What You Need to Know About Drones and Your Insurance

1
You Don't Need to Spend a Lot of Money to Get Your Drone Insured

Drone Insurance on Home Insurance and Liability
Options for Insuring Your Drone - Is it Covered?. Colin Anderson / Blend Images / Getty Images

Before you spend any more money on your drone, here's an essential reference to help drone owners get the most insurance coverage for the best price.

How Much Does Drone Insurance Cost? How Do I Get My Drone Insured?

Depending on the kind of drone you have and how you use it, you may already have coverage for drone damage insurance and liability through your home insurance policy. We are going to review all the basics you need to know to determine what insurance you may already have and don't know about. We will also look at if you need additional insurance and how to get it for the least cost. We've also got a couple of handy insurance checklists to help you, and some cool resources for you as a drone owner.

Do You Need to Buy Insurance for Your Drone?

Drones have become incredibly popular in the in the past few years. With high-end options such as camera and video recording equipment, the use of drones has exploded for hobbyists and photographers and has become a heavily gifted item for special occasions, or just for fun.

Drone Damage Insurance for Recreational or Hobby Drones

The cost of a drone can range anywhere from $40 to over $2000, so it is no wonder that you might want to know if it would be covered on a residential insurance policy like a homeowner, renter or condo policy.

The good news is that most insurance company policy wordings would cover a drone in the same way that they would cover your personal property or contents. Depending on your specific insurer, you may not have to pay any additional amount to make sure your drone is covered! 

Drone Regulations

In December 2015, FAA introduced the requirement to register your personal use drone. However, since 2015 these regulations have evolved, you may want to check out the FAA Flying for Fun Special Rules for Flying a Model Aircraft guidelines. With regulations, it's normal for people to start to wonder about liability insurance requirements for drones. 

Insurance Drone and UAS Requirements

Although insurance doesn't dictate if you register your drone or not, the use of your drone becomes important to understand if you are covered under a homeowner policy for your drone or not.

"Do I Need to Insure My Drone for Liability?" 

If you are only using your drone for personal use and not business use, there is no current obligation to insure your drone. However, based on the number of accidents that seem to happen with drones, it is recommended you protect yourself with liability insurance and protect your investment with damage insurance. There are several options to insure your drone, quadcopter or "Unmanned Aerial System" (UAS). In each slide of this article, we will cover several low-cost options for personal use drone insurance as well as the conditions and restrictions for each.  We will also cover a few useful resources for new drone owners and experienced owners alike. Ready? Let's check out your options.

Flip through the slides in this article to find the information you are looking for in this comprehensive guide to owning and protecting yourself, your assets, and your drone so you can enjoy your UAS

2
Do I Need Insurance for a Drone? What are the Risks?

Operating a Drone Flying in Public Spaces - Insurance
What are the risks of owning or operating a drone?. LHJB Photography / Moment Open / Getty Images

Although we might think of drones as super cool fun toys, the reality is that drones, sometimes referred to as Unmanned Aerial Vehicles (UAVs) and Unmanned Aerial Systems (UAS) are far more sophisticated than your average "toy". The FAA classifies most of them as aircraft, and depending on how your home insurance is interpreting your use, as well as their comfort level with quadcopters and drones, you may or may not have coverage under the personal liability protection in your homeowner policy. The good news is, as you read on, you'll see that you have a lot of options if your home insurer does not agree to insure the liability of your drone, and it doesn't have to cost you a lot of money.

What is the Cost of Drone, UAS or Quadcopter Insurance?

Before we delve into this, let's look at some examples of cases where the personal use of a drone or quadcopter has resulted in injury. Once you understand the risks, you won't want to take a chance not having coverage, especially if that coverage could be obtained for free or under $100 a year, right?

How Many Drone Accidents Happen?

You may be surprised to know that there are many instances of drone related accidents documented in the US already. Many of them involve accidents when the drone runs out of power, or incidents where the operator lost control of the drone. These are not all situations caused by the reckless operation. Anyone can experience a dangerous situation that could injure people, the property of other people, or cause damage to public property that could result in high costs, medical expenses and personal injury.

Drone Accident Examples: Insurance Can Help  

  • Imagine your drone hits an electric line and puts an entire neighborhood in a black out. The cost of repair to the electric lines, the damages to all the citizens of the area, these are not minor incidents, but they can happen easily.
  • In the UK, one man was flying his drone in what he considered safety, until he lost control and it hit a toddler's eye and sliced it. The medical expenses and damages he could be held liable for are extreme.
  • Picture yourself flying your drone when it suddenly loses power crashing onto your neighbor's roof or car. Your drone is destroyed, and their property has been hit too!  Who pays for all the damages?

Now that we have some examples let's find out where you can get the coverage you need.

