Drones have been a part of the public consciousness ever since the U.S. military began using them for surveillance and air strikes. In more recent years, drones (technically termed Unmanned Aerial Systems, or UAS) have evolved beyond military usage and have found their way into the hands of civilian consumers. While the civilian drone market was initially slow to grow, the market is now exploding thanks to recent advancements that increase ease-of-use as well as lower prices. Close to 700,000 drones were registered with the FAA in 2016.

For under $1000 USD, a consumer drone is capable of 40mph flight, has a max altitude of 16,000 feet and has a flight range of up to 8 miles away from its controller. The newest models have multiple systems to prevent accidents, including GPS assisted flight and auto return-to-home functions. Nonetheless, accidents can and do occur, which is a cause for concern whenever an object falls out of the sky. While most drone operators control their craft in a safe manner, there are exceptions. One drone pilot is facing up to a year in jail and thousands in fines after he lost control of his drone, knocking a woman unconscious. Yet another is looking at reckless endangerment charges after he crashed his drone into the Seattle Space Needle.

Issues like this raise questions of liability. While it is not yet mandatory for drone operators in the U.S. to have insurance coverage, it is nonetheless a topic of great interest in the drone community, both in terms of coverage for the drone itself as well as liability in the event of an accident.

Drone insurance can broadly be divided into two categories: Commercial and personal. Drones have been used commercially in a number of ways, including but not limited to: real estate photography, Search and Rescue, Law Enforcement and Agriculture. For those using drones commercially, it is important to note that many homeowner/rental policies will only cover drones used recreationally. A good commercial drone policy should cover the drone itself, as well as liability coverage.

Options for personal drone usage are much more limited. I recently purchased a drone for personal use, and was very interested in finding insurance coverage for it. I discovered that many agencies do not yet offer insurance for personal drone use. They can be covered under a standard homeowner or rental policy, but oftentimes the deductible on these policies renders filing a claim pointless. However, thanks to the internet I was able to find drone coverage under one agency: State Farm. State Farm offers drone coverage under a Personal Articles Policy. The cost varies by location (and is entirely unavailable in California), and not all State Farm agents are even aware that drone coverage is offered in this manner. Generally, the cost for coverage through State Farm is $60 for one year, with no deductible, and does not require the insured to have any other policies with State Farm. The policy covers essentially anything that could happen to the drone, including crashes, water damage and fly-aways (where the drone loses connection to its controller, and literally flies off, never to be seen again). The one drawback to State Farm’s Personal Articles Policy is that it offers no liability. However, this will likely be covered through the insured’s homeowner’s or renter’s insurance.

Not long after purchasing the drone, and not long after getting it insured, I also had the misfortune of filing a claim. I was flying the drone in a river valley, taking some video, when the drone lost contact with the remote controller. The drone is designed to return to its launch point when this happens, but due to poor signal it didn’t do so. Naturally, the experience of losing a new, expensive toy was pretty devastating. But, I called my State Farm Agent the following day. Two hours later, a check was in the mail for the full cost of the drone.

There is a great deal of untapped potential revenue in the drone world, particularly regarding personal drone use. There are a substantial number of people looking for the peace of mind an insurance policy can bring.

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