This is National Drone Safety Awareness Week running from November 16-22, 2020. With this in mind, and with Christmas almost here, and recreational drones once again expecting to be a popular gift, I decided to take a look at insurance coverage for drones.
Drones or UAVs – unmanned aerial vehicles – or UASs – unmanned aerial vehicles – are available in all shapes, sizes and price tags. Some hobbyists use cheaper drones for fun while professional photographers, for example, can buy more expensive drones and fit them with high dollar cameras or video equipment. Depending on the use and model, drones can cost anywhere from $ 40 to $ 4000. The good news is that if you are a weekend hobbyist, your homeowner's policy will likely cover a drone in the same way it would cover personal property or content. Therefore, there can be no additional insurance costs to cover a recreational drone. On the other hand, if a drone is part of your business, it is an appropriate step to purchase a standalone insurance policy.
If your homeowner does not cover your drone and you talk to your agent about obtaining such insurance, you may be asked: (1
Drone insurance is like any other content policy. There is Hull Insurance that covers damage to the drone in an accident up to a certain limit. And there is liability insurance that covers damage to third party property or damage to third parties caused by the drone's operation. For example, if your drone falls on the neighbor's roof and the drone is damaged, the hull insurance would cover part of the cost of repairing or replacing your drone. If the collision damages your neighbor's roof, the liability insurance would cover the cost of repairing the roof. If someone is physically injured in a drone accident, liability insurance – medical coverage without fault – can cover medical bills for a third party.
Now look at another example where you own a drone and do not have insurance. Imagine that you are out flying your drone and it hits an electric line and knocks out the power to an entire neighborhood. Who do you think will pay for damages caused by losing power? It will not be the electricity company. Having insurance can protect you from having any financial responsibility for the blackout. 2 When buying a drone or receiving a drone as a gift, insurance coverage should be the first consideration.
Drones were not federally regulated until 2015, when the FAA began requiring drone owners to register drones weighing over 55 pounds and to place the registration number on the vessel's outer body. 3 One of the first facts you will learn is that the FAA prevents recreational drone pilots from flying over an altitude of 400 feet, measured from takeoff, in uncontrolled airspace. 4 The 400 foot high altitude rules adopted by the FAA in 2018 have caused controversy with experienced pilots, however, stricter rules have become necessary due to the increased drone use. 5 Before the regulation was adopted, it was only a guideline. 6 After the regulation passed, many drone manufacturers began installing software that only allows flights up to an altitude of 400 feet and each higher level attempt causes the drone to just hover in place. 7 At present, there is no exception to the 400-foot rule for recreational drone pilots. For commercial drone pilots licensed under 14 CFR 107, the rule is similar except that a pilot can fly a drone over 400 feet if they are within 400 feet of a structure.
Drone flying for the public is relatively young industry. As with many rapidly evolving technologies, insurance parameters and legal rules with drones will continue to evolve. There is at least one constant and that is the need for insurance coverage for your recreational or commercial drone. If you own a recreational drone and do not know if you are covered for property damage or damage to individuals, first check your homeowner's policy and call your agent to find out if you are covered. If you are not covered, you should think hard about getting some insurance coverage for your drone. If you own a commercial drone, these are not covered by your personal policy, so you must contact your agent to obtain an independent policy. As drones continue to make their way to the sky, the number of insurance claims will inevitably increase with them. Drone owners and pilots should be aware of potential liability and obtain insurance coverage that can provide them with protection.
1 See 14 CFR 45.
2 See Is your drone Insured? https://www.thebalance.com/what-you-need-abon-drones-and-your-insurance-3961255.  3 See 14 CFR 45 (identification and registration).
4 Id. at 336. "Controlled airspace" would be, for example, an airport or the airspace around the White House.
5 See What happens if you fly your drone over 400 feet? (March 3, 2020) https://pilotinstitute.com/drones-above-400-feet/ The 400-foot rule is based on the minimum crew altitude of 500 feet. The FAA therefore believed that the 100-foot buffer would be sufficient to avoid close encounters between manned aircraft and drones.