Drone Insurance – Liability and Drone Hull (Step-by-Step Guide)

Here you are flying along, getting some great footage of your neighborhood. Your finger is on the right stick just barely pushing it to the left, moving the drone sideways. You picked a good altitude, something high enough to avoid power lines and most everything else.

Everything that is, but old lady Mable’s hickory tree, anyway. You did know it was there, heck you wanted to get a bit of an orbit shot around it, for a reveal of the neighborhood.

You’ve lined it up perfectly. Should be good to go. You start your turn, your fingers now on both sticks, looking good, looking really good.

Then you hear it. You don’t see anything on the screen, but you hear it though. One of the props is hitting something, a branch. Ok, ok, just back it off. NOPE! Too late, it’s hung up on that branch, you see it now on the screen. Things have turned from bad to worse. It’s hung up good and your stick movements seem to be making it worse.

As you make your way to the spot, you can see the drone start tumbling through the tree. You make it there just in time to see it fall the last 10 feet hard into the ground. Oh! Noooo!

Now that you’ve slowed your pounding heart and have had a moment to catch, your breath, you can now assess the damage. It’s bad, and boy is it. Broken arm, two shattered props, gimbals toast. This is bad. Really bad if you don’t have a program backing the repairs for that damage.

Of which there are many, not having some sort of coverage. Repairing that damage will be out of your pocket.

There are programs you can purchase when buying a new drone, programs offered by the manufacturers such as DJI’s Care Refresh or Autel’s Care. These programs, however, can be limited and only cover so much, mainly just the drone itself.

» MORE: Is DJI Care Refresh Worth It? Here’s My Opinion

And what if you bought a used drone, or if your drone is just past that two-year period that those programs cover? What if it’s more than just the drone that was damaged? Then there is the very worst case, what if someone got hurt? You’re responsible for all of it.

What if there was some sort of Insurance, like what you might have for your home or car? Drone Insurance! That can protect you from all of these things.

Types of Drone Insurance #

Well, if you’re the fella above, you’re really in a bind. Or are you? In this situation, you may have coverage you’re not even aware of.

When we discuss insurance for drones, the focus is really on the commercial pilot. The hobbyist pilot has some different rules here and different options. A good example would be if our pilot above is a hobbyist or not. If he is, his renters or homeowners’ insurance may cover the damage, under its personal property section. I say may. It would really depend on that policy and what it all entails.

As a commercial pilot, the renters/homeowner’s insurance is not there, as a commercial pilot would not fall into any category where that coverage would apply, due to the equipment’s use for a business.

If you had something called Hull Insurance now, you would have been protected from that crash’s damage to the drone. Hull insurance is just what it sounds like. It covers the aircraft itself or the hull of the craft.

Hull Insurance #

Hull insurance means you’ll be covered for damage to the drone itself. The coverage can be written up to include ground stations, payloads, etc. as well, Whatever you want to have protected in the policy can be added.

It’s very similar to the warranty programs many drone makers offer like Refresh or Care. Hull insurance policyholders will most likely have a deductible that they will be liable for when making a claim.

Due to this, putting hull insurance on a low-cost drone system is probably unnecessary, since in most cases the deductible would be close to or over the replacement cost. Most drone insurance deductibles are around $500.00.

If though, you have a mid-level to top-end system, protecting that investment is a no-brainer really.

Let’s say in the example above, that the drone was a Mavic 3. The reality is you most likely got Refresh with it, but what if you didn’t? What if you scrimped and saved just to cover the purchase cost of the system?

Then those repair costs are on you. Having hull insurance would have provided protection when otherwise there wasn’t any. In this case, a $500 dollar deductible doesn’t seem too bad. So, it is a weighing of your options: care program from the manufacturer, Hull insurance from a provider, or going naked with nothing at all.

As Hull insurance is for your equipment, there is another type of insurance available, and is one that is very highly recommended for all pilots to consider and have. That’s liability insurance!

Liability Insurance #

There is also another type of insurance, and this available option is liability insurance. Liability insurance for your drone is very similar to that on your vehicle. This type of insurance covers damage to other people’s property, or in the very worst of worst-case situations, an injury that your drone may cause.

As a commercial pilot, I have always had some form of Liability insurance. Most companies will require it prior to you ever launching on their sites or performing work for them.

With this type of insurance, you can choose the amount of protection you wish to carry. Most typically you would have coverage between $500,000.00 and one million. Some may even have higher amounts. The amount of coverage you decide on will be dependent on the type of work you plan on performing.

Don’t think though that Liability insurance is only for the commercial pilot. It is not. Having liability insurance is just smart. By the very nature of what drone pilots do, there are always risks. “Gravity is a cruel mistress!”

For this reason, protecting yourself and others from damage that your drone may cause is important. It can be very possible for the damage to exceed an amount that you’re able to pay. Depending on where you fly and what you may crash into, the costs of that could skyrocket faster than a fly-away drone.

You as the pilot, hobbyist or commercial, will be responsible for any damage caused. Have you ever wondered what an 18th-story window costs? Yeah, me neither. I also wouldn’t want to find out. Having someone in your corner here is important.

