Erie Insurance Receives FAA Approval to Use Drones in Claims, Underwriting

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Erie Insurance announced Wednesday that it received conditional approval from the Federal Aviation Administration (FAA) to use the unmanned aircraft system (UAS) — commonly referred to as drones — in the company’s claims and underwriting processes.

The FAA approval allows the Erie, Pennsylvania-based insurer to operate the UAS to conduct research and development at the company’s own facilities and property; surveys and inspections; and risk assessment, risk management, loss prevention, and underwriting. Erie filed a petition with the FAA on Nov. 14, 2014, seeking permission for commercial operations of small unmanned aircraft.

Erie Insurance said the company will be using two drones it currently has for claims and underwriting. “We’ll be using the two drones we have for claims and for underwriting rather than simply research. We hope to be able to start using them in the next few months,” Erie Insurance spokesperson Leah Knapp said. Erie’s plan includes using the UAS to help assess storm damage in hard-to-reach areas.

Erie has requested, and received, permission to use DJI Phantom 2 Vision Plus that would weigh less than 55 pounds including payload. It measures approximately 13.8 inches diagonally. (Operations of any other aircraft will require a new petition or a petition to amend the current approval.)

“At ERIE, we see drones as high tech meets human touch,” Gary Sullivan, vice president of property and subrogation claims at Erie Insurance, said in a statement.

“”Drones will help our claims adjusters get an early look at potential damage without putting themselves in harm’s way due to unsafe conditions, such as on a steep roof or at the site of a fire or natural disaster,” Sullivan said.

Sullivan added, “The sooner we can get in and assess damage, the sooner we can settle claims and help make our customers whole again so they can move on with their lives. We’re proud to be one of the first insurance companies at the forefront of this next chapter in claims innovation.”

The FAA’s approval extends until April 30, 2017, unless it gets superseded or rescinded earlier. The FAA is currently in the process of finalizing a formal set of commercial drone rules that it proposed in February. The process is expected to take at least a year. Until the rules are finalized, the FAA will still need to grant exemptions for the commercial use of drones, including by insurers.

The approval is described as conditional since the insurer will be required to adhere to a list of conditions and limitations laid out by the FAA. The conditions and limitations include the following:

The unmanned aircraft may not be operated at a speed exceeding 87 knots (100 miles per hour).
The unmanned aircraft must be operated at an altitude of no more than 400 feet above ground level. It must be operated within visual line of sight of the pilot in command at all times. This requires the pilot to be able to use human vision unaided by any device other than corrective lenses.
All operations must also utilize a visual observer. The unmanned aircraft must be operated within the visual line of sight of the pilot in command and visual observer at all times. The visual observer may be used to satisfy the visual line of sight requirement as long as the pilot always maintains visual line of sight capability.
Prior to each flight, the pilot in command must conduct a pre-flight inspection and determine the unmanned aircraft is in a condition for safe flight.
The pilot in command must hold either an airline transport, commercial, private, recreational, or sport pilot certificate. The pilot in command must also hold a current FAA airman medical certificate or a valid U.S. driver’s license issued by a state, the District of Columbia, Puerto Rico, a territory, a possession, or the federal government.
The pilot in command must also meet the flight review requirements specified in 14 CFR § 61.56 in an aircraft in which the pilot is rated on his or her pilot certificate.
The unmanned aircraft system operations may not be conducted during night, as defined in 14 CFR § 1.1. All operations must be conducted under visual meteorological conditions. Flights under special visual flight rules are not authorized.
The unmanned aircraft may not operate within 5 nautical miles of an airport reference point (ARP). The unmanned aircraft may not be operated less than 500 feet below or less than 2,000 feet horizontally from a cloud or when visibility is less than 3 statute miles from the pilot in command.
All flight operations must be conducted at least 500 feet from all nonparticipating persons, vessels, vehicles, and structures unless: barriers or structures are present that sufficiently protect nonparticipating persons from the unmanned aircraft and/or debris in the event of an accident.
The company must ensure that nonparticipating persons remain under such protection. If nonparticipating persons leave such protection and are within 500 feet of the unmanned aircraft, flight operations must cease immediately.
The condition for conducting flight at least 500 feet from all nonparticipating vessels, vehicles, and structures may be exempted if the owner/controller of any vessels, vehicles or structures has granted permission for operating closer to those objects and the pilot in command has made a safety assessment of the risk of operating closer to those objects and determined that it does not present an undue hazard.
Air Traffic Organization (ATO) Certificate of Waiver or Authorization (COA) — All operations shall be conducted in accordance with an ATO-issued COA.
Any incident, accident, or flight operation that transgresses the lateral or vertical boundaries of the operational area as defined by the applicable COA must be reported to the FAA’s UAS Integration Office (AFS-80) within 24 hours. Accidents must be reported to the National Transportation Safety Board (NTSB).