Drones: the biggest little things in aviation insurance
By: Chase Carlisle
Drones: not just a sci-fi reference anymore. Drones have now become common, with more and more models coming out that are accessible for anyone to purchase and operate. With the average drone costing near $1,000 and more, it becomes even more important to know what it takes to protect this flying investment.
According to EBCO Aviation Underwriters, drones are classified as an aircraft, and therefore, require an aviation policy. In many cases, insurance companies have taken their existing aviation policies and modified them to include coverage for drones and unmanned aerial vehicles (UAV).
Many drone aviation insurance policies provide liability coverage only, with very few adding in physical damage on the unit to their policies. The number of insurance carriers that will write drone aviation policies has grown over the past five years, as only one company was willing to take drones into consideration at that time.
In the insurance world, drones have been used for various reasons. Often, insured parties can utilize drones to take aerial photos of property to assess damage, determine value and more. Drones are also used to fly over forest fires to determine how to control the blaze, to show better views of homes for sale, to conduct building inspections and more.
Drones are rising in popularity for both recreation and business, mostly for their ease of use and ability to see the world from a new perspective. However, with each drone in the air, the risk rises of damage or danger to persons or property.
Currently, the Federal Aviation Administration (FAA) is still determining how to best approach the regulations that will be put in place to cover drones. UAVs are operated by both businesses and individual persons, meaning there need to be regulations in place for both groups. The FAA has proposed that most commercial drones operators will need to apply for the FAA 333 exemptions. As of August 2015, the FAA has issued more than 1,000 exemptions to commercial operators.
It is estimated that more than 30,000 UAVs will be utilized by companies by 2020, making drones the most dynamic growth sector in the aviation industry, according to the FAA. This makes the need for a clear set of insurance regulations regarding drones that much more important.
One large issue in reference to drones is the worry about invasion of privacy. TV shows have even begun to parody this issue, proving gravity of the concern. Liability coverage, which is provided under most aviation policies in place for drones, generally covers personal injury, which in many cases refers to invasion of privacy, as well. While each policy has different details, the majority of coverage comes down to the purpose of the UAV for each person and how they plan to operate.
Another large hurdle for UAV insurance coverage is size. Most aviation policies cover large aircrafts and jets. With the size of drones being significantly smaller, the policies will need to determine how coverage will work and what will be protected.
Drones have become a common site at concerts, sports games, parks, events and other social arenas. When it comes to insurance for drones and other UAVs, there are a lot of details that still need to be determined. If you or your business is considering purchasing a UAV, talk to your insurance provider about their aviation policy and how you can insure the risk of using your drone.
For more information, visit Carlisle Insurance online at www.carlisleins.com.