Depends on what you are doing with the drone,
your appetite for risk and how deep your financial pockets are. There is an
anonymous saying I like “flying is not inherently dangerous, but crashing
is”. If you have a risk of crashing you
might have a need for insurance.
Risk
can be handled in a number of ways. You
can take the risk on yourself (self-insure), you can stay away from risk (don’t
fly), reduce the risk (better training, safety systems, only fly on calm days)
and you can transfer the risk to someone else.
Insurance
is basically transference of risk. You are transferring the risk of your drone
to the insurance company for a fixed smaller amount of premium. They hope you
will not crash and they will not have to pay a claim. But for that privilege they
have requirements that you are to follow.
When do
you need to consider buying insurance for your drone?
Are you flying as a hobby or recreational
use?
If you
are flying your drone as a hobby or recreation and you are not operating in the
commercial category, most likely your homeowners (if you have one) policy will
cover the liability insurance. Homeowners insurance might even cover the drone for theft
or losses other than crashing. You would be subject to the homeowner
policy deductibles. I don’t sell typical homeowners so I can’t tell you the
details, but make sure you contact your homeowner’s insurance company and ask
to know for sure.
Are you flying for hire?
Commercial drone insurance is usually
considered aviation insurance.
Reason
I am saying aviation is because once
you decide to make the transition to commercial operations, the homeowner
insurance companies really do not want the risk. Aviation insurance companies
already understand aircraft risk so the transition to drones is actually a
little bit easier. In fact, many of the aviation insurance companies have been
providing drone coverage for years but on a bigger scale. Just in the past
couple of years did they start opening there “doors” to smaller more general
aviation drone operators.
Commercial drone insurance coverage
1.
Liability
2.
Drone hull coverage
3.
Extra scheduled equipment
Typically, liability
coverage in an aviation insurance policy will be for property damage and bodily
injury. You need to know the basic
insurance definitions to understand the coverage. The following definitions were taken from
various policies and simplified as best as possible.
“Property damage”
means any physical damage to “tangible” property. This coverage does not cover the aircraft
itself, any of your own property or property that you are in charge of. This is just for the property belonging to
others that was damaged by the accident.
This damage might include the loss of use of the property. Example; houses, automobile, crops etc.
“Bodily injury” liability
means the physical (bodily) injury to or the death of a person.
What does aircraft liability insurance
protect you from? If you have an accident in your aircraft, the liability coverage
will protect you from lawsuits from people that are injured, any of the heirs
from anyone that is killed in the accident AND from anyone that has property
destroyed or damaged.
But it is important to remember that
the policy limit is typically the maximum the insurance company is responsible
for (payments and legal defense).
Hull coverage is
the protection you are buying for the actual cost of the drone and equipment
attached to the drone. Aviation
insurance is generally an “agreed value” policy. That means if you have a total loss, the
claims department will pay the stated value of the “drone” on the policy (minus
your deductible). This is different from your auto insurance. As an owner it is
your decision to value the drone at a reasonable level. Most underwriters will allow you to pick
the value based on the type of drone and equipment and the age. Or they may
request that you provide proof of the value (receipts etc).
That’s the basics of the type of
coverage that are available. For more information or with any questions, contact me, Scott Sky Smith "Name on the door".
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