Drones and insurance

Drone owners should make insurance part of their pre-flight check

This year, sales of drones are expected to reach new heights, according to the Federal Aviation Administration (FAA). Piloting a drone might sound like child's play, but before you take flight, be sure to contact your insurance professional.

 

Recently, the FAA has mandated registration for most drones and has issued guidelines on their use. But what happens in the event of unplanned equipment failure, or pilot error? (After all, most drone and model aircraft operators start out with little or no aviation experience.) Also, with some models tipping the scales at up to 55 pounds, rogue drones can pose a significant threat to people and property, which is why it’s always a smart call to add insurance to your pre-flight checklist.

 

Below are insurance coverages and how they are likely to apply. Keep in mind all claims are handled on a case-by-case basis, and there may be more exclusions and conditions that apply as drone technology evolves. Finally, don’t expect coverage if you’re operating your drone in the commission of illegal activities.

 

Homeowners and renters insurance

Drones are most likely covered under a homeowners insurance policy (subject to a deductible). Coverage also applies to renters insurance. According to the latest I.I.I. PulsePoints survey, only 40 percent of renters in the United States have this coverage, so it’s imperative that people who rent purchase this coverage before operating a drone, as their landlord’s insurance policy will not protect them.

 

Liability

The liability portion of your homeowners or renters policy may cover you against lawsuits for bodily injury or property damage that you or family members cause to other people with a drone. It may also cover privacy issues–for example if your drone inadvertently takes pictures or videotapes a neighbor who then sues you. It will not cover any intentional invasion of privacy.

 

No-fault medical coverage

Your policy may provide no-fault medical coverage if a friend or neighbor is accidentally injured by your drone. (Coverage levels vary, so check with your Insurance Professional.) But be aware that this coverage will not pay medical bills for your family members or pets if they are injured by your drone.

 

Theft or loss of a drone

While inexpensive drones are seemingly everywhere, the cost of more elaborate ones with UHD video recording, GPS navigation, etc., can be sky-high--in some cases, more than $2,000, That's why it’s important to review your policy or talk to your Insurance Professional to determine if your coverage is sufficient to replace the drone if it is stolen. (A deductible may also apply.)

 

Auto insurance

If your drone crash-lands into your car, damage may be covered under your auto insurance if you purchased optional comprehensive insurance. (Comprehensive insurance covers damage to a car from fallen objects and other disasters, subject to a deductible).

 

Commercial insurance

Not covered by a standard homeowners or renter’s insurance policy: damage or injuries caused by a drone used for commercial (i.e., business) purposes. If you are operating a drone for commercial purposes, contact your insurance broker to make sure that you have the appropriate types and amounts of insurance coverage.

 

Sure, the sky’s the limit for drone operators (well, below 400 feet); however, anyone operating a recreational drone without the right insurance risks exposing themselves to unlimited personal liability.

 

Additional resources

The Federal Aviation Administration has more information on drone regulations and registration information.

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