Recreational drones, technically known as unmanned aircraft systems, have (literally) been taking off in recent years. The Federal Aviation Administration estimates that there could be more than two million of them in the skies by the end of 2017, twice as many as a year earlier.
While flying a drone might be a fun hobby, it also carries serious financial risks that could be anything but fun if something goes wrong. Drones can be stolen, sustain costly damage, or cause damage to the property of others. Worse, they could even injure someone.
The good news is that your drone is more than likely covered to some extent by your current homeowners or renters insurance. But because drones are still relatively new as far as insurers and insurance regulators are concerned, there may be some ambiguity in your policy’s coverage. This guide explains the basics and lists some questions you may need to ask your insurance agent.
When Does Insurance Cover Drones?
Most homeowners or renters insurance policies don’t cover traditional aircraft, but your drone is likely to be considered a model or hobby aircraft and qualify for coverage as personal property. For that to be the case, you must fly it only recreationally. Using your drone commercially, such as filming weddings for clients, is considered business use and not covered by your home or renters insurance.
Damage to your drone. Drones can be expensive, ranging in price from a few hundred to several thousand dollars or more. If your drone is damaged or lost because of a covered peril, such as fire, theft, or lightning, it will be covered to some extent by your homeowners or renters insurance. If you simply crash it into a tree, you are probably out of luck.
Damage caused by your drone. If your drone does damage to someone else’s property or injures another person, your insurance policy’s liability coverage may offer you some financial protection. However, before you assume that it does, it’s worth asking your insurance company or agent how your specific policy would treat a drone-related claim.
One often-overlooked risk of owning a drone is the potential for an invasion of privacy claim. Most drones come equipped with cameras and other recording devices, making it possible to breach someone’s privacy, even unintentionally. For example, flying your drone over a neighbor’s backyard could pick up private conversations or other information. If your neighbor were to make a claim against you, your liability coverage should offer you some protection as long as your action was unintentional. Your insurance won’t cover you if you deliberately break the law.
How Much Are You Covered For?
Most homeowners or renters insurance policies set coverage limits for personal property at a percentage of the policy’s total coverage—usually between 50% and 70%. Some policies may put additional limits on specific types of property, such as jewelry or other high-value items. The limit on jewelry, for example, is often set at $1,000 to $2,000, according to the Insurance Information Institute.
So before you launch your drone into the wild blue yonder, check your insurance policy or contact your insurer to see what, if any, limits it sets for drones. If your homeowners or renters policy does cover drones, you should be insured up to the personal property limits of your policy, minus any deductible. However, if replacing or repairing your drone would cost less than, or about the same amount as, your deductible, you might be better off not filing a claim. You won’t get much (or any) money back, and your insurance premiums could rise as a result.
If the personal property limits of your policy aren’t adequate to insure your drone, you may be able to buy additional coverage in the form of a rider or an endorsement to your policy.
If your drone does damage to someone else’s property or causes injury, or if you’re sued for invasion of privacy, the liability coverage of your policy would protect you up to its defined limits. Liability coverage can pay medical bills, legal fees, and the costs of repairing or replacing damaged property. However, you could still end up being sued if your liability coverage isn’t sufficient to offset the damage or medical expenses. For that reason, you may want to increase your policy’s liability limits, even if they were adequate before the drone came into your life.
Another option is buying an umbrella policy, which can increase the liability limits of your homeowners or renters policy as well as for your auto insurance. For example, a homeowners policy might be limited to $100,000, $300,000, or $500,000 in liability coverage, but an umbrella policy could extend that to $1 million or more.