The Untapped Potential of Consumer Drone Insurance

Drones have been a part of the public consciousness ever since the U.S. military began using them for surveillance and air strikes. In more recent years, drones (technically termed Unmanned Aerial Systems, or UAS) have evolved beyond military usage and have found their way into the hands of civilian consumers. While the civilian drone market was initially slow to grow, the market is now exploding thanks to recent advancements that increase ease-of-use as well as lower prices. Close to 700,000 drones were registered with the FAA in 2016.

For under $1000 USD, a consumer drone is capable of 40mph flight, has a max altitude of 16,000 feet and has a flight range of up to 8 miles away from its controller. The newest models have multiple systems to prevent accidents, including GPS assisted flight and auto return-to-home functions. Nonetheless, accidents can and do occur, which is a cause for concern whenever an object falls out of the sky. While most drone operators control their craft in a safe manner, there are exceptions. One drone pilot is facing up to a year in jail and thousands in fines after he lost control of his drone, knocking a woman unconscious. Yet another is looking at reckless endangerment charges after he crashed his drone into the Seattle Space Needle.

Issues like this raise questions of liability. While it is not yet mandatory for drone operators in the U.S. to have insurance coverage, it is nonetheless a topic of great interest in the drone community, both in terms of coverage for the drone itself as well as liability in the event of an accident.

Drone insurance can broadly be divided into two categories: Commercial and personal. Drones have been used commercially in a number of ways, including but not limited to: real estate photography, Search and Rescue, Law Enforcement and Agriculture. For those using drones commercially, it is important to note that many homeowner/rental policies will only cover drones used recreationally. A good commercial drone policy should cover the drone itself, as well as liability coverage.

Options for personal drone usage are much more limited. I recently purchased a drone for personal use, and was very interested in finding insurance coverage for it. I discovered that many agencies do not yet offer insurance for personal drone use. They can be covered under a standard homeowner or rental policy, but oftentimes the deductible on these policies renders filing a claim pointless. However, thanks to the internet I was able to find drone coverage under one agency: State Farm. State Farm offers drone coverage under a Personal Articles Policy. The cost varies by location (and is entirely unavailable in California), and not all State Farm agents are even aware that drone coverage is offered in this manner. Generally, the cost for coverage through State Farm is $60 for one year, with no deductible, and does not require the insured to have any other policies with State Farm. The policy covers essentially anything that could happen to the drone, including crashes, water damage and fly-aways (where the drone loses connection to its controller, and literally flies off, never to be seen again). The one drawback to State Farm’s Personal Articles Policy is that it offers no liability. However, this will likely be covered through the insured’s homeowner’s or renter’s insurance.

Not long after purchasing the drone, and not long after getting it insured, I also had the misfortune of filing a claim. I was flying the drone in a river valley, taking some video, when the drone lost contact with the remote controller. The drone is designed to return to its launch point when this happens, but due to poor signal it didn’t do so. Naturally, the experience of losing a new, expensive toy was pretty devastating. But, I called my State Farm Agent the following day. Two hours later, a check was in the mail for the full cost of the drone.

There is a great deal of untapped potential revenue in the drone world, particularly regarding personal drone use. There are a substantial number of people looking for the peace of mind an insurance policy can bring.

Home, Smart Home

Any fan of science fiction is at least familiar with the idea of a home with smart capabilities. This includes, but is not limited to, controlling music, reporting weather and traffic, checking news updates, adjusting lights and HVAC, and answering general questions. In the past decade, numerous companies have entered the smart home marketplace, and have attacked the same issue with varying solutions. Google calls it the Google Home and Amazon calls it the Amazon echo, to name the two largest contenders; but no matter what you call it, they all serve essentially the same purpose – to ease and automate the control of your home’s functions. It is clear the direction that these behemoth consumer electronics suppliers are headed.

The most obvious key element to a useful smart home controller is its form and basic functionality. Firstly, consumers will only want the device installed in their house if it has a sleek look. If the device itself is too bulky, too ugly, or otherwise off-putting to the senses, it will likely fail to hit the market on those grounds alone. The other bare essential is basic functionality in areas that do not require heavy integration. It is understood that, for some of the more advanced functions of a smart home, there will be some degree of learning curve required for those functions to work flawlessly. However, the end-user expects that certain functions should work with no resistance at all. A good example of this is reporting the weather. All these smart home devices are geographically aware, and so long as there is an Internet connection, the smart home can report the weather with no difficulty. Without basic usability like this, there is no value for most of the consumer pool.

Beyond the bare minimum are integration services, which often drive the decision for which smart home system to choose. Generally, a home system composed purely of one company (as opposed to a hybrid system) works much better. For example, it would not make sense to fill half of your house with the Amazon Echo and the other half with the Google Home because the two halves of the system would not work with each other. Similarly, it is best to make use of the integration services of whichever smart home you choose. If you use the Amazon Echo, you will achieve best results by using Amazon music streaming rather than some other music streaming service. In some scenarios, cross-platform integration can work, but it is certainly less effective than keeping a pure smart home system. For this reason, an attractive smart home system not only generates revenue of its own, it also helps to drive sales of the integration services it offers. Amazon is at a particular advantage in its foray into the smart home marketplace because it is already the industry leader for Internet retail. With an Amazon-pure smart home, Amazon’s store front is always at the consumer’s fingertips. It is already possible to order products from Amazon using voice commands only, and Amazon continues to improve its online shopping experience. It is in their best interest to make shopping online as convenient as possible for the consumer, and no other company is quite as well-positioned to do so as Amazon.

