By Leslie Scism And Jack Nicas
Insurers are sending in the drones.
Federal regulators have cleared three of the nation's largest
property insurers to use unmanned aircraft, an early step that
could bring widespread change to inspections of everything from
hail-damaged roofs to collapsed buildings to flooded
neighborhoods.
American International Group Inc. said Wednesday that it
received approval from the Federal Aviation Administration to use
drones to conduct inspections in the U.S. The FAA previously had
approved State Farm Mutual Automobile Insurance Co. and United
Services Automobile Association, or USAA, to test drones in the
U.S.
USAA said Wednesday that it believed a recent federal policy
change would allow it to inspect a catastrophe site as early as
this week if needed.
But insurers could be constrained by various FAA limits aimed at
easing concerns about safety and the potential invasion of privacy.
For instance, the three approved insurers can fly drones over
private or "controlled-access" property only with permission from
the owner or other authorized party, according to the FAA's
approval letters. Flights also must take place away from airports
and most urban areas, during daytime and, in many cases, at least
500 feet "from all nonparticipating persons, vessels, vehicles and
structures."
The insurers said drones will help them inspect areas that are
difficult for people to access, such as wind farms and condemned
buildings. In particular, the insurers said drones will improve
their ability to swiftly respond to claims from hurricanes,
tornadoes and floods by providing aerial images of areas claims
adjusters can't get to. They also see drones as a way to reduce
injuries from risky roof SHYinspections.
"Previously, we either wouldn't have had access to this
information, would have had to wait, or in some cases collect it
with hands-on methods," said Eric Martinez, an executive vice
president at AIG in charge of claims and operations.
The U.S. insurance industry is one of several sectors in which
the devices are poised to have a significant impact on how
companies operate. Already, farmers, filmmakers, miners and
construction firms are using unmanned aircraft to inspect crops,
capture aerial footage and collect more data on job sites.
Amazon.com Inc. wants to use unmanned aircraft to deliver small
packages.
Still, the FAA restrictions could hamper a rollout by
SHYinsurers.
Kathleen Swain, a pilot at USAA who operates its two drones,
said the FAA curbs would severely limit how the company uses
drones. "We can go operational in theory, but we have to have
permission from all landowners we fly over," she said. "That is
going to be a bit of a hindrance."
Because of the guidelines, AIG likely won't be able to fly the
devices over neighborhood homes, at least not yet, said Mark
McKinnon, an attorney working for AIG.
The company could use drones to inspect large industrial
facilities, for example, or catastrophe sites where victims have
been evacuated, he said.
AIG said it plans to deploy drones "in select scenarios in the
U.S. this year." Before the FAA approval, AIG used drones to survey
insured buildings in New Zealand, where drone regulations are less
restrictive than they are in the U.S.
Privacy advocates said they worry that the rise of
camera-equipped drones in the U.S. is making it easier for
neighbors and companies to spy.
President Barack Obama in February sought to assuage privacy
concerns by limiting how federal agencies can use drones and how
long they can retain data gathered by the devices. Mr. Obama also
ordered the Commerce Department to convene stakeholders to develop
privacy guidelines for private and commercial drone use, though
privacy advocates have criticized that effort because the
guidelines would be voluntary.
A USAA spokeswoman said in an email that the company was "taking
prudent steps to ensure our research meets our high standards for
information security," though images collected by the drone are
"similar to what is found in mapping technologies today."
State Farm said customer SHYprivacy is "one of our top
SHYpriorities."
An AIG spokesman said in an email: "We abide by all federal and
local regulations" and will only operate "on properties where we
have permission of the owner...to only intentionally collect images
of structures that today are being inspected by a person."
For State Farm and USAA, the approvals allow the insurers to
begin testing on their own rather than in collaboration with
universities and other parties approved by the FAA at specific
locations.
Ms. Swain of USAA said the San Antonio-based insurer has applied
for a second FAA approval that would make it easier for the company
to use drones during a disaster, such as during this year's
Atlantic hurricane season.
The insurer can disassemble its drones to fit into a box to
transport as plane cargo, then reassemble them where they are
needed, Ms. Swain said.
The insurer started work on its drone effort in 2010 and ramped
up testing at FAA sites last year.
Write to Leslie Scism at leslie.scism@wsj.com and Jack Nicas at
jack.nicas@wsj.com
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