As a Drone Pilot, you don’t want to crash. As a Drone Pilot, you don’t want to cause any damage to someone’s property. As a Drone Pilot, you most certainly have no intention of hurting someone with your drone. As a Drone Pilot, you are able to control many aspects of any flight you take.

For every flight you take, though, there is an uncontrolled aspect of it. After all, they’re not called accidents for no reason, and they happen. Being protected in that event is the same reason you pay to cover your home or your car.

Payload Insurance #

While liability and hull insurance are the two most common types of drone insurance found, you might also want to consider payload insurance.

Are you carrying an expensive thermal, multispectral, or cinematography camera and gimbal system? Some of that equipment can even exceed the cost of the drone itself easily. Protecting those investments is just as important as covering the craft.

Payload insurance can be set up to cover theft as well. And there’s also your ground equipment, like dedicated ground stations, laptops, tablets, UAV cases, remote controllers, etc. It can all be insured.

For policies that involve more than basic coverage, it is always best to seek out a quote from an agent.

Will my renters/homeowners policy cover my drone? #

If you are flying recreationally, your drone is considered to be personal property. What that means is your drone most likely would be covered under your renter’s insurance or homeowners’ insurance policy.  

Here it is good to note that a landlord’s homeowners’ insurance will not cover renters’ property. If you are a renter, it is always good practice to carry your own independent Renters policy, as most landlords’ coverage is just for their owned property, not yours.

This is also where hobbyist pilots and commercial pilots differ some. If you use your drone commercially, it is considered a business use property and is not covered by any homeowner’s insurance and would require a separate policy.

Homeowners’ insurance policies typically cover liability, no-fault medical coverage, and theft or loss of a drone and may be listed on your policy as ‘RC or model aircraft.’ The most common insurance policies are HO-2 (broad homeowners’ policy), HO-4 (renters insurance policy), and HO-6 (co-ops or condominiums) policies.

Those three types of policies cover the “16 common perils”. If your drone experiences any of these 16 types of damages, it will most likely be covered by most broad homeowners or rental policies.

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance.
• Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system.
• Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance.
• Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component).

Periods of Coverage #

A lot of Drone Insurance Providers offer different coverage periods. Like most types of insurance, you can pay monthly, quarterly, or annually.

There’s usually one other type of coverage period found in drone insurance. It’s unique to our field and that is hourly coverage. You won’t find hourly coverage offered by everyone, but there are a few that offer just that, such as VeriFly and Skywatch.AI.

Oh, you read that right. Some drone insurance carriers offer hourly liability insurance coverage. They don’t generally offer Hull insurance when it’s by the hour. What it is though, is perfect for the pilot who doesn’t fly all the time. Someone who needs coverage in certain areas vs. all the time coverage.

Let’s be honest, most of the time you may be flying in areas where there is nothing to be damaged if the flight goes bad, such as flying over a forest or a rural area. There are times when you may be flying in a congested, well-populated area, and having coverage here is just good for peace of mind.

Having the opportunity to activate coverage for just the time you’re flying may be cost-effective for you, depending on your needs.

For myself, I tried the hourly coverage for a while, as I wanted to see a comparison between my annual rate and what the hourly would total. In my case, the annual plan is definitely the better option. I spend less on the annual plan than trying to pay for it at an hourly rate. I fly too much for it to be cost-effective.

Cost of Drone Insurance #

The cost of drone insurance can be all over the place. It depends on what you’re looking to insure. Drone insurance operates very much like it would in any other industry, where insurance companies assess the risk of your business to determine the price.

Underwriting criteria for commercial drone businesses can include the type of drone being used, location, use-case, and the pilot themselves. Ultimately, insurance rates vary based on a range of factors.

A widely used, proven drone such as one of DJI’s drones might be priced at a cheaper rate than a home-built drone, where replacement may be more difficult. Drones flying in cities or other urban areas may see a higher cost than drones flying over an empty field for agricultural purposes.

While drone insurance costs can vary greatly, here’s what the average drone insurance policy will cost in 2020, for a single drone priced between $1,000 and $2,000 dollars.

These quotes are for Liability coverage only.

Provider Approximate
Cost for Monthly
Cost for Annual Coverage

Skywatch.ai
$62
$750

Allstate
$67
$795

DroneInsurance.com
$55
$600

State Farm
$65
$775

BWIFLY
$59
$673

The table above shows approximate costs for a $1 million coverage limit. And as you might have guessed, the costs increase for higher declared coverage limits.

Savings Tip: Most of the above companies will offer a lower rate if you provide some of your flight logs.

» MORE: How Much Does Drone Insurance Cost?

Where should I buy drone insurance coverage? #

When it comes to selecting a company for your drone insurance coverage, there are a few options out there now to choose from. Your current insurance carrier may even be able to assist you, as more and more traditional insurance carriers are coming on board and making plans available.

As is typical with most insurance carriers, some are better than others. Think about the difference between State Farm and Farmers for your home or renters’ insurance.

You’ll find it’s like that in the drone insurance realm as well. So which company you decide on is really a personal choice. You may want the best coverage possible at the lowest cost, or you may want the most inclusive coverage at a high cost.