3
Does Your Personal Home Insurance Liability Coverage Protect You?

Flying a drone near private property - invasion of privacy
LAS VEGAS, NV - JANUARY 08: A Ghost drone by EHang flies at the 2015 International CES outside the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada. The Ghost can be piloted by a smartphone without a remote control and only needs one click to take off, return and land. CES, the world's largest annual consumer technology trade show, runs through January 9 and is expected to feature 3,600 exhibitors showing off their latest products and services to about 150,000 attendees. (Photo by Ethan Miller/Getty Images). Ethan Miller/Getty Images News/Getty Images

Before you start worrying about your liability insurance, contact your home insurance representative and ask them how the personal liability coverage of your policy covers drones. 

Some companies may not be willing to insure the personal liability arising out of the use and ownership of a drone due to the fact that it is considered an aircraft, however most companies seem to be viewing personal use drones as a hobby aircraft. Although this may change in the future after insurance companies tally losses and incidents arising from claims and damages caused by drones, at present there is a good chance you may have coverage on your residential insurance policy. The only way to be sure, because this is an emerging issue for the insurance industry, is to ask your insurance company how they view the drone in relation to the insurance definitions in your policy.

Concerns With Drones When It Comes Liability

  • Personal Injury
  • Invasion of Privacy Claims
  • Damage to Public or Private Property 
  • Medical Expenses

Not sure what to ask to find out what the extent of insurance coverage on your drone will be with your insurance company? Keep reading, we've got you covered:

All the questions you need to ask your insurance about your drone.

4
Essential Checklist : What to Ask Your Insurance About Your Drone

Consumer asking about drone at trade show
LAS VEGAS, NV - JANUARY 08: Guanglong Zeng (L) of EHang Inc. shows attendees the Skyway drone by EHang at the 2015 International CES at the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada. The Skyway can fly up to three miles high or far and can hold up to 22 pounds, enabling it to carry several cameras at once. The landing gear can fold up in flight to allow an unrestricted 360-degree view for any cameras on board. CES, the world's largest annual consumer technology trade show, runs through January 9 and is expected to feature 3,600 exhibitors showing off their latest products and services to about 150,000 attendees. Ethan Miller/Getty Images News/Getty Images

What Coverage Is Included In Your Home Insurance For Drones?

In the same way you did some research about your drone before you purchased it and asked a lot of questions to make sure you were getting the best drone, you will want to find out all the details on how you are protected by your home insurance, renter insurance or condo insurance for your drone.

Checklist of Questions to Ask Your Insurance Company: Is Your Drone Insured?

What Happens If Your Drone Hits Someone Else's Property?

  • How much are you insured for (liability)?
  • How much is the drone insured for?  
  • Are there any limitations or exclusions?
  • What is the deductible?
  • What is the maximum amount they will pay for damage to the drone itself? (Is there a limit in your insurance policy wording?)
  • Is the coverage for All Risk Coverage, or is it only Named Perils - such as fire, theft and vandalism? If the coverage is only Named Perils, consider requesting a quote for an All Risk policy which will cover you for all risks unless specifically excluded. This provides much broader coverage for your personal belongings and will be an advantage when it comes to owning a drone and getting the best protection.
  • Can you schedule your drone on a special floater or endorsement?

Personal Liability Questions for Drone Owners

5
Do I Need to Tell My Insurance About My New Drone?

Flying your drone does insurance need to know
Do you need to tell your insurance about owning a drone? What's Covered?. Brigitte Blättler/ Moment / Getty Images

It is better to contact your insurance company and let them know about the fact that you have a drone so that you can find out if you are covered or not. The call may be simple and take two minutes. Protecting your assets is worth your time. By calling your insurance, you will have an idea of what is or isn't covered. Use the checklist on the previous slide to make sure you understand all coverages.

Information Checklist If You Have to Call Your Insurance About Your Drone

Before you contact your insurance representative be ready to provide them with the following details which will help them make a decision on whether your drone can be insured under your homeowner, renter or condo policy. In some cases, being able to provide all the information will make it easy for your representative, agent or broker to negotiate the most favorable terms or confirm that your policy covers you.

Is Drone Racing Insured?

Drone racing is turning into a really popular sport, but before you get involved, you might want to call your insurance. It is highly unlikely that racing activity would be covered for your personal use drone. Insurance policies traditionally contain exclusions for competition or racing. 

Insurance for Personal Use or Recreational Drones

Remember, your inquiry may be one of the first your agent or representative gets regarding drones, so the more prepared you are, the easier it will be. Insuring personal use drones is a new area for insurance professionals and they will likely want as much information as possible. Using a checklist like the one below will be the first step in showing them that you are a good risk and get insurance confirmed easily.

