Update: State Farm Drone Insurance

[Chaosrider]

We all know how excessive the rules are about what counts as "Commercial" operation in the drone realm. Using your own drone to inspect your own roof counts as commercial.

But I wanted to get my new FPV insured (the DJI policy is way too expensive), so I checked with the local State Farm agent. They asked if it was going to be for personal or business use. I said that I hadn't made any money with it yet, but I hoped to eventually, so I guess it's business.

This is the response I got:

"Unfortunately in Nevada, we can only insure drones on personal articles policies if they are for personal use only. I contacted our underwriters, and they said if there is any business exposure, it is ineligible for State Farm."

So if you get a "Personal Article Policy" with a stipulation that the drone is for personal use, and you're operating a flight under 107 rules...you're probably not covered. Even if it's just registered under Part 107, it may not be covered.

Bummer. But, YMMV.

The agent was kind enough to point me to other agents in the area who do handle commercial drone insurance. I'll report back after checking with them.

 

[Skywatcher2001]

I took @BigAl07 advice and purchased my insurance thru AMA . . . $660 for the year (two birds).

 

[SethB]

Apples & oranges & strawberries & bananas…

What an insurer cares about for liability insurance is business vs. personal use of property, and the kinds of exposures that follow. A Pt. 107 certificate or drone registration would seem to have little bearing. Are you operating as a business? Does the business have income? Do you complete a Schedule C on your federal taxes? Have you organized a business as a sole proprietor, under a DBA, as an LLC, a corporation, etc.?

Likewise for insurance of personal property against theft/loss/damage…

If you want business insurance you’ll find many providers! Including the AMA-affiliated commercial insurer @Skywatcher2001 listed.

You might want to consider letting your personal/homeowner insurer know that you are a rec drone flyer, and will pursue business liability insurance when the time comes. Talk it over with your agent, it may be that State Farm’s personal/homeowners policy is adequate for today… or maybe not!

PS. On rereading the original post I see that the focus is on insurance of personal property. This is small potatoes compared to the liabilities of running a business, where someone may be injured, or others’ property may be damaged, or a venue or property owner may required that you supply a Certificate of Insurance with them as a named insured.

These and more are considerations when organizing a small business, lots to learn.

 

[Chaosrider]

I took @BigAl07 advice and purchased my insurance thru AMA . . . $660 for the year (two birds).

I may end up doing that too, although that's a way bigger hit than I'm looking to spend right now.

I assume that includes liability, and not just loss/damage to the birds?

Right now I'm just looking for loss/damage coverage on the FPV. My Mini-2s and my Mini-SE are all under Care Refresh, and I'm content to let my Mini-1 go without, given the low value.

Thx!

 

[Skywatcher2001]

I may end up doing that too, although that's a way bigger hit than I'm looking to spend right now.

I assume that includes liability, and not just loss/damage to the birds?

Right now I'm just looking for loss/damage coverage on the FPV. My Mini-2s and my Mini-SE are all under Care Refresh, and I'm content to let my Mini-1 go without, given the low value.

Thx!

Yes, my insurance is full coverage (for the M3 and the Air2s). I use it for work so I got my company to pay for it. You can structure the insurance for your needs.

 

[Chaosrider]

Apples & oranges & strawberries & bananas…

What an insurer cares about for liability insurance is business vs. personal use of property, and the kinds of exposures that follow. A Pt. 107 certificate or drone registration would seem to have little bearing. Are you operating as a business? Does the business have income? Do you complete a Schedule C on your federal taxes? Have you organized a business as a sole proprietor, under a DBA, as an LLC, a corporation, etc.?

Likewise for insurance of personal property against theft/loss/damage…

If you want business insurance you’ll find many providers! Including the AMA-affiliated commercial insurer @Skywatcher2001 listed.

You might want to consider letting your personal/homeowner insurer know that you are a rec drone flyer, and will pursue business liability insurance when the time comes. Talk it over with your agent, it may be that State Farm’s personal/homeowners policy is adequate for today… or maybe not!

PS. On rereading the original post I see that the focus is on insurance of personal property. This is small potatoes compared to the liabilities of running a business, where someone may be injured, or others’ property may be damaged, or a venue or property owner may required that you supply a Certificate of Insurance with them as a named insured.

