on special events, such as a wedding or even just a trip to the beach. Those fears often fall along generational lines: Older generations have much higher expectations of privacy; younger generations are often more open to sharing information through innovations in technology.
Most policyholders generally trust their insurance carriers with information they consider to be private. Property professionals are looking at standards that build on that trust and enhance the relationship. Education is paramount, as are incentives such as discounts or website access that offers policyholders a shared benefit in the technology. Many are also looking at collaborative tools that allow the policyholder to actually watch the process and participate in collecting the information.
Such measures may help policyholders better understand that remote sensors often gather no more information than an adjuster who physically conducts a property inspection. Policyholders typically become far less fearful when they see the information that is being gathered and how it is being used. Although most privacy concerns are currently focused on UAS-mounted sensors, those concerns may likely soon move indoors. Before long, an adjuster or underwriter may be able to walk through a structure with a small handheld sensor that generates a virtual floor plan — including general dimensions, outlines of any sloped ceilings, and the locations of missing walls, doors, and windows. Rooms that used to be very difficult or time-consuming to measure, such as areas with coffered ceilings or a series of dormers, will be measured in the time it takes to walk through them.
By setting standards for ethical use at the onset of the technology’s implementation, property professionals can help effectively address fears while building confidence and customer satisfaction. They should be willing and able to explain why they are using the devices, what information is being captured, and how its collection improves service. Openness and transparency will not only help alleviate concerns but likely create goodwill with policyholders who soon realize that ethical use of this technology stems from a commitment to quality.
Jeffrey C. Taylor is vice president of Xactware’s Property InSightTM team.
Xactware’s Remote Sensing Lab is a collaborative industry group dedicated to developing remote sensing technologies specifically for property professionals. This includes the development of sensors, the platforms used to transport them, and the advanced neural network that collects, processes, and stores data.
Remote sensing devices are providing data that can be used to measure structures, identify materials, scope damages, discover hazards, assess risk, and much more. Remote sensors can be mounted on delivery platforms such as cars, aircraft, drones, robots, and even a person’s glasses, watches, and clothes. Information collected by sensors is dramatically more useful when analyzed and processed by an advanced neural network that extracts detailed information and stores it for industry use.
At the Remote Sensing Lab at Xactware headquarters in Lehi, Utah, Xactware’s leading experts and scientists are working with elite property industry professionals to effectively develop this revolutionary claims technology that will shape the future of the industry.