Drone Insurance FAQ’s – How to Get the Best and Most Affordable Coverage

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.

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

The on-demand drone insurance market can be quite confusing, particularly if you are a first-time buyer. There are many different players offering a wide range of insurance products. For this comparison, we considered the 3 biggest players in the on-demand drone insurance market -

Skywatch
Verifly
Droneinsurance.com

Admitted vs. Non-Admitted Insurance Carriers

As we commenced our research, we discovered that Skywatch and Verifly are “Admitted Insurance Carriers” whereas Droneinsurance.com is a “Non-Admitted Insurance Carrier”.

An admitted insurance carrier, we learned has been approved by the state’s insurance department. Is this important? Yes!!!

Two BIG Reasons to purchase insurance from an Admitted Insurance Carrier

# Reason No. 1 – The State Acts as a Regulator
An Admitted Insurance Carrier must comply with all state insurance regulations. That means that Skywatch and Verifly need the state’s approval before increasing insurance premiums. However, Droneinsurance.com, a non-admitted insurance carrier is under no such obligation.

#Reason No. 2 – You get Added Protection
If an Admitted Insurance Carrier goes bankrupt, the state steps in to honor all claims. So coverage from an admitted insurance carrier comes with added protection and ensures peace of mind.

Needless to say, our inclination for purchasing insurance from Droneinsurance.com greatly reduced once we discovered that it was a non-admitted insurance carrier.

Next, we received quotations from all three on-demand insurance providers. Skywatch gave us quotes ranging from $12/hour to $15/hour. Both Verifly and Droneinsurance.com were cheaper (or so we thought) at around $10/hour.

This was when we discovered Skywatch’s unique discounting mechanism that rewards drone pilots for safe flying. These discounts are calculated based on their “Skywatch Safety Score” that ranges from 0 to 100. Needless to say, if you have a long, safe and crash-free flying history, you will enjoy a higher safety score and lower insurance premium.

So, how do you build your Skywatch Safety Score?

There are TWO ways to build your Skywatch Safety Score.

Option # 1 – Fly Using the Skywatch App
You can build your Skywatch Safety Score by flying through the Skywatch app. (Note: You do NOT need to purchase Skywatch insurance to start building your score)

To start building your safety score, fly through the Skywatch App for 5 minutes and then land your drone. Repeat this process 5 times. Once you do so, you can start logging your safety score.

Check out this guide if you wish to learn how to navigate the Skywatch App.

Option #2 – Import Your Log Files to the Skywatch App
Alternatively, you can also import flight data from your drone to the Skywatch App.

Hourly / Daily On-Demand Drone Insurance
For hourly drone insurance, Skywatch was the cheapest option. Once, we built up our Skywatch Safety Score, our drone insurance cost went down significantly to $8.5/hour.  Verifly quoted a price of $10/hour.

Interestingly, it is not possible to purchase hourly drone insurance on droneinsurance.com. At the least, you need to buy their daily drone insurance. The cost for daily drone insurance from droneinsurance.com is $37 per day (which includes a $7 monthly fee).

The monthly and annual plans, we discovered were even more affordable.

Monthly Drone Insurance
Droneinsurance.com was the most expensive insurance provider when we compared monthly plans. We were quoted $239/month for an insurance plan with $1,000 hull insurance, $1 million limited liability and base coverage. Skywatch’s monthly option is our personal favorite as it allows for hull insurance.  A similar policy from Skywatch will cost you just…. $58.53/month.

THAT IS A SAVINGS OF $179 EVERY MONTH! OR $2,148 EVERY YEAR!

Annual Drone Insurance
An annual drone insurance plan from Skywatch is even more affordable at $600/year.

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.

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.

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 “recreational drone insurance” for infrequent flyers.

To avail State Farm Drone Insurance:
You must be a hobby pilot. So, no – you cannot post your videos on YouTube.
Your drone must weigh less than 55 pounds.
You must furnish invoices for your drone as well as accessories

So, why is State Farm Drone Insurance so popular among hobby pilots? Let us look at the pros first:

1. Unlike DJI Care Refresh, State Farm Drone Insurance is valid worldwide
2. If you are insured with DJI Care Refresh, you will receive a similar drone or an equivalent as a replacement. So, for instance, because of production disruptions, a Phantom 4 Pro pilot might receive a Phantom 4 Advanced as a replacement. However, with State Farm Drone Insurance, you will receive a check straightaway.
3. You can purchase a policy with zero deductible

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

1. If you are a Part 107-certified commercial pilot flying for business, you CANNOT insure your drone under this policy
2. Claiming drone insurance might push up the premium for your homeowner’s insurance
3. You might be denied coverage if you make repeated claims or make a claim within the first year of purchasing the policy
4. If you crash your drone and claim a replacement, you will have to purchase a new policy
5. It does not offer protection against liabilities. So any damage caused to people or property is not covered under this policy
6. State Farm policies vary by state. So, make sure you check with a local State Farm agent before making your purchase
7. Coverage is not available for the State of California

Check out our comprehensive State Farm Drone Insurance Review to learn more.

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.

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.

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.

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.

And lastly, you can get an education rate on yourSkywatch insurance and save up to 15%  by taking our Flight Mastery Course. This coupled with a good Skywatch safety score can push up your total discounts to as high as 30%.

SkyWatch
Verifly
https://www.droneinsurance.com/
Bullock Agency, Inc.
Avion Insurance
State Farm Drone Insurance
Global Aerospace

With its unique discounting mechanism that encourages pilots to fly safely, Skywatch is the best drone insurance for you. We, at Drone U, have switched over to Skywatch from Global Aerospace over the last year. Skywatch's parent company, Starr Insurance Companies has stellar credentials and was a practical solution to a large fleet.
With more than 100 years of experience in the insurance sector, Starr Insurance has a presence spanning five continents. Starr’s insurance company subsidiaries domiciled in the U.S., Bermuda, China, Hong Kong, Singapore, and U.K. each have an A.M. Best rating of “A” (Excellent). Starr’s Lloyd’s syndicate has a Standard & Poor’s rating of “A+” (Strong).

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.