By Eric P. Harding
It’s late October as I write this column. Due to unseasonably high temperatures here in the mid-Atlantic, the leaves are just beginning to show their autumnal colors. It gets dark early in the evening, yes, but it’s been warm enough for shorts most days. You might think that because it doesn’t feel like fall yet, let alone winter, Christmas would be the furthest thing from my kids’ minds.
You might think.
As it happens, though, my boys have been refining their Christmas lists for Santa for weeks now. (I say “refining,” but perhaps I should say “adding to.” No item has thus far been eliminated from the list.) My younger boy, Wallace, needs Mama’s help with the writing; he wrote “more Duplos” very nicely but “superhero stuff” and “lots of costumes” are beyond the 4-year-old’s capabilities.
His older brother, Elliott, needs no such help. Indeed, his new favorite pastime (aside from plowing through the Harry Potter books) is thinking about his list and what to add to it. In addition to an “atlas of the world (small please?)” and a size 10 cape, he is asking Santa for, and I quote: “Flying drone with camera and is able to make, record and replay videos and has a claw grabber.” (I’ll explain the benefits of the serial comma over winter break.)
I love the specificity of this request. He clearly has a use case in mind—probably collecting evidence of the dastardly criminals at work in our leafy cul-de-sac. (What the “claw grabber” is for, I’m not sure, but I bet Elliott is.)
But, supposing Santa grants this wish—what happens if he loses control of the aircraft and breaks a neighbor’s window? Or if whatever he’s carrying with the claw grabber drops and dents a car? I know we’d be liable for these damages, but would our homeowners’ policy cover them? Or should we get some supplemental coverage specifically to cover the drone flight and associated liability?
That’s the topic of our cover story, “Wild Blue Yonder” (page 16). Drone use is on the rise nationwide, and the insurance world is taking notice. While most recreational flyers don’t carry drone-specific coverage—though it’s an open question of whether they should—most commercial pilots do see the benefit of protecting themselves against losses incurred while flying. It’s a small market at the moment, but with more widespread commercial applications likely in the coming years—and with insurance heavyweights entering the space—it’s a niche worth watching.
Christmas morning (and the attendant frenzy of wrapping paper, primary-colored plastic, and AA batteries) is a highlight of the year for our family. It reminds me of what’s important in life. But in the back of my mind, I’ll likely be thinking about a work project that’s awaiting me in the office, or wondering when I can convene my next board games night with friends. Finding time for everything that’s important—family, work, hobbies—can sometimes be a struggle. In “The Balancing Act” (page 24), author Jason Sears offers his thoughts on the age-old conundrum. His philosophy on this subject may surprise you.
One gift I hope to receive this year is a smartwatch. With such a device I’ll be able to count daily steps, measure my heart rate, and record my sleep patterns. I imagine that being aware of these data points will allow me to “gamify” my physical activity level. But could our always-connected environment also help mitigate against insurance fraud? In our third feature this month, “The Death of Moral Hazard?” (page 28), author Srivathsan Karanal Margan imagines such a world. We’re nearing the point, he posits, that insurers will be able to offer lower premiums if the insured agrees to allow continuous monitoring via smartphone or other device (and in fact, telematics are already in place in some auto policies). And in an interconnected insurance world, moral hazard may become a thing of the past.
I hope you enjoy this issue—and that you and yours get everything on your holiday list.