Purchasing drone insurance might seem like an unnecessary cost if you’re just a hobbyist. But even though drones are relatively safe when flown with care and caution, there is still a certain level of risk associated with the operation of a drone. There are quite a few things that could go wrong, not least of which includes damage to property or even harm to individuals.
A good drone insurance policy is a great way to protect yourself from the cost of these eventualities. And if you’re a professional drone pilot, drone insurance should be the first thing you buy, after your drone of course. But just how much is it going to cost?
For a one time flight, you can purchase drone insurance by the day for about $30-$40 per day. If you need $1,000,000 liability coverage for just one month, plan to pay $60-$100 for a 30 day policy. The same coverage for an annual policy will cost around $500-$750 per year.
Of course there are a ton of variables that will affect the price you pay, and your situation will dictate whether you need to buy insurance by the day, month or year. Let’s take a look at what exactly drone insurance is, why you may need it, and some of the variables affect how much it costs.
» Looking for what to charge for your drone services? Skip ahead to find out the commonly used rates.
Types of Drone Insurance Coverage
There are two main basic types of drone insurance coverage. The most commonly purchased, and perhaps the most important type to have is Liability Coverage. Also important, though perhaps less so, is Drone Hull Coverage, also commonly referred to as Physical Damage Coverage.
Two main basic types of drone insurance coverage: Liability Coverage and Physical Damage Coverage.
In a litigious society, it’s important to protect yourself from lawsuits in the unfortunate case of an operation that results in damage to property or harm to individuals. Liability insurance will cover damages caused to third parties as a result of drone related incidents. Policies will typically cover bodily injury and property damage. The most common level of protection purchased by drone operators is a $1,000,000 liability limit, although policies can also start at a $500,000 limit, or can go up to $10,000,000 or even $25,000,000.
Drone Hull Insurance
Hull or physical damage insurance provides coverage for damage to the drone itself. This could be damage resulting from a crash or flyaway, or even water loss. The exact coverage details will depend on your policy, so be sure to read the fine print. For lower priced drones, it may not be worth the cost to pay for insurance, but if you’re flying expensive equipment, having insurance coverage could save you a ton in the long run if you should happen to crash.
The precise details of what types of damage or liability is covered will depend on which company you purchase insurance from. For example, DroneInsurance.com includes both personal and advertising liability in their base coverage, while other companies might offer advertising liability as an optional add-on. Make sure you read the fine print of exactly what’s covered and what’s not with your policy and discuss it with your insurance company if you have any questions.
Drone insurance is fairly unique in the insurance industry in that it offers an option for episodic coverage. That means that you can purchase insurance coverage for the times you are flying, and you don’t have to pay for it the rest of the time. This type of episodic coverage is available from several different providers in different coverage configurations.
Hourly – SkyWatch.AI advertises drone liability insurance by the hour starting at $5/hour.
Daily – DroneInsurance.com, Thimble, and other offer coverage policies by the day, although the offer from DroneInsurance.com requires a basic monthly rate.
Monthly – SkyWatch.AI, Thimble, DroneInsurance.com, and others offer monthly coverage options. Monthly coverage is a great option for seasonal businesses.
Annual – All the major drone insurance providers offer annual coverage packages. Annual pricing is almost guaranteed to give you the lowest rates if you need insurance for most of the time.
Here’s the scenario – You’re a professional real estate photographer, with a DJI Phantom 4 Pro. You need $1,000,000 Liability insurance coverage for your drone business. A little price comparison might give you results like these:
Drone Insurance Example Prices (Liability coverage only)
|Insurance Provider||Cost for 1 Day Coverage||Cost for 30 Day Coverage||Cost for Annual Coverage||Add-ons offered by provider||Maximum Liability Limit Offered by Provider|
|DroneInsurance.com||$37.37||$233.57||$689.50||Physical Damage Protection||$25M|
|SkyWatch.AI||$30 (for 6 hours at $5/hour)||$62.00||$750.00||Physical Damage Coverage; Indoor; Worldwide; more||$5M|
Let’s take the above scenario (Phantom 4 Pro, $1,000,000 Liability Limit), but suppose you also want hull coverage for your drone. Here’s what you might expect to pay.
Drone Insurance Example Prices (Liability + Physical Damage Coverage)
|Insurance Provider||Cost for 1 Day Coverage||Cost for 30 Day Coverage||Cost for Annual Coverage||Maximum Liability Limit Offered by Provider|
|SkyWatch.AI||$36 (for 6 hours at $6/hour)||$79.50||$870.00||$5M|
*Thimble does not offer physical damage coverage. You would need to purchase this on top of these prices from another provider such as DJI Care Refresh.
|Note: The prices in these tables are based on a fictitious scenario. Actual prices will vary based on location, drone model, type of work involved and other factors.|
Factors that Affect the Cost of Drone Insurance
There’s almost no such thing as a standard cost for drone insurance. Each situation will have unique factors that influence the cost for your insurance policy. But that doesn’t mean the cost of your policy is a shot in the dark. Knowing how the variables affect cost can help you plan ahead and find the best price for your situation.
Having proof of completed pilot training courses can help to lower the cost of your insurance policy with some providers. SkyWatch.AI offers a 15% discount for courses completed through certain establishments.
Just like with car insurance, having a safe flight record can lower the cost you pay for drone insurance. SkyWatch.AI offers a 30% discount for pilots with the highest safety score on flight logs recorded through the SkyWatch app.
If you’re getting hull insurance, the covered value of your equipment will dictate the price you pay for insurance. You can expect to pay a lot more for a policy covering your $10,000 drone and $5,000 camera than you would for a policy covering a $3,000 drone.
