Drones & Insurance

Getting a drone? Better check your insurance before you fly

As the popularity of drones continues to grow along with their uses – from commercial to recreational use – so do concerns about their safe operation in busy skies, neighborhoods and public spaces. Some insurers also have begun to evaluate the risk of unsafe drone operation, so if you’re planning to buy a drone as a holiday gift, or buy one for yourself, it’s important to know what insurance protection you have if your drone causes injuries or damage to others.

The advancement of drone technology has led to drones becoming smaller, more versatile and more affordable for the general public. The Federal Aviation Administration (FAA) reports 2.5 million drones (commercial and recreational) were sold in 2016 and estimates 7 million will be sold by 2020.

But along with that rise in popularity has come a rise in risk. The FAA said in 2015 that they receive an average of 25 reports each month of drones flying too close to commercial aircraft. Drones also have been involved in injury-causing crashes and have  caused damage to private and public spaces.

If someone is hurt or someone else’s property is damaged because of a malfunction or unsafe use of your drone, you could be held financially responsible. Before you start flying your drone, it’s essential that you review your Homeowners Insurance policy.

“Homeowners insurance provides protection not only for things that happen to your home, but also offers liability protection in the event someone else files a claim against you for their injuries or damages,” said Kenton Brine, NW Insurance Council President. “But as damages from negligent drone use mount, insurers are wise to consider their exposure to this increasing risk – and drone operators, whether using them for work or play, should verify their coverage before they fly.”

The NW Insurance Council and Insurance Information Institute offer the following information about drones and insurance coverage.

Injury or damage to others: If a drone you own is being operated by you or a family member for recreational use and is involved in an accident that causes injuries or property damage to others, you may be held financially responsible for the cost of those injuries or damages. In most cases, it’s likely your Homeowners Insurance provides liability protection (unless the acts leading to the damages were committed intentionally). Importantly, though, some insurers may specifically exclude liability for damages caused by a drone.

Theft of a drone: Homeowners Insurance policies typically provide protection for items in your possession. However, those policies specifically refer to “covered perils”, such as fire, theft and vandalism. A stolen drone is likely covered under your Homeowners insurance, but if you have a more elaborate and expensive drone be sure to talk to your insurance agent to make sure your coverage is sufficient to replace the drone if it is stolen.

Damage to a drone: A drone that is damaged because it crashes may not be covered because “flying a drone” is not a covered peril under your standard homeowner’s policy. Be sure to check with your insurance agent or company about coverage.

Drones and Renters Insurance: Some Renters Insurance policies will cover liability if your drone damages someone’s house (and possibly reimburse your landlord if you damage your rental unit), but others may not. Check your policy to know for sure.

Medical coverage: Your policy may provide no-fault medical coverage if a friend or neighbor is accidentally injured by your drone. Coverage levels do vary, so check with your Insurance Professional. Also, be aware that this coverage will not pay medical bills for your family members or pets if they are injured by your drone.

Commercial use of drones: If you plan to use your drone for business, you will need a commercial policy specifically covering the commercial/business use of your drone. Homeowners or Renters Insurance will not cover your drone if you are using it for commercial purposes. Coverage may be available from a commercial insurance broker, or you may need to contact a specialty lines or surplus lines broker to find the coverage you need.

Anyone who operates a recreational drone without insurance runs the risk of being exposed to personal liability. Be sure to follow all FAA guidelines and include insurance coverage on your checklist before taking your new drone on its first flight.

For more information, call (800) 664-4942 or visit www.nwinsurance.org.

NW Insurance Council is a nonprofit, insurer-supported organization providing information about home, auto, business and personal insurance to consumers, media and public policymakers in Washington, Oregon and Idaho.

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