Underwriting a new homeowner’s insurance policy or renewing someone’s existing coverage has traditionally included a boots on the ground property inspection to verify the current condition of a property. But with the great strides being made in the area of insurance inspection technology over the past several years, things are changing.
Where it was once necessary for an in-person inspection to verify that a property was being properly maintained or to determine if any significant repairs were required, new developments in inspection technology have made other alternatives possible.
A New Tool for an Established Process
While advancements in technology have affected just about every part of our lives, they have had no less of an effect on the insurance business. Smart phones have been called one of the most important inventions of the 20th century and they’re playing a big part in the insurance industry. A few things they bring to the industry include:
- Smartphones are ideal communication devices for use in the field when conducting property inspections. Your policyholders can also use them to take photos and videos when participating in the self-inspection process if authorized by your company.
- Drivers involved in an auto accident can use their smartphones to document injuries and/or vehicle damage at the scene. They can also be used to document licenses and registrations of others involved in the incident.
- Coupled with unmanned aerial vehicles (UAVs), or drones, smartphones can be used for taking photos or videos of parts of a property that would otherwise be more difficult to view. This includes rooftops that used to require an actual in-person physical inspection and exterior portions of high-rise buildings that have always been very difficult to inspect.
- Smartphones used in conjunction with the Internet and specialized inspection software make possible quick and cost effective reporting of property inspection results from the field. This precludes the need for your property inspector to go back to the office to transfer traditional pencil and paper reports to the computer for forwarding to you, the underwriter.
- As an underwriter, a smart phone in the hands of your property inspector can allow you to participate on a virtual tour of a property in real time. This allows for instant feedback between you and your property inspector.
Unmanned Aerial Vehicles (UAVs), Also Called Drones
Once considered cutting edge insurance inspection technology, drones are quickly becoming mainstream in the insurance industry. They’re being used during property inspections in making risk assessments as well as in claims processing. Commercial and residential insurers have been avid adopters of drone technology and these devices are changing the way property inspections are being done. Here are some of the benefits being provided by this increasingly popular inspection technology:
- Improved Efficiency – with the number of claims increasing and the availability of claims adjusters decreasing, drones are being used to cover large areas of property, thereby reducing the need for adjusters and speeding up the claims settling process.
- Faster Claims Determination – insurance inspection drones with infrared cameras make the complicated and time-consuming process of detecting potential air and water leaks in buildings both easier and quicker. This cuts the time needed for claims resolutions, saving money for the insurer and making for happier clients.
- Increased Safety – climbing a ladder up to a roof can be dangerous, especially if the roof is slippery wet or icy. Operating in certain areas after an earthquake, fire or flood can also pose dangers. These risks can be alleviated through drone use. Getting photographs or videos of the exterior of multi-story buildings is also much quicker and easier when using a camera-mounted drone.
- Improved Accuracy – taking videos and photos with a drone, either for property inspections or claims purposes, allows the inspector or adjuster to get in close without disturbing the scene. Photos and video can then be easily integrated into the report being submitted.
- Unsupervised Backyard Inspections – in residential locations where backyards are fenced and gates are locked, drones are capable of enabling inspections without an individual needing to be on-site to allow access. Inspectors can then check for swimming pools, tree houses, trampolines and any other backyard structures.
Types and Levels of Insurance Inspections
The insurance industry has become incredibly competitive and insurers are continually looking for different means of staying profitable during these days of increasing natural disasters such as wildfires, floods, hurricanes and more. One way to protect the bottom line for insurers specializing in homeowner’s insurance coverage is to be more judicious on when insurance inspections are required and what type of inspections should be conducted.
It used to be that the only way insurers could accurately determine the condition of a property was an on-site, boots on the ground inspection. These inspections were instrumental in learning whether a property was being properly maintained, if required repairs were being made, if significant upgrades had been done and if there were any apparent coverage discrepancies.
Many of these properties, as it turned out, had neither maintenance/repair issues nor coverage discrepancies, and the time and money spent on inspections were not an efficient use of resources. This is especially true of newly built structures that have recently gone through all required building inspections. For these properties, a minimal exterior photo inspection may be sufficient to satisfy your underwriting needs. This would include address verification and photos of the structure from all four sides as well as the rooftop. Photos would also be taken of any out-buildings and comments made of any apparent negative conditions of the property.
For some properties, especially those that are occupied only seasonally, a self-inspection may be allowed. One of the available self-inspection apps can be used in conjunction with a smartphone or tablet to take photos or videos of a property, to write a report for submission to an insurer and sent instantly via the Internet. This process streamlines the entire inspection process. Modern inspection technology saves time and money for both the insured and the insurer.
Big Data and Predictive Analytics
Predictive analytics are a popular inspection technology that’s having a huge effect on many businesses, including the insurance business. A recent survey report conducted by Willis Towers Watson shows that the use of predictive analytics is providing businesses with significant increases in sales and profitability and decreases in issue and underwriting expenses.
For you, the insurance underwriter, the pricing and risk selection process is significantly improved with the use of big data and predictive analytics. This is primarily due to a more sophisticated and greater variety of sources for data, both bigger and better. One reason analytic data is getting better is because it’s coming straight from the horse’s mouth – coming from smart devices (including smart phones and smart homes), social media and interactions between insurance claims specialists and their clients.
Improved Insurance Technology
Improved insurance technology is available to all and giving a clear edge to those who embrace it in their insurance underwriting efforts. Insurance Risk Services is plugged into these emerging technologies and ready to go to work for you in helping improve your underwriting results. Call us and avail yourself of our services.