These and more are considerations when organizing a small business, lots to learn.

Apples are great, strawberries and bananas good, oranges not so much...

;-)

Part of my uncertainty is the difference in what's commonly considered to be a business, which you describe above, and what the FAA considers to be commercial use, which is a much broader definition.

Does anyone know of any insurance claim situations where this specific distinction has been involved, and how they turned out?

For now I'm just focused on loss/damage insurance for the FPV.

Thx

 

[vindibona1]

I see things a bit differently in terms of insuring my drones though State Farm in terms of commercial vs recreational. I am a Part 107 holder, but at this time, for many reasons I fly recreationally 90+% of the time and stick to the recreationally rules when doing so. The way I see it, as I have State Farm insurance too, I acknowledge that they only cover recreational flight. So were I to have a crash flying recreationally I would have no issue filing a claim. It would be the same drones either way. But as the FAA says I can choose recreational or commercial on a per-flight basis, I don't see how that would be an unethical basis for obtaining insurance and then treating any incidents ethically. Were I to be flying commercially I would buy separate hull insurance on daily/monthly basis just as I purchase liability insurance.

I think if you're flying commercially the majority of the time then it's wise just to buy commercial insurance.

 

[Chaosrider]

Yes, my insurance is full coverage (for the M3 and the Air2s). I use it for work so I got my company to pay for it. You can structure the insurance for your needs.

Yeah, they should at least by my next call. I was just hoping to go with someone local.

Thx

 

[EpicFlight]

We all know how excessive the rules are about what counts as "Commercial" operation in the drone realm. Using your own drone to inspect your own roof counts as commercial.

Hmmmmmm..... I'm highly skeptical of this. If sarcasm, NM.

Generally there has to be an exchange in value between two people, with an expectation of performance, either verbally or written, as to what service the performing party must complete.

In the 1940s the Feds tried to pull this off taxing farmers for the food they grew for themselves, on the totalitarian idea that this affected the market, and is their domain.

Yeah, it does. So what? Gubmint don't own me and everything I do. Law was passed to tax my income, and is very specific about what that is. It most definitely doesn't say, "anything you do that you benefit from".

I think your safe inspecting your own roof without running afoul of it being treated as a commercial operation.

Unless you withhold the final progress payment to yourself for the work, and sue yourself for shoddy, incomplete service.

But then I'd venture you have much more serious concerns than how the FAA views your flight operations

 

[Chaosrider]

I see things a bit differently in terms of insuring my drones though State Farm in terms of commercial vs recreational. I am a Part 107 holder, but at this time, for many reasons I fly recreationally 90+% of the time and stick to the recreationally rules when doing so. The way I see it, as I have State Farm insurance too, I acknowledge that they only cover recreational flight. So were I to have a crash flying recreationally I would have no issue filing a claim. It would be the same drones either way. But as the FAA says I can choose recreational or commercial on a per-flight basis, I don't see how that would be an unethical basis for obtaining insurance and then treating any incidents ethically. Were I to be flying commercially I would buy separate hull insurance on daily/monthly basis just as I purchase liability insurance.

I think if you're flying commercially the majority of the time then it's wise just to buy commercial insurance.

Ethically that's fine, but if the drone is registered under 107, even if the particular flight is recreational, I can see an insurance company trying to deny a claim on that basis, if the policy was a "personal" policy. Insurance companies have been known to do that kind of thing...

My issue is that I can see myself using footage from any video that I take to promote my as-yet-embryonic drone business, if the footage is any good.

For me, I can't see worrying about trying to keep the flights rigidly separated somehow, and I just assume 107 in every case. YMMV.

Of course, I haven't seen those rates yet...

Thx

 

[EpicFlight]

Part of my uncertainty is the difference in what's commonly considered to be a business, which you describe above, and what the FAA considers to be commercial use, which is a much broader definition.

Consider this, a bona-fide real situation that occurs regularly: Take video of your house, post to YT as a publicly available video, "I love my house". FAA has no problem with that, considers it recreational.

Take that same video, give it to your real-estate agent to use on their website to help sell your house, and now you need to have had a 107 cert when you shot it.