Checklist of Information to Provide Your Insurance Regarding Your Drone

  • Where will the drone be used?
  • Will it be used for business or personal use?
  • Will it be used for competition or racing?
  • Who will fly the drone? (They may ask for ages of those who will regularly use the drone).
  • Where it will take off and land from?
  • Flying altitude
  • Value of your drone or UAS, how much you paid for it and receipts if available. (Tip: Ask if they are able to schedule it specifically on your policy so that you don't have to pay a deductible in the event of a loss. Inquire about this option).
  • Make, model and possibly the identification number
  • If you have to register your drone, let your insurer know that your drone is registered, they may want more information. You can check out the requirements to register a drone here if you don't know if you should register your drone. Your insurance will not tell you to do this, this is up to the FAA who sets the guidelines.
  • If you are a member of an organization like the AMA, or any other community like UAV Coach, that encourages safe practices, let them know! It always helps to show an insurance company that you are interested in safety and taking precautions.
  • Do you have any training, have you attended Drone School to learn safe drone practices or do you have a Competency Certification For New Drone Pilots? It's all good to mention.

6
Information and Resources for Drones and Tips for Safe Flying

Parrot MiniDrone - Insurance Options For Drones
LAS VEGAS, NV - JANUARY 08: A Parrot MiniDrone is displayed at the 2015 International CES at the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada. The drone is controlled by a smartphone using Bluetooth and has removable wheels enabling it to roll on floors, walls or ceilings. CES, the world's largest annual consumer technology trade show, runs through January 9 and is expected to feature 3,600 exhibitors showing off their latest products and services to about 150,000 attendees. (Photo by Ethan Miller/Getty Images). Ethan Miller/Getty Images News/Getty Images

Owning a drone can be a lot of fun, and for the most part you will want to take it out for a test flight right away, but experienced drone pilots will tell you to proceed with caution. 

What You Need To Know Before You Fly Your New Drone

First time operators often have incidents and accidents happen. It is recommended to learn to operate your UAS in a safe area, free of people and potential obstructions, structures and power lines. Just because you have operated a UAV or drone before, it doesn't mean that every UAV is the same. Read about what happened to UAV Coach founder Alan Perlman, the first time he took out his new Quadcopter 

"...after about 45 minutes, we went outside to practice. And that’s when I almost killed someone."

Check out the UAV Coach Community

As a result of his experience above, Alan actually started a really cool website and community where you can learn everything you want to know about drones and participate in an active and very informative community. He also has a weekly newsletter that is always full of valuable information. I definitely recommend you check it out.

Download the B4UFLY App

Make sure you are aware of any temporary flight restrictions in your area. I asked the FAA the best way for people to stay up to date with flight restrictions and they recommended that drone and UAS operators download the B4UFLY  as a good resource to help you to identify temporary flight restrictions, no fly-zones and help you figure out where you can operate drones safely and within the law. 

Drone manufacturers also have created an interesting resource for new recreational drone owners “Know Before You Fly” educational website

Drone Schools and Drone Pilot Certification Programs

Even though drones have become popular for consumers only recently, people have been operating drones for a long time. Because of this, there are resources available to help you learn safe drone practices. You can check out this list of Drone Schools or consider a drone training course to get a Competency Certification For New Drone Pilots 

Did you know that you can even get a college Minor in Drone Aviation? At Dowling College, they have started a program towards a 12 credit minor. Although home insurance will not cover commercial or business use drone operation, when you are starting out with your drone on a personal level, taking courses can help you master the art of flying a drone, and eventually lead to a lot of great opportunities in the future. According to the New York Post, there are fewer than 4,000 licensed drone pilots in the U.S. In the future, job opportunities should be high in this field.

7
Understanding Extra Drone Insurance Protection Options

Young man reading wondering is rental insurance worth it
How does renters insurance work and what's covered. MorsaImages/DigitalVision/GettyImages

Membership Associations Provide Drone Insurance at Low Cost With Benefits

While having your drone insured on your home policy "for free" is the most convenient option, you might want to look into other drone insurance coverage options that will give you added value and extra protection.

One of the interesting options for insurance for hobby drone operators, or people who use drones for personal use is membership with the AMA

The AMA membership includes liability coverage and basic damage insurance coverage for your drone, as well as the ability to fly at thousands of AMA chartered club sites. Membership costs vary, however all options are available for under $75 a year. 

What Kind of Insurance Coverage Is Available for Drones?

According to their membership form:

  • $2,500,000 personal liability insurance coverage
  • $25,000 Medical Coverage-AD&D Policy ($10,000 Death Benefit)
  • $1,000 Fire, Theft, and Vandalism coverage

Please note, that there is a stipulation in the AMA insurance contract that this coverage only comes into play when all other insurance is exhausted. It is in addition to any other policies that would pay out in the event of a claim. So, for example, if your homeowner policy provides coverage for any of the above, or if it was your automobile that was damaged, then the claim would go to the primary insurer first, and then the AMA would respond as secondary. You can viewthe AMA insurance contract for full details. 

You should contact them to verify if no underlying insurance coverage is present, for example: if you have no home insurance or liability insurance, how they will pay out the claim.

AMA coverage could be a very inexpensive and reasonable option to protect your investment in your UAS and your personal liability risk.