What You Need to Know About Drones and Your Insurance

You Don't Need to Spend a Lot of Money to Get Your 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. This is a review of all the basics you need to know to determine what insurance you may already have and don't know about.

Do You Need to Buy Insurance for Your Drone?

Drones aren't just popular with one type of user. Some hobbyists use cheap drones for fun, while professional photographers may make use of camera equipment on high-end drones. Depending on the model, drones can cost anywhere from $40 to over $2,000.

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 cover your drone.

Drone Regulations

In December 2015, the FAA introduced the requirement to register your personal-use drone. However, since this is a new area for regulators, it's best to check with the FAA's guidelines to make sure you're up-to-date.

Insurance for Drones and UAS Requirements

Although insurance doesn't dictate whether you register your drone or not, the use of your drone and how it's regulated could impact how it's covered by a homeowner's policy.

If you are only using your drone for personal use and not business use, there most likely isn't an obligation to insure it. However, accidents do happen with drones, and you may want to protect yourself with liability insurance and damage insurance.

What Are the Risks That Would Necessitate Insurance?

Although many people think of drones as fun toys, the reality is that drones, sometimes referred to as unmanned aerial vehicles (UAVs) and unmanned aircraft systems (UAS) are far more sophisticated than your average "toy." The FAA classifies most drones as aircraft.

Depending on how your home insurance provider feels about drones and interprets your use, you may or may not have coverage under the personal liability protection in your homeowner policy. If your home insurer does not agree to insure the liability for your drone, there are other, fairly low-cost options.

How Many Drone Accidents Happen?

Drone-related accidents are already well-documented in the U.S. Many of them involve scenarios where the operator loses control, or the drone unexpectedly runs out of power. These are not all situations caused by reckless operation. Anyone can experience an accident that injures people or damages property, potentially resulting in personal injury and medical expenses.

Drone Accident Examples: Insurance Can Help  

It isn't hard to imagine how insurance could come in handy for a drone operator. For example:

• Suppose your drone were to hit an electric line and put an entire neighborhood in a blackout. The repair cost to the electric lines and the damages to everyone who lost power would not be minor incidents. You could be held financially responsible.
• In the UK, one man was flying his drone safely until he lost control and it hit a toddler's eye and sliced it. This unfortunate accident could easily result in massive costs, including medical bills.
• Now imagine that you're flying your drone when it suddenly loses power. It plummets, crashing into your neighbor's roof or car. Your drone is destroyed, and their property is damaged, too.

Does Your Personal Home Insurance Liability Coverage Protect You?

Before you start worrying about 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, because it is considered an aircraft.

While the situation is fluid and subject to rapid change, there is a good chance that your residential insurance policy may cover claims and damages caused by drones. The only way to be sure is to ask your insurance company how it views the drone concerning the insurance definitions in your policy.

Essential Checklist : What to Ask Your Insurance About Your Drone

You should ask whether your insurance covers you for liability related to personal injury, invasion of privacy claims, property damage, and medical expenses stemming from drone use.

Personal Liability Questions for Drone Owners

Is damage to your property covered if you damage it with your drone? If your drone crashes into your garage or damages one of your additional structures, would your insurance cover that? To better understand your coverage, ask questions like:

• What is the liability limit?
• Can you purchase umbrella insurance to obtain more coverage, or can you get a higher liability limit? 
• What are the exclusions for liability coverage?

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

Coverage for your property is one thing, but it's also important to know what your insurance will cover for damage to other people's property. Here are the questions you should ask:

• 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 your insurance provider 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 for named perils, consider requesting a quote for an all-risk policy, which covers you for all risks that aren't specifically excluded. This provides much broader coverage for your personal belongings.
• Can you schedule your drone on a special floater or endorsement?

Is Drone Racing Insured?

Drone racing is a popular way to use drones, but before you get involved, you might want to call your insurance provider. It is highly unlikely that racing activity would be covered for your personal-use drone. Insurance policies typically contain exclusions for competition or racing.

What Do I Need to Tell My Insurance Provider About My New Drone?

While it may or may not be legally required, it is best to contact your insurance company about your drone. That way, you can easily find out whether you are covered or not.

Information Checklist for Calling Your Insurance About Your Drone

Before you contact your insurance representative, be ready to provide them with the following details to help them decide whether your drone can be insured under your homeowner, renter, or condo policy.

Insurance for Personal Use or Recreational Drones

Since they weren't regulated until 2015, insurance professionals may lack experience in personal-use drones. If that's the case, they will likely want as much information as possible before answering questions. Prepare yourself by having an answer ready for these questions:

• 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, and how old are they?
• Where will it take off and land?
• What is the flying altitude?
• How much did you pay for your drone, and do you have receipts? Ask if they can schedule it specifically on your policy so that you don't have to pay a deductible in the event of a loss.
• What are the drone's make, model, and identification number?
• Is your drone registered? Does it need to be? You can check out the requirements to register a drone on the FAA's website if you don't know the answers to these questions.
• Are you a member of an organization, like the AMA or UAV Coach, that encourages safe practices? Your insurance company may not ask this question, but you should let them know because it shows that you are interested in safety and take 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?

Information and Resources for Drones and Tips for Safe Flying

Owning a drone can be a lot of fun, and new owners will likely want to take it out for a test flight immediately. However, 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 experience accidents. It is recommended to learn to operate your drone in a safe area, free of people and potential obstructions, such as buildings or power lines. Just because you have operated a UAV or drone before, that doesn't mean that every UAV is the same.

UAV Coach is a great resource for people who want to learn about drones in a supportive community. The site has links to safety resources and the news section is regularly updated. If you have a specific question, the website's forum hosts an active community that loves helping fellow enthusiasts.

Drone manufacturers created a similar resource for new recreational drone owners known as the “Know Before You Fly” educational website.

Download the B4UFLY App

Make sure you are aware of any temporary flight restrictions in your area. The FAA recommends using the B4UFLY app to identify temporary flight restrictions, no-fly zones, and other tips for safe, legal drone operation.

Drone Schools and Drone Pilot Certification Programs

If you're brand new to drones, consider drone schools. Some college students can even minor in drone aviation. Drones have many uses in the business world, aside from recreation, so some students aim to land a job in the field.

Understanding Low-Cost Drone Insurance Options

While having your drone insured on your home policy 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 option for extra coverage is becoming a member of Academy of Model Aeronautics (AMA). 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. New members can join for an annual payment of $75.

What Does AMA Cover?

According to their membership form AMA membership provides:

• $2,500,000 comprehensive general liability insurance coverage
• $25,000 accident and medical coverage
• $10,000 death coverage
• $1,000 fire, theft, and vandalism coverage

Make sure to read the fine print because there are stipulations on this coverage. For example, this coverage only comes into play once all other insurance has been exhausted. So, for example, if your homeowner policy provides coverage for any of these situations, then the claim would go to the primary insurer first, and then the AMA would respond second.

You should contact them with any questions. For example, you may want to find out what would happen if you don't have home insurance or liability insurance.