How Drones Will Impact Claims

Drones may be a game changer for claims investigations and processing, said Kevin Quinley, founder and principal of Quinley Risk Associates. In a Claims Insights podcast interview with Claims Journal, he discussed the transition in the use of drones from strictly military operations to a variety of commercial applications.

Amazon is just one of many companies considering the use of drones to deliver packages. Law enforcement agencies already use drones for a variety of functions, like wildfire and traffic management and bridge inspections.

Domino’s UK tested pizza delivery in London and there is a pizza maker in Russia that has been delivering pizzas by drone since 2014.

Quinley said hobbyists have expressed a huge interest in drones as evidenced by the huge sales of the unmanned aerial systems this past holiday season.

He described four main areas of impact that drone technology will have on the claims industry. These include:

1. On scene investigation and accident reconstruction.
2. Surveillance and the monitoring disabilities.
3. Claims settlements.
4. New forms of insurance coverage for drones.

Currently, the cost of sending adjusters to investigate accident scenes is high but could be alleviated by the use of drones in the claims process. In addition, the ease of rapid deployment is another benefit. The information obtained by the drones could help determine liability and confirm injury, Quinley said.

Drones also have a role in fighting insurance fraud through possible surveillance of bodily injury/workers’ compensation claimants.

“With drones, this could arm adjusters with discreet ways to …gauge the physical activity of claimants who claim disability to either verify or impeach disability claims,” Quinley said.

Their ease of use will aid in reducing an insurer’s reliance on investigative firms’ surveillance vans.

“I could see drones refining the fraud fighting ability of insurance companies and claims people,” said Quinley.

Drones can also be used to speed up claim settlements. Insurers could deliver settlement checks to policyholders and claimants resulting in quick turnover of files.

The insurance market has been cautious in response to the growth in commercial and personal use of drones, Quinley said.

There are liability risks, like the potential for drones to drop out of the sky and because they fly at low altitudes, there is the risk of a drone crash possibly causing property damage. In addition, Quinley expects lawsuits relating to drone use alleging invasion of privacy.

There is reason to be concerned about the safety of drones, Quinley said, citing examples here and in the UK. In Virginia, a videographer was fined $10,000 for operating a drone recklessly while recording a promotional video for the University of Virginia campus. In Germany, a drone crash landed at the feet of Angela Merkel, he said.

Quinley expects the plaintiff’s bar to become interested in drone technology. It’s only a matter of time before it becomes a new sub specialty for personal injury attorneys, he said.

He expects they will take advantage of both negligence and product liability claims against drone operators and manufacturers.

There is a silver lining, he said. While there is risk, it creates opportunity for insurers to create new policies for both first party and liability coverage.