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That is the best explanation I've heard on the issue. Does that apply to damage from a crash, or just loss through fly-away or theft?
State Farm type policy would apply to any sort of total loss I imagine.
I know from reading peoples posts here it covers for non recovery of the drone.
Pretty good that pilots could even get that sort of cover, they are putting a lot of trust in people, most of whom would not think of doing something fraudulent, but that leaves that quite open to anyone who was not as honest as most.
Not sure if any insurance whether State Farm or Care Refresh would be worth using if it was a crash that just resulted in minor damage, or even if such a policy was designed for repairs.
Might be worth self repair then, or at a repair centre (DJI or other) and save your policy for a total loss or major incident.
As with any sort of insurance, fine details will always be in the product disclosure form issued with the policy, worth reading through these.
DJI Care Refresh is different of course, usually with a recovery of the aircraft and a special 'excess' payable for the 1st and 2nd claims and for optional 2nd year.
They now have that flyaway cover too, but haven't read about that myself or how it works.