Debating whether or not to purchase drone insurance? See below for some excellent tips for what to buy, how to buy, and what it will cost you.

What Is Drone Insurance?

Let’s face it – drone flying comes with its own share of risks. You can experience an equipment malfunction, crash into a powerline or tree, or maybe have a flyaway.

Like any other insurance, drone insurance mitigates risk by providing insurance against possible bodily injury and property damage.

What Kind of Coverage Is Available?

A base drone insurance policy is a liability-only insurance policy.

Liability coverage for drone insurance policies typically varies from $500,000 to $1 million. Clients such as large production houses and big construction companies may even ask drone pilots to buy coverage with a $5 million CSL (Combined Single Limit).

Combined Single Limit is the sum total of bodily injury liability coverage and property damage liability coverage.

In addition to liability insurance, you can also buy hull insurance. Hull insurance covers any possible damage to your drone. Insurance companies are prone to considering the depreciated value and not the actual market value while settling a claim. So, avoid inflating your drone value when buying insurance.

Apart from liability insurance and hull insurance, you can also buy:

Ground Equipment Coverage
Payload Coverage
Spare Engines and Spare Parts Coverage
Non-owned UAS and Payload Coverage

Annual vs. On-Demand Drone Insurance – Which Is the Better Option?

On-demand insurance is a popular option, especially for part-time drone pilots who do not fly throughout the year. While on-demand drone insurance might work out to be cheaper, it has some disadvantages too.

Firstly, a client might ask you to furnish your certificate of insurance when you submit your bid. Secondly, many drone pilots work in remote areas with poor cell-phone connectivity. Clearly, in both these scenarios, a drone pilot is left with no alternative but to purchase an annual insurance policy.

Is It Mandatory to Get Insurance?

Certain states have made insurance mandatory for commercial pilots. Whereas, in other states, Part 107 pilots can still fly legally without purchasing insurance.

So should you fly without insurance? No!

If a drone flown by an uninsured pilot causes bodily harm or property damage, all of the financial liability will fall on the pilot. By not getting insurance, a pilot risks losing all his assets.

Brett Woods, a professional Part 107 pilot lost control of his drone and flew into a building through a window on the 27^th floor. Luckily for Brett, the floor was unoccupied, and while the property was damaged, no one was injured. Brett’s insurance made good this damage.

Remember – If you are buying commercial on-demand insurance, your provider assumes that you have a Part 107 certification. However, you CANNOT claim damages without a valid Part 107 certificate. Certainly, another strong reason to get your Part 107 license.

Are Drones Covered by Homeowners Insurance?

Not if you are a Part 107 pilot. Part 107 pilots will have to purchase a separate insurance policy. But, if you are a hobby pilot, your drone might be covered under your homeowner’s policy. However, we strongly recommend that you check the exact nature of coverage with your insurance provider.

Recreational Drone Insurance Options

1. State Farm Drone Insurance Policy

State Farm drone insurance has become a popular option for many drone pilots. State Farm, under its “Personal Articles Policy” covers a wide range of personal household items – one of them being cameras. Drones are insured under this “cameras” sub-category. Costing around $60 per year, this is strictly a “recreational drone insurance” for infrequent flyers.

Before you buy, there are several Disadvantages of State Farm Drone Insurance that you should be aware of:

If you are a Part 107-certified commercial pilot flying for business, you CANNOT insure your drone under this policy
Claiming drone insurance might push up the premium for your homeowners insurance
You might be denied coverage if you make repeated claims or make a claim within the first year of purchasing the policy
If you crash your drone and claim replacement, you will have to purchase a new policy
It does not offer protection against liabilities

2. AMA Drone Insurance

One of the perks of becoming an AMA member is that it comes with recreational drone insurance. The policy clearly states, "The policy does NOT cover business pursuits; that is any activity that generates income for a member beyond reimbursement of expenses, except this business pursuit exclusion does not apply to individual members providing modeling instructions for pay to AMA members".

This policy provides coverage against liability, medical expenses, fire, theft and vandalism. Before you go ahead and buy this policy, note that this is a secondary policy. Your AMA policy is "in excess" to any other applicable primary coverage, such as homeowner's.

What Will Drone Insurance Cost You?

Typically, liability-only drone insurance cost for a coverage of $1 million is $650. Cost of Hull insurance will amount to 10% of the cost of the drone. So, if you are flying a $1,000 Autel Evo, liability + hull insurance cost will be around $750. Your drone insurance cost will further increase if you opt for any add-ons like ground equipment coverage and payload coverage. We strongly recommend purchasing a higher liability insurance if you are taking on risky drone jobs.

How Can You Save on Your Drone Insurance Cost?

Firstly, insurance is negotiable. So, do not be afraid to haggle. After all, a penny saved is a penny earned. Secondly, your experience and training will be taken into account. Remember – your insurance policy is reviewed by an underwriter. So, if you have a long, accident-free flying history and have undergone drone training from an organization of repute, these factors will work in your favor.

Your drone crash insurance cost also depends on the nature of jobs and the associated risk. So, if you are using your drone for agricultural mapping, your insurance cost is likely to be lower compared to someone who is flying in areas of heavy interference.

Drone Insurance Cost Comparison

Next, if you are an established player with a fleet of drones, you are likely to be offered a better deal. Your per-unit drone crash insurance cost is likely to be lower.

Also, for extremely small damages, it is not worthwhile putting in a claim. Typically deductibles are pegged at 5% of insured value. So, for small damages, it would be financially prudent to bear the cost yourself. Moreover, the lower number of claims filed will result in lower insurance costs too.

Finally, do not hide any information from your broker in a bid to get lower coverage. This is a strict no.

Who Are Some of the Major Drone Insurance Providers?

Which is the Best Drone Insurance For You?

We strongly recommend Global Aerospace. With more than 90 years of experience in aviation insurance and offices across many international locations, Global Aerospace is your best bet for purchasing affordable insurance. In fact, all of Verifly's insurance policies are underwritten by Global Aerospace. To learn more about Global Aerospace insurance and our experience with them, check our Insurance and Risk Mitigation Course.

How to File a Drone Insurance Claim

If your policy is a drone replacement insurance policy like StateFarm, the drone insurance claims process is relatively straightforward-

STEP 1: You can file a claim via phone, online or through an insurance agent

STEP 2: Your insurance provider will review the claim and might request additional information from you

STEP 3: Once your claim is assessed, your provider will share their estimate, and repair options, if applicable

STEP 4: If your claim is cleared, payments are sent out via wire-transfer or mail

However, if your drone crash caused damage to people or property, you will have to file a general liability insurance claim. This is a more complex process that requires additional documentation. Here are some things to remember while doing so-

Get the names, addresses, and phone numbers of everyone involved
Record the exact location and time of the incident
Police reports, photos and any other documentation that is relevant to the claim
Do not discuss or share documents relevant to the claim with anyone in question

Depending on the nature and severity of your drone crash, you might also need to report the incident to the FAA and the NTSB. Check out our show, “Drone Crash? Here's What You Should Do Next” for detailed, step-by-step instructions on how to do so.

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