Insurers Using Drones To Do Faster, More Accurate Hurricane Harvey Damage Assessments

Drones can complete three damage assessments in the time it takes one human to do a single damage estimate. JL


Nicole Friedman and Leslie Scism report in the Wall Street Journal:

Harvey is estimated to have caused $20 billion in insurable damage.Travelers Cos. has  24 drones ready to be used in Texas and about 200 Travelers employees certified by the FAA as drone pilots, according to a spokesman.  Allstate Corp. expects to make hundreds of flights a day and thousands a week with drones that it uses on a contract basis.

Property insurers are preparing to fly dozens of drones over homes and businesses to assess damage in the wake of Tropical Storm Harvey, the first widespread use of unmanned aircraft to size up catastrophe claims.
Insurers have been testing drones and using them on a small scale since getting Federal Aviation Administration approval in 2015 to use the technology for U.S. inspections. Drones provide aerial images that can help insurance adjusters inspect buildings faster and more safely, executives say, part of a larger industry effort to speed up time-consuming claims.
The storm presents the first opportunity for some of these insurers to test their new fleets on a large scale. Harvey, which made landfall in Texas last week and moved to Louisiana on Wednesday, is estimated to have caused up to $20 billion in insurable damage.
Travelers Cos., a large commercial and personal-property insurer, has about 24 drones ready to be used in Texas and about 200 Travelers employees certified by the FAA as drone pilots, according to a spokesman.
Allstate Corp. expects to make hundreds of flights a day and thousands a week with drones that it uses on a contract basis, according to a spokesman. It already routinely uses drones to settle claims in Texas and three other states.
Farmers Insurance, one of the top homeowners’ insurers in Texas, has seven drones available for use in Texas and 14 adjusters who are trained to use them. Adjusters using drones can inspect three homes an hour, while an inspector without a drone could take more than an hour to climb onto a badly damaged roof and inspect it, according to Jarrod Murrieta, head of claims catastrophe response at Farmers.
“We are pretty confident” that the adjusters can make accurate estimates based on photos, Mr. Murrieta said. The company has received more than 14,000 claims reports as of midday Wednesday, a spokesman said.

There are potential complications to the use of so many drones at one time after a storm. The FAA has temporarily restricted flights of all types, with exceptions, over most of Houston, meaning operators have to get federal approvals to fly.
Federal regulations also prohibit drones from being flown too close to airports, and insurers can only fly over a home with permission, preventing the companies from filming over a widespread area.
To be sure, insurance adjusters will still be climbing on thousands of roofs to inspect damage in person. State Farm, the largest homeowners’ and personal car insurer in Texas, isn’t currently using drones in its Harvey claims handling, a spokeswoman said.
“Our claims adjusters will likely need to inspect both the interior and exterior of the home to assess coverage and damages,” she said. “For this situation, we find that the best way to service our customers and evaluate coverage and damages is through on-the-ground claims handling.”
Other insurers want to evaluate the situation further before they commit their fleets. United Services Automobile Association, or USAA, had 10,000 claims as of Tuesday from various places hit by Harvey, but it hasn’t yet made the decision to use 12 of its own drones and additional ones under contract.
It had adjusters in Corpus Christi, Texas, on Tuesday assessing the situation. “We’re trying to survey what type of damage is there to know whether or not we need to deploy the drones,” spokeswoman Rebekah Nelson said.
San Antonio-based USAA used drones to assess damage in April after a heavy hailstorm in its home city. “We are still in the infancy stage of using our drones,” Ms. Nelson said. The test showed “we were able to…get to our members faster.”
Most of the wind damage from Harvey is in Rockport, Texas, and the surrounding region, where the hurricane first made landfall Friday, according to catastrophe modeling firm AIR Worldwide. That may be where private-sector home insurers report the highest losses. The damage in the Houston area, northeast of Rockport, has been caused more by flooding, which largely isn’t covered by private insurance. The federal government’s National Flood Insurance Program writes the vast majority of residential flood insurance in the U.S.
Private-sector commercial property insurance does often cover flooding, and claims costs for those insurers are expected to total billions of dollars in the Houston area.
Chubb Ltd. , a big business insurer that also specializes in insuring expensive homes and other property of wealthy people, will mostly use drones for commercial property or to reach areas that are inaccessible, like barrier islands, said Fran O’Brien, who heads the company’s high-net-worth business.
“If technology is the way to give good service, we will do that,” she said. “If it can be done through human adjusters with lots and lots of experience with these kinds of claims, we will” go that route.