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.
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:
On-demand drone 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 drone insurance mandatory? No, it’s not. But, do we recommend it? Absolutely!
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 27th floor. Luckily for Brett, the floor was unoccupied, and while the property was damaged, no one was injured. Brett’s drone insurance made good this damage.
Remember – When you are buying on-demand drone 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 drone 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.
Typically, the cost of liability-only drone insurance with 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 insurance cost will further increase if you opt for any add-ons like ground equipment coverage and payload coverage.
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 insurance cost also depends on the nature of jobs and the associated risk. So, if you are using your drone for agricultural mapping, your drone 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 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.
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