Deciding which smart home is right for you depends heavily on your requirements and whether you’ve already subscribed to any integration service. If you already use Google for video and music streaming, audiobooks, and email, your decision may already be made for you – use Google! Basic functions do not vary much from device to device, but the customer experience does vary, so it’s best to do your research first. It would take a lot of time, effort, and money to switch smart home platforms if you’ve already become somewhat immersed in another platform. Do your homework! Here are a couple of places to start your search for the right smart home.

Best Smart Home Devices of 2017: https://www.cnet.com/topics/smart-home/best-smart-home-devices/

Home Automation Accessories: http://www.consumerreports.org/cro/magazine/2014/06/run-your-home-from-your-phone/index.htm

Agency Management System Optimization

Your agency management system is at the heart of your business, tracking and organizing all of the operations and tasks completed by your staff on a daily basis. Because of this, it’s important to review and subsequently “tune-up” periodically to ensure that your management system continues to promote top efficiency.

Don’t Ignore Software Updates

In today’s busy world, it’s easy to ignore software updates and continue working with the version you are accustom to. However, it is important to at least find out what Applied is changing. Many updates translate to improvements in efficiency. This is an excellent opportunity to determine if your original procedures are still effective. With Applied Epic, if the update ends with a number that has a decimal (example: MU 2.1), then it’s a minor update (maybe some patches installed, some errors corrected, or a few additions). If the update ends in a zero or with a year (Epic 2017), it’s a major update (functionality may have changed, a module may have been added). Read the update’s release notes and see if this changes your procedures or requires fine-tuning of a workflow. A “Best Practice” to strive for is re-evaluating your management system after every major software update. The “Realistic Practice” would be to look at your management system configuration every few years.

Clean up Your Data

A leaner, streamlined management system allows your staff to work more efficiently. For example, a client is easier to find when you don’t have to page through all the inactive or lost clients. (Producers – I just found your prospect pipeline!) Less choices in activity codes will lead to quicker decisions. Think of the time savings from scrolling down the list of current carriers versus the carriers that you brought over at conversion. Do you meet the minimum volume for profit sharing with these carriers? Can you move these policies to carriers that you do receive profit sharing from? How many carriers do you have 1-5 policies with? How many policies with excess and surplus lines brokers can be moved to a standard market (there’s an easy 5% commission) or to a program for better coverage?

If your agency just migrated to a new agency management system, you may think that none of this applies to you. Unfortunately it still does if you want to get the most out of your management system. For those agencies that recently migrated to Applied Epic, Applied recommends that you do “optimization” 4-6 months after activation. The purpose is to check that the initial “Configuration” set up is working as planned. You may find that what you thought would work in theory isn’t working in reality. (Who knew that adding a policy opened 3 activity codes that no one is using?). Now that your staff has actually used the system on a daily basis, they may had found faster or better ways to process work. Do you have too many activities popping open? If the activity is not used to document, to follow up, or to track on a report, do you really need it?

There are specific areas within your management system that you should re-assess. You can do this by running a current book of business report on policies in force and see if you can consolidate or inactivate:

Companies
Brokers
Vendors
Employees
Activity Codes
Policy Codes
Unsuccessful Reasons
Transaction Codes
Agency Defined Categories/Conglomerates
Sticky Notes
Attachment Descriptions
Attachment Folders
Template Letters
Proposals
Summary of Insurance
Download Set up (New companies and policy types may need to be added.)
Real Time Set Up

So take the time to optimize your agency management system. Each choice or each click that you can eliminate will save your staff minutes per day. Multiply that by the number of employees and the number of work days each year. You just freed up some time to work on strategic matters and revenue generating activities. After all, isn’t time money?

4 Cutting-Edge Technologies Within Your Grasp

It’s fascinating to look back to what people of the past predicted our technology would look like today, and even more so when we see their truly fantastical ideas become a reality. This also allows us to anticipate what will someday be the norm in business technology.

Here’s four technologies that we’re looking forward to seeing more of.

Spread of Virtual Reality

This technology has recently seen great improvements, and so it shouldn’t be long before it becomes a staple in day-to-day activities. The sophisticated software that powers the immersive environments users experience is in the running to be as impactful as the personal desktop computer. Facebook even dropped a cool $2 billion to pick up Oculus in 2014, and today the headset is available for $499 at major technology retailers.

Plus, despite the dismissive attitude many held towards the initially video gaming-oriented technology, a lot of effort has gone into brainstorming new and innovative uses that a workplace could have for VR.

Interaction through Ambient Proximity

The use of beacon technology now allows smartphone users an increased ability to interact with their surroundings, proving that the Internet of Things shows continued promise in the future. These beacons allow two nearby devices to share information via their connection to each other, allowing PayPal and Apple to simplify their mobile payment processes.

Additionally, other retailers are using these beacons to collect data on in-store customer behaviors–Under Armor being a prominent example.

Welcome to the Drone Zone

Many major companies have begun to experiment with the use of drones. Facebook, for one, has plans to try expanding the reach of Internet connectivity with solar-powered drones, and both Amazon and Google are working towards making delivery-drones a reality.

Other companies are adding their innovations to the technology as well: Finnish startup Shaper Shape have made drones capable of independently making decisions through their programming. Drones like these will have the capability to essentially “learn” about their surroundings and identify objects from above.

Improved Social Payments

One of the most irksome parts of lunch meetings are when the time comes to pay the bill. However, that irksomeness will soon be a thing of the past, as socially-focused mobile apps, like the PayPal-powered Venmo and Square’s Cash, are swiftly becoming self-contained social networks. Meanwhile, major social networks like Facebook, Twitter, and Snapchat are working to integrate mobile payments into their offerings as well.

Are any of these technologies more exciting to you than the others? What are some other examples of near-future tech that you can’t wait to make use of? Tell us what you think in the comments section!