Personal Insurance, Business Insurance

Drones and Insurance 101

drone insurance

The idea of an unmanned aerial vehicle (UAV), or drone, is not a new one. You war history buffs probably already know that Britain and the U.S. developed the earliest “drones” during World War I.

Though they were never formally used in WWI, the military sector continued to improve drone technology.

Fast forward over 100 years later, and drones have evolved into something much greater than they ever were initially. In 2013, the world’s hobbyists turned their eyes to the drone after Amazon announced they would begin using drones for automatic delivery.

Drones have proven to be a delight for both personal and commercial users. Honestly, who doesn’t love seeing the stunning results of drone photography? It provides an intimate, birds-eye glimpse into human existence.

Human existentialism aside, while drones are incredibly enjoyable, they can also run a pretty penny. Which brings up the question, how do you insure a drone? Luckily, we have the answers!

Are drones covered by home insurance?

Whether your homeowners insurance covers your drone depends on how you use it. If you’re a casual hobbyist and use it recreationally at least 90% of the time, your homeowners insurance policy would likely cover it because it would be classified as a model or hobby aircraft.

Not only would your home insurance cover the drone itself, but it would give you some liability protection as well. In this case, the drone liability coverage would help cover:

  • Medical bills: Say you briefly lose control of your drone, and it accidentally hits your neighbor, Mr. Doe, in the face. If Mr. Doe needs to seek medical attention, your drone insurance will help cover his bill.
  • Legal expenses: Unfortunately, Mr. Doe decided to sue you after the drone incident. Once again, your homeowners liability coverage can step in and help cover legal fees associated with litigation.
  • Property damage: One day, your child decided to take the drone for a spin without supervision. Long story short, your other neighbor, Ms. Smith, now needs to replace her satellite dish and her birdbath. You can help cover the cost with the liability portion of your homeowners insurance.
  • Invasion of Privacy: As you were flying your drone one afternoon, you accidentally captured an image of Mr. Doe in his backyard. We won’t give details. Needless to say, Mr. Doe is very unhappy, and you’ve been hit by a streak of bad luck. Once again, you face litigation, and your homeowners liability insurance helps save the day. Again. Remember, you will not be covered for intentional invasions of privacy.

On the other hand, if you use your drone for business purposes a good chunk of the time, chances are your homeowners insurance won’t cover it. Even if there is a cargo attachment there could be a possibility that it won’t be covered.

How much does my homeowners insurance cover?

Like any personal property covered by your homeowners insurance, your drone will be covered up to the limit of your personal property coverage, subject to a deductible.

That being said, if you have a mid-to-professional grade drone, keep in mind your insurer may have special limits for high-value items (like drones).

Do I need commercial drone insurance?

If your business’s operations rely on your drone, seriously consider purchasing a drone insurance policy. Not only does it protect you against damages and litigation, but it also provides a sense of credibility when you can show proof of insurance to your clients.

Drone insurance, also known as Unmanned Aerial Vehicle (UAV) insurance, may not work for everyone. For example, if you have a hobbyist or beginner’s drone worth less than $500, you don’t need a policy covering $100,000 plus.

Another consideration you should keep in mind is your city’s or municipality’s drone laws. Some regions require you to maintain a drone liability insurance policy, regardless of how you use your drone.

What does commercial drone insurance cover?

There are two major portions to a commercial drone insurance policy: drone liability coverage and hull coverage.

  • Drone Liability Insurance: Protects you against third-party damage or injury claims.
  • Hull Coverage: Insures the drone itself and is sometimes available directly through the manufacturer.

Aside from these two primary coverages, there are smaller and more specific ones you can opt for based on your needs.

  • Payload Insurance: Covers expensive equipment attached directly to the drone. Equipment such as a thermal, cinematography, or multispectral camera, or a gimbal system.
  • Ground Equipment: The equipment used to operate your commercial drone can be as important as the drone itself. You can protect ground equipment like laptops, tablets, cases, remote controls, etc.

How much does drone insurance cost?

There’re endless amounts of variation in commercial drone insurance premiums. To (over)simplify it, you’ll pay for what you need.

For example, you can buy drone coverage on a very short-term basis — think daily, even hourly. Or a traditional insurance policy with a monthly premium may better fit your needs. As we mentioned above, your drone insurance depends on how you’re using the drone.

Aside from the duration of your policy, other factors will affect your drone insurance cost.

  • Your level of training. Have you completed a pilot training course?
  • Your drone safety record. Have you been in any drone-caused accidents?
  • The equipment and drone you’re insuring.
  • Flight and maintenance records. Detailed records of each flight, maintenance event, and battery cycle go a long way towards establishing yourself as a responsible and competent drone operator.
  • The industry you use the drone for. Is it real estate? Surveying? Photography?
  • Your location.
  • How often you’ve filed claims in the past. By filing small but frequent claims, you can drive your premium up.

To learn more about drone insurance coverage and tailor a policy specific to your needs, contact your local Leavitt Group insurance agent.

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