Drone Insurance Guide
We have insurance for everything important. Our automobiles, health, homes, ‘toy’ vehicles, and so on. For all you drone owners out there and specifically those of you who use your UAVs commercially to generate income, low and behold – drone insurance is here! Although drone insurance is a relatively new product, its benefits are many (specifically for you professionals). Not only does it protect you in case of an accident, but it also protects your clients. It shows them that you’re truly professional, verified (a lot of credibility checks go into obtaining insurance), and allows them the comfort of security.
Drone insurance is no different from any other form of insurance. It covers loss of vehicle, accidents, and damages (both to the vehicle itself, and to whatever was damaged in the instance of a wreck). To receive the best possible rate, drone insurance companies want to know they are insuring a trusted pilot. Similar to car insurance (you’re not going to receive the best quote when you’ve been in three wrecks and have two DUIs on your record), the cleaner your record, the better off you’ll be. These companies require operating manuals, maintenance logs, and a record of parts or additions purchased. If you haven’t been documenting these things, start now. The more professional and prepared you are, the higher chance you’ll have of negotiating that reasonable rate for your drone. As for what type of uses you’ll be covered for, here’s a list:
- Law Enforcement and SWAT
- Emergency Response (FEMA)
- Traffic Patrol and Accident Assistance
- Corrections Facility Security
- Fire and Rescue
- Homeland Security
- Facilities Security
- Maritime and Shipping
- Railroad and Highway
- Archaeology and Geology Exploration
- National Parks and Recreation
- Movies and Videography
- News Gathering
- Real Estate
- Pipeline/Hydro Transmission line inspection
As with all things, you must first ask yourself what it is that you’d like to achieve with your drone. Let’s say you buy a jet ski and plan on using it once a year at your private lake. Is the most expensive and premium insurance needed? Most likely not. The same is true for drones. Do you really need to buy insurance if you’re flying your inexpensive drone around recreationally? The answer is probably a hard no. But if you’re running top-of-the-line gear, and using your UAV as a source of obtaining income – then insurance is a must have. This is what the rule of thumb for commercial UAV pilots is becoming: liability insurance is a necessity, as it’s a strong source of credibility, protects your investment, strengthens your first impression with your client, and can save your business.
Almost all types of accidents are covered. From the loss of your drone to damages from a crash, all the way to a long list of liabilities (manufacturer product, third party legal, premises, fire, independent contractors, advertising, contractual) to theft or hi-jacking of your UAV. Again, to drive this point home, drone insurance is very similar to any other type of vehicular insurance. Crashes, damages, theft, are all covered. Disclaimer here: these will vary company to company, so be sure to do the proper research before signing with a provider (one might offer more coverage than another for the same price!)
Drone insurance is (generally) affordable. Given that your ducks are in a row and you can provide all the information required, drone insurance shouldn’t break your bank. In terms of the cost, drone insurance is divided into two parts; liability (damage and claims by third parties) and hull damage (damage to the drone itself). There are insurance policies there that cover high-end drones for under $1000 a year, and others that charge only $10/hour of flight (obviously you’ll need to weigh the amount of flying you’ll be doing and add it up). There’s no way to predict exactly the price you’re going to receive from an insurance company. You’ll need to do a lot of due diligence here – reaching out to different companies, requesting quotes, detailing your situation and why it is that you need coverage. Each quote will be unique to the individual. However, a few things these companies might consider when generating your quote:
- Have you logged an ample amount of flight time (over 100 hours?)
- Do you keep an updated maintenance log?
- Are you licensed?
- Are you registered? Please, please be registered.
- Do you own or rent your equipment?
- How does your business look? (Is your website professional, do you have good reviews?)
- Where are you flying? (Flying in dangerous terrain versus in your own home area?