Flight and Maintenance Records
Keeping good records of each and every flight, maintenance event and battery cycle can go a long ways towards getting you a better rate on your drone insurance. Insurers want to see that you are a responsible drone pilot, and that you keep your equipment in good working order. After all, good habits in the nuts and bolts usually carry over into better safety awareness overall. It’s also a good idea to use a flight program that automatically logs your flight details.
The type of industry you are working in will impact your policy rates. For example, if you are working as an industrial drone inspector, you will have higher rates than a real estate photographer. This is due to the nature of the work site and the relatively higher risk level. Doing inspections at a power plant or on an oil rig carries a lot more possibilities for accidents, possible property or asset damage and bodily injury than flying over homes.
Level of Risk
Closely tied to what industry you are working in is the level of risk associated with your work. Those working in higher risk types of settings will need to pay more for their drone insurance coverage.
High risk drone jobs might include:
- Powerline inspections
- Oil and gas inspections
- Accident investigations
- Cell tower inspections
- Commercial asset inspections
Low risk drone jobs include:
- Golf course management
- Perimeter surveillance and security
Your primary business location will also affect the price you pay for drone insurance. For example, a quick price comparison between policy quotes for Pennsylvania and California turns up a higher price for drone insurance in Pennsylvania, all other things being equal. So, which state you are in may affect your price, as will the type of locations you are flying in, be it rural vs. suburban, proximity to restricted airspace, etc.
A fair cost for your coverage will take into account your training
Unless you’re a recreational flyer, you probably won’t be able to purchase a drone insurance policy without sharing a good number of specific details about the nature of your drone business. An underwriter from the insurance company will review the variables of your case and determine a fair cost for your coverage that will take into account your training, industry, location, etc.
Who Needs Drone Insurance?
For most drone hobbyists, drone liability insurance can probably be considered an optional luxury. If you’re flying in sparsely populated, non built up areas, the risk of damage to property or people is fairly low. If you’re flying on your own property, chances are good that some types of risk will even be covered by your homeowners insurance policy.
As far as hull damage insurance, it’s probably not worth it to pay the premiums on a drone costing less than about $800-$1000. Less than that, it’s probably more cost effective just to replace the drone yourself should it crash or get lost. If you have a DJI drone, a good option is DJI Care Refresh, which will provide a replacement drone (the same model or equivalent) in the case of loss or damage. The price for DJI Care Refresh (or Refresh+) depends on your drone model. For the sake of reference, you can get coverage on a Mavic 2 Pro starting at $159 per year.
For anyone running a drone business, drone liability insurance should be considered obligatory. In most states in the US it is not required by law, but many types of projects, clients and job sites will ask for proof of insurance before hiring you.
Even if your specific line of work doesn’t usually have clients asking for your insurance credentials, it’s a simple and fairly inexpensive way to protect yourself from the what-ifs. Afterall, $700 as a yearly business expense is really negligible as far as it goes toward protecting your livelihood (or even a major side income). If you have a commercial drone pilot license and are actively flying as a business, get drone liability insurance.
The physical damage coverage for professional drone pilots is probably a good idea, especially as most professionals will have equipment worth $1000 and upwards. Once you’ve put in the investment to get good quality gear to earn a living with, you’re going to want to rest easy knowing you’re not going to have to scrounge up the money again somewhere if you happen to crash. Make sure your equipment policy covers the drone itself, and also any other payload that goes with it, such as cameras, lights, thermal sensors, etc.
How to Lower Your Drone Insurance Costs
A few simple approaches can help you keep your insurance costs as low as possible.
Choose the coverage duration that’s right for you. If you’re flying very sporadically, hourly or daily rates will probably get you the lowest price overall. If you’re flying seasonally, only pay for the months you fly. But for most businesses, the annual rates will give you the best long term cost.
Get approved pilot training. Completing an approved pilot training course can land you up to a 15% discount on your premium rates with SkyWatch.AI. Other insurance providers can also offer discounts for flight hours logged and proof of flight experience.
Establish a safe flying record. Your years of safe flight are the best indicator of your actual level of risk. A clean record can earn you a discount on your policy price. SkyWatch.AI also offers a safety score system. When you log flights through their app, you can earn a safety rating that can earn you up to a 30% discount on your cost of insurance.
Carry small damage costs yourself. Submitting a claim for each and every little nick or scrape will push your premiums higher, not to mention the deductible you may have to dish out each time. If it’s a small cost, it’s probably better overall to pay it out of pocket.
Negotiate. The prices are not as fixed as you might think. Negotiating with your broker could get you a better price, especially if you’re a larger business with a big fleet of drones. You can likely get a volume discount.
Other types of insurance coverage you may need
Drone insurance policies are not all that standardized. What exactly is included in coverage may vary from provider to provider. Some offer certain coverages as part of the base package, and others will offer them as add-ons.
Some add-ons you might run into include:
- Additional Insured – the option to add co-pilots to the policy, or specific venues or clients.
- Indoor – the level of risk is typically higher with indoor flight. It’s not covered under most standard policies.
- Advertising Liability – this means protection against claims of stolen ideas, invasion of privacy, libel, slander and copyright infringement
- Cyber Liability – offers you protection in the case of hackers gaining control of your equipment.
- Payload Insurance – if you’re flying with non-integrated sensors, they will often need additional coverage.
Don’t forget that other aspects of your business may need insurance coverage that is not specifically related to drone insurance. All of your ground-based equipment, commercial property, and business liability coverages will likely need to be purchased separately.