The Federal Aviation Administration estimates 1.6 million drones were purchased during 2015, with upwards of 1 million bought during the past holiday season alone. Besides FAA registration requirements, using drones for personal or commercial purposes raises several critical insurance issues, including coverage of invasion of privacy, personal injury and property damage claims, as well as for statutory violations. For instance, a number of states prohibit use of drones for voyeurism, or to collect information about critical infrastructure without consent. It is critical that you check privacy laws where the drone will be flown before taking to the skies.
If you or someone you know received a drone as a holiday gift, call your insurance broker to confirm that your homeowner's insurance policy or renter's insurance policy extends to drone-related damages. Most policies include coverage (subject to a deductible) for property damage caused by radio-controlled model aircraft (including drones), such as accidentally crashing into a neighbor's house or automobile, or bodily injury from hitting a person or animal. The policies may also cover loss of the drone itself if it is lost, stolen or damaged. However, it is less likely your policy will cover invasion of privacy claims, and even less likely it will cover violations of state or local laws.
As drones proliferate exponentially, insurance claims will surely follow. Both proactively and retroactively, insurers will in turn adjust current policy terms and conditions. These changes may include developing stand-alone drone policies, establishing coverage sublimits for drones, or requiring specific drone endorsements to homeowner's and renter's insurance policies. Anyone with a drone around their house must carefully review their policy at least prior to renewal, and discuss with their insurance broker the extent of available coverage.