To obtain an insurance quote, go to the various different websites and fill out the application forms. You’ll need the same information you need when applying for any other sort of insurance. In the rare chance that you’ve never had to do so, you’ll have to have all personal information handy. That means address, social security number, contact information, and so forth. You’ll want to detail the type of coverage you need, the type of equipment you have, how much you spent on it, and you’ll need to give an overview of the type of gear you need insured. Where you’re planning to fly the drone and how many hours you’ve spent doing so is important too – since that drastically affects the policy (think of car insurance: are you a racecar driver, or do you use your car for your five minutes work commute every day). You’ll need to disclose if you have any record of loss or damages, and showing any proof of UAV pilot training helps to prove competency.
You can lose drone insurance coverage the same way you can lose any other type of insurance; by being careless and irresponsible. If you’re not logging your flight data, you’re screwing up. This is important; because the insurance provider wants you to manage your hours so they know how much the drone is being used (especially if you have obtained a policy that charges you by your flight time, rather than through an annual fee). Also, what happens when there’s an accident and your flight wasn’t logged? The insurance company is just going to take your word for it? Never. A less common reason for losing insurance is when pilots don’t register their serial number or post the proper identification on the drone itself (c’mon people, would you ever drive your car the length of the year without your registration sticker?). This is now mandated by the Federal Aviation Administration. Maintenance is a third issue – if pilots fail to log their maintenance issues and work done on the vehicle, it’s hard for the provider to trust the pilot when something has failed and requires compensation. Last but not least – not flying safely. How would they know? You’d be surprised at how many pilots post YouTube videos of aerial footage they captured – only for the video to prove their blatant disregard for fly zones, safe, ethical flight, weather conditions, and so forth. So long as the pilot manages his aircraft (logs flights and maintenance), adheres to the FAA rules, practices safe flying, and, of course, pays the insurance premium, there’s no reason for his insurance to be cancelled.
What drone insurance companies are out there? Below you’ll see a list of different companies which offer all drone coverage. An important note that is seen on a few websites here – is that an AMA (Academy of Model Aeronautics) membership does not cover commercial flights. Be wary of this. If you think you’re covered through that and you are generating income with your drone, you might run into some serious problems down the road. Also, many of these companies are not specifically drone-insurance companies; rather they offer a wide array of coverage.
It’s pretty simple – look up the companies mentioned, request a quote, and do some research on the provider and the coverage it provides. Remember, research is very important here. Depending on what you use your drone for, and how many hours you fly a year, there are policies that will tailor your coverage perfectly and others that won’t be worth it at all.
How do you file a drone insurance claim? The following is taken from Unmanned Risk Management’s website and details their policies for filing claim:
‘Notify the insurance company as soon as possible. Note the time, place and description of the occurrence and the names with points of contact for any injured people and witnesses, including all passengers. Immediately forward copies of any demands, notices, summonses or legal papers received in conjunction with an occurrence.
Notify the proper authorities. Contact the police in particular for theft or vandalism claims.
Do not make any statements (oral or written) without insurance company permission. You cannot hinder the insurance company’s ability to seek reimbursement for damages from responsible parties, therefore, do not assume any obligation, liability, offer or pay reward or make any payment, except for necessary first aid or to immediately protect property from further damage.
Do not abandon your aircraft or insured property; take all reasonable precautions to protect property immediately after the loss.
Cooperate with the insurance company and its representative(s). Such things as regular communication with the adjustor, answering questions about the occurrence under oath, helping obtain and give evidence, attending hearings and trials and getting witnesses to testify are all generally expected.
Allow the insurance company to inspect the damaged property prior to repair or disposal.
File proof of loss within a set amount of time with the insurance company. This is usually a sworn statement setting forth the interest of the Named Insured and of all others in the property affected, any encumbrances, the value of the property at the time of the loss, the amount, place, time and cause of such loss, and the description and amounts of all other insurance covering such property.’
There you have it. Hopefully at this point, if you’re using your drone to generate income, you can see the value and importance of insurance. With this guide, you’re a bit more informed – now all that’s left is to do some research, fill out the appropriate paperwork, receive some quotes, and decide which provider is best for you. Remember, safe flying is the only flying. Along with being a responsible pilot, you want to make sure you’re covered for a variety of situations. Insurance offers that peace of mind to you and your client – and guarantees your protection. If you’re flying commercially, it can save your business.