Just know that not all insurance carriers are the same and some will honor a claim more so than others. Below is a list of some of the best companies currently out there.

• Best for High Coverage Limits: BWI Fly
• Best for Flexibility: Skywatch.AI
• Best for Hobbyists: Thimble
• Best For International Coverage: Droneinsurance.com
• Best For Business: United States Aircraft Insurance Group (ASAIG)

Ways to go about getting coverage #

Once you have completed your research into who you want as a provider, it’s now time to get yourself covered. There are a few ways you can go.

Call Your Agent #

You could just contact your current agent and delegate the process to him or her. As your insurance agent, they should be able to get you some sort of policy. The thing about that is most don’t have any idea what you’re really looking for or need.

Don’t think I’m knocking those folks; I most certainly am not. It’s just most in the traditional insurance industry were late to the party. Early on, most didn’t have any involvement with what was considered to be a very niche market with little or limited growth.

Those of us who fly know the mistake that was. This left many of them playing catch up and some of them are still shaking the tree to get that drone down, so to speak.

Call the Insurance Provider Directly #

You could just contact the company by phone and work with a representative to get everything set up. In the case where you have more than one drone or extra gear you want to be covered, this will be your best route to go. Especially because the multiple item coverage plans can get complicated in the online format and you may not always put everything in the right places.

Having an honest-to-goodness conversation may be the only way to get the full coverage you’re looking for with the least amount of hassle involved.

Use the Provider’s Website (Online) #

For the purposes of this guide, we’re going to go the online route for getting yourself insurance coverage. For most of us, this will be the easiest and best way to go through this process. Before we get to that, let’s make sure we have everything ready.

What do I need to get started? #

Before you start, no matter which way you go about it, you will want to have some things readily on hand. First and foremost, you’ll need your drone serial number or FAA registration number. This is important as the craft itself will be what is associated with the policy. This ensures you don’t have an issue if you ever make a claim.

Have a copy of your TRUST certificate or a copy of your FAA Part 107 on hand. Some companies will want a copy sent to them, some will just require your License number.

Some will require a copy of your driver’s license. This is used to verify your identity.

Then of course there is the regular information you should have, such as name, address, phone number. Once you have everything ready, let’s get online.

A step-by-step guide to buying drone insurance coverage #

For our purposes in this guide, we will be insuring a fictitious Mavic 2 Pro. We will be using the Skywatch.AI website for our example site. It’s a very commonly used company and its website sign-up pages are very similar to others mentioned above.

You will find that all of the above companies have similar pages for initiating a policy. So, let’s get our props spinning and get to it.

1. Go to the website.
2. Select Get a Quote.

3. You will be presented with three options. Select which one you prefer: Hourly/Monthly/Annually.
4. Next, you will be able to Select:Liability Coverage LimitHull CoverageAny Additional CoverageAny Additional Insured
5. Click Continue at the bottom of the page after making your selections.

6. On the next page, you find your Profile details, such as your personal or company information.
7. After completing the fields, click Continue.
8. You will now be taken to a Finalization page. Make sure the information displayed is correct.
9. Click Continue.

10. The next step will be for making payment.
11. Simply put your information into the fields and click Complete Purchase.

That’s it! Once completing the payment, your policy will go into effect on the day you arranged for it to start, and you will in a very short period receive a copy of your Certificate of Insurance.

This copy is for your records and it never hurts to print out a copy to keep with you in your drone case with your other documents, just in case you need it sometime.

Personal Experience #

For my company as well as myself, I have and maintain a policy that covers one million in liability coverage and also covers every drone in my hanger, minus the Mini 2. With a $500 deductible, that little Mini 2, well you know.

On top of the drones, I do also cover additional equipment such as a few cameras and my field laptop. This is the equipment I use daily, and I never want to be without it, as being without it means I’m not working.

So, it’s good to know that if the worst happens, I’m covered, even though there may be a little downtime. Never hurts to get in some extra fishing anyway. I won’t be breaking the bank to take care of any issues and replacements will be on their way.

As with all insurance, Drone, Home, Car, Death, it’s all about peace of mind and you hope you never have to use it. Having it there when it is needed is well worth the investment.

For myself, an annual policy worked best. I received greater savings by having a longer plan period over the monthly plan rate. You’ll pay more annually with monthly coverage vs. yearly coverage.

I also turned over several flight logs that led to a 25% decrease in the cost of my coverage. So, providing those logs really does help reduce the cost.

When I do feel a need to have additional coverage, well, I use the hourly coverage plans for those occasions to boost what I already have. Sometimes, the companies I work for will request higher coverage amounts. This way I don’t have to carry that amount and the associated cost for the year, but only when I need it.

I personally never want to be that guy; you know the one. The one who caused a great deal of damage and just ghosted away. I want to make right anything I might make wrong. I know even if not all of you out there feel that way, it’s nearly all of you that feel the same.

So, making sure you’re covered, well it’s just smart, like I said. So, see what’s out there when looking for coverage, shop around, check the reviews, do your due diligence and make sure whatever company you chose will work for you and your needs.

Fly Safe, Fly Always, Always Fly Safe!