People are using drones in civilian and commercial areas, and their usage is evolving day by day. But this rapid growth also gives rise to potential misuse of this technology. The advancement in drone technology goes hand in hand with new challenges and risks. As the number of U.A.S. multiplies, it is observed that there were and will be, incidents of collisions and other accidents involving drones, causing damage to humans and property, which have direct relation with drone insurance.
In this article, we shall aim to highlight the critical issues in drone usage and the risks related to the private and public use of drones, and also best drone insurance.
Our Changing Landscape
Did you know that experts believe that the number of drones will be triple in 2020? According to The Federal Aviation Administration (F.A.A.) in the U.S., by the end of 2016, over 600,000 drones will be used for commercial purposes. This number is three times the number of human-crewed aviation aircraft. Moreover, for recreational purposes, 1.9 million drones are expected to be used.
Advantages of the U.A.S
With the help of control stations on the ground, drone pilots fly them remotely, and they are used for dangerous tasks, to solve problems and disaster relief scenarios. Every day, drones are used in different countries and situations to improve the safety of countless people.
Commercially drones are used in:
- Law enforcement
- Agriculture (surveying crops)
- Aerial photography
- Industrial inspections
- Insurance companies to survey damage from floods or another catastrophic occurrences
- To help in search and rescue.
- Alleviate distress and impairment to property and victims
- Delivering blood and vaccines to remote areas
- Fighting grass fires
- Spraying insecticides and sanitizers
- Delivering food
The Drone Risks
New risk exposures are emerging as the commercial and entertainment drone usage increases. The finalized regulations will encourage the widespread usage of the U.A.S., resulting in more incidents giving rise to multi-million dollar claims against manufacturers, operators, and businesses.
The majority of the drone owners are hobbyists who are mostly unregulated in most countries, which gives rise to safety concerns because most of these drone operators are inexperienced and untrained. The novice control of the U.A.S. has resulted in loss activity, as observed by Insurers. Accidents are inevitable, no matter how technologically sophisticated we become.
These are the main safety concerns of drones:
- Mid-air collisions: A mid-air collision occurs when the pilot fails to see and dodge human-crewed aircraft flying below 500 feet, such as helicopters, airplanes landing and taking off from airports and agricultural planes, to name a few.
- Loss of control: This can result from system failure or if the drone flies beyond the signal range, and this is a considerable risk. Already many accidents have happened involving injuries.
- Damage from foreign objects: Damage from bird strikes is an issue for the aviation industry because it is the fifth-largest generator of claims in insurance. If a drone collides with an airplane’s engine, it can cause 10m $ in physical damages.
Malicious Acts and Risk Scenarios
Criminal activities can be carried out by people using drones. They can be used to target critical buildings—several incidents where drones flew over power stations. Terrorists can use drones to attack or drop bombs on sports stadiums or concerts where many people gather. Hackers can spoof the radio signals of a U.A.S., which can end in a crash, theft, or loss of essential data during the transmission of information to the control station. In addition to this, there are concerns regarding privacy and trespassing issues.
Despite how experienced you are as a drone pilot and try your best to manage risks by securing an appropriate airspace authorization, following a pre-flight checklist, to name a few, the sad reality is that accidents can happen. If you fly a drone that costs $300 to operate in your neighborhood or at an aircraft field, you do not need a colossal drone liability insurance policy.
On the other hand, if you are flying for any non-recreational activity like conducting business, or hopping on behalf of a company, where another stakeholder is also part of it, it is good to purchase commercial drone insurance.
Does the Law Require Drone Insurance?
For residents of the U.S.A., drone insurance is not required at the moment by the Federal Aviation Administration (F.A.A.) for commercial drone insurance or recreational use. However, there are individual insurance requirements based on your aircraft if you reside in Minnesota. For example, a minimum level of insurance coverage takes on a particular project for a company that needs insurance for all its vendors.
If you wish to fly a toy drone for recreation, you might consider cutting down the liability exposure. Buying drone insurance is quite economical, yet it gives you peace of mind.
The Three Main Types of Drone Insurance
The most common types of drone insurance are as follows:
Drone Liability Insurance
Drone Liability Insurance protects from:
- Third-party claims of property damage or injury.
- Drone accidentally crashing into someone’s car or building.
- They are getting sued to cover someone else’s medical bills.
Several types of liability insurance policies available, and you must read the specific fine print to see if the policy covers negligence or privacy infringement claims. The limit usually ranges from $500,000 up to $10,000,000 per occurrence.
On-Demand Liability Insurance
In this type of insurance, you only pay for the time you are up in the air. ‘SkyWatch Drone Insurance ‘ is a highly recommended on-demand drone insurance company in the U.S.
The Hull Liability Coverage is where you are insuring the actual drone, if the drone you fly is a DJI camera drone, its company directly provides three direct hull insurance coverage plans:
- DJI Care: It is only available for older models of Inspire or Phantom drones. It covers damages to the DJI camera, aircraft, or gimbal during an accident or normal flying. You will get coverage amount equal to the price of your drone for repairs within the expiry period, and there is no limit to the number of times the insurer repairs the drone, as long as you do not cross the total coverage amount. DJI will cover the shipping cost if you are in the city where you purchased DJI care.
- DJI Care Refresh: It is the best seller plan and allows you to skip the damage assessment and quotation phase. The DJI service center ships you a replacement of your damaged drone as soon as they receive it.
- DJI Care Refresh: This package offers you up to two replacement units within a year. It also covers water damage and collisions.
If you are looking for hull insurance coverage, you can check the drone manufacturer for their coverage or consult with a drone insurance agent for a professional drone.
Payload insurance provides liability coverage for the following:
- Expensive thermal, multispectral, or cinematography camera.
- Gimbal system
- Ground equipment.
- Remote controllers
- UAV cases
- Dedicated ground stations
- Tablets, laptops, etc
- Non-owned coverage
- Personal injury coverage
Drone Insurance Cost
A liability insurance policy can run from $5 per hour for $1 million in coverage, and you can also pay monthly or yearly. On the other hand, a broker will put together a custom drone policy for you around $600-$800 annually. Each company has different plans, and you will need a custom quote from a company and its cost and what will be covered, some insurance companies include hull insurance, while others do not, so you should browse different policies from different companies and weigh your options before finalizing your purchase.
Where to Purchase Drone Insurance ?
If you are a drone pilot in the U.S, you can buy on-demand insurance starting from $5 per hour, then you can download the insurance company’s app and set up your account. Plugin, the flight location, mission parameters, and the app will give you the rates, so you can buy the insurance directly without involving an agent.
On-Demand Insurance Providers in The U.S
These companies offer on-demand insurance that can be customized according to pay by the hour, day, or month, and it is a pocket-friendly option for people who are newbies in drone flying. So if you are interested in an annual policy, then consider the following options:
This article has discussed all the crucial points regarding drone insurance, so if you fly a drone, then it is highly recommended to protect yourself and your business with the help of drone insurance.