Do I need drone insurance?

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Do I need drone insurance?

It’s a tale as old as time: man allegedly flies drone over neighbor’s property, neighbor takes a shotgun to said drone like it’s a game of Duck Hunt, neighbor has all charges against him dropped.

That’s all well and good, except for the fact that the drone owner is now a mangled-mess-of-metal-and-plastic owner. And it’s not only trigger-happy neighbors you have to worry about – with the holidays coming up and many people giving or receiving drones as gifts, what do you do if you run your drone into a tree, or your house, or someone’s face?

There are a lot of companies popping up offering insurance for your drones. But the real question is, do you need it?

As a quick note, drones are officially known as unmanned aircraft systems (UAS) or unmanned aircraft vehicles (UAV). We’ll call them drones in this article, since that’s what most people know them as, but if you see the phrases UAS or UAV out in the wild, now you know what they mean!

Introducing drone insurance

Drones are going to be big business in the coming years. The FAA estimated that there will be 30,000 drones buzzing about by 2020. And since we surely won’t be as coordinated as the flying drivers of Futurama, there’s going to be a lot of potential for insurance to help clean up our messes.

AIG made waves when it became the first mainstream insurer to start providing drone insurance through its Lexington Insurance Company subsidiary. In its pun-filled product profile (touting "elevated service" as "the unmanned aircraft industry is poised for takeoff"), AIG outlines its policies.

Some of it is standard: "broad physical damage and third party liability coverage" could describe your auto policies, too. But it also covers damages that are a little more specific to drones.

For example, while your coverage would include the operator of the drone, it also includes "non-pilot, on-ground crew." You’re protected against electronic malfunctions and failures, as well has hijacking or other forms of "spoofing."

You’ll need to decide if insurance is worth it, which will depend on what exactly you’re using your drone for.

Commercial insurance

A lot of the talk these days is about commercial insurance. As Amazon tests out drones in its continued march toward world domination and people across this great nation continue to hold out hope for the widespread use of the Tacocopter, it’s inevitable that more and more businesses get into the drone space.

In fact, it’s already happening. Some insurers are already using drones to scout claims, and they’re being rolled out in agriculture, law enforcement, real estate, and construction.

This is where drone insurance becomes a big deal, for a few reasons. There’s a higher liability risk when you’re dealing with customers and are more likely to be using your drone around people. And since you’re using the drone for your livelihood, chances are you sprung for a more industrial (read: expensive) model.

There are a number of companies out there providing drone-specific insurance. Most are aviation insurers that are incorporating drone insurance into their product lines. A few examples are:

Personal insurance

But not everyone wants to start a business with their drone. Some of us just want to relive our glory days of RC airplanes. Do you really need to get insurance for that?

Probably not.

First of all, it depends on what kind of drone you get; Toys"R"Us has a variety for under a hundred bucks, so even if you wanted to insure it, it’d likely be a waste of money. You’d be better off just buying a new one.

Second, if you’re doing it right then there’s little risk of liability. You shouldn’t be flying your drone high in the air, over other people, or out of your line of sight. The chances of it crashing down on someone are low.

But let’s say you do want to insure your drone. What’s the first step? See if you’re already covered with your homeowners insurance.

As Jonathan Evans, CEO of Skyward, told Dronelife, "Homeowner’s insurance has always covered radio controlled aircraft and so far, drones are falling under this classification."

Of course, this could change as drones move from "toys" to "legitimate flying machines that could pose a real risk to people and property, which you’d have to pay for," but in the meantime you might be ready for take off.

If you want insurance and you’re not already covered, that’s when it’s time to look into drone insurance.

Below is AIG’s application for drone insurance. Looks pretty straightforward, right? Some basic information about yourself and your drone and you could be covered.

Aerospace_Unmanned Aircraft Insurance Application (APP-19)_tcm3171-652576 by Michael Zhang on Scribd

Regulations

Being a responsible drone owner isn’t just about deciding on insurance. There are some rules you should know.

Things are about to get very serious when it comes to drones. Last week a task force submitted its recommendations to the FAA to basically answer the question of "what are we going to do about drones?" The answer? Register them.

The gist of the recommendations are:

  • Pilots should register themselves, not their drones. That means one application whether you have a single drone or an entire swarm.

  • You should be older than 13 to register. If you’re younger than that, get your parents on board.

  • It should be free.

  • It should be web-based, because it’s almost 2016 so duh.

  • There should be some sort of educational component involved. You don’t need to be the Flying Ace, but it would be great if you know the basics of flying a drone.

The point was to make the registration process as painless as possible. There are companies who are offering to register your drone for you, but the FAA is warning you to not be a sucker. This won’t be some DMV nightmare trip.

Interestingly enough, the report doesn’t mention insurance at all. That means while there are some rules in place, getting insured is still a judgement call on your end.

Keep in mind that there could still be local rules in place in addition to federal regulations. New York City, for example, is proposing its own set of limitations on who can use drones, as well as when and where.

At the end of the day, you probably don’t need drone insurance. If you’re going to be using your drone for your business, it’s a good idea to insure it just like you would your other equipment. But if it’ll be an around-the-home hobby, you’re probably set.

Still, you should check your existing insurance to see if you’re already covered. It could be just what you need to give yourself a little peace of mind before you hit the skies.

Image: nicolas michaud