 

[Chaosrider]

Hmmmmmm..... I'm highly skeptical of this. If sarcasm, NM.

Generally there has to be an exchange in value between two people, with an expectation of performance, either verbally or written, as to what service the performing party must complete.

In the 1940s the Feds tried to pull this off taxing farmers for the food they grew for themselves, on the totalitarian idea that this affected the market, and is their domain.

Yeah, it does. So what? Gubmint don't own me and everything I do. Law was passed to tax my income, and is very specific about what that is. It most definitely doesn't say, "anything you do that you benefit from".

I think your safe inspecting your own roof without running afoul of it being treated as a commercial operation.

Unless you withhold the final progress payment to yourself for they work, and sue yourself for shoddy, incomplete service.

But then I'd venture you have much more serious concerns than how the FAA views your flight operations

As far as I know, the FAA has been entirely reasonable about it, and I expect that to continue.

But will the insurance companies push any excuse not to cover a claim? It wouldn't be the first time...

I maybe worrying about it excessively, but I'm going to go ahead and get the commercial coverage...and then I'll stop worrying about it at all!

 

[Chaosrider]

Consider this, a bona-fide real situation that occurs regularly: Take video of your house, post to YT as a publicly available video, "I love my house". FAA has no problem with that, considers it recreational.

Take that same video, give it to your real-estate agent to use on their website to help sell your house, and now you need to have had a 107 cert when you shot it.

I've already got my 107, so that I don't need to worry about!

 

[vindibona1]

Ethically that's fine, but if the drone is registered under 107, even if the particular flight is recreational, I can see an insurance company trying to deny a claim on that basis, if the policy was a "personal" policy. Insurance companies have been known to do that kind of thing...

My issue is that I can see myself using footage from any video that I take to promote my as-yet-embryonic drone business, if the footage is any good.

For me, I can't see worrying about trying to keep the flights rigidly separated somehow, and I just assume 107 in every case. YMMV.

Of course, I haven't seen those rates yet...

I get your point. But don't think State Farm is going to go to the FAA to see how your drone is registered? If they could look up the registration, what difference does it make if in fact you are flying recreationally. Or, conversely, if they don't have film or data to show otherwise how could they challenge it, unless the circumstances are so obvious that the flight wasn't recreational. But that's logic in an illogical world. I think it would be interesting to know what percentage of the time Part 107 pilots fly recreationally. I would guess that it might be a higher percentage of time than we might guess. In my case I don't have any projects planned for some time, yet with the warmer weather I am out practicing regularly, often not even turning the camera on.

 

[Starz]

Using your own drone to inspect your own roof counts as commercial.

I would wonder if that would hold up in front of a judge.

 

[spsphotos]

Consider this, a bona-fide real situation that occurs regularly: Take video of your house, post to YT as a publicly available video, "I love my house". FAA has no problem with that, considers it recreational.

Take that same video, give it to your real-estate agent to use on their website to help sell your house, and now you need to have had a 107 cert when you shot it.

Not 100% accurate. If your YT channel is monitized then it’s considered part 107. Again. Intent at time of flight is the primary factor.

 

[GrayHornet]

As far as I know, the FAA has been entirely reasonable about it, and I expect that to continue.

But will the insurance companies push any excuse not to cover a claim? It wouldn't be the first time...

I maybe worrying about it excessively, but I'm going to go ahead and get the commercial coverage...and then I'll stop worrying about it at all!

Insurance companies operate on a profit model. They do scrub their contracts to see if anything (even gray areas) can be used to deny coverage. I have sued many insurance companies on behalf of clients on contract interpretations. That's the conundrum for most individuals: it is worth it to challenge the issues and litigate versus the cost of litigation.

 

[jeff Voigt]

We all know how excessive the rules are about what counts as "Commercial" operation in the drone realm. Using your own drone to inspect your own roof counts as commercial.

But I wanted to get my new FPV insured (the DJI policy is way too expensive), so I checked with the local State Farm agent. They asked if it was going to be for personal or business use. I said that I hadn't made any money with it yet, but I hoped to eventually, so I guess it's business.

This is the response I got:

"Unfortunately in Nevada, we can only insure drones on personal articles policies if they are for personal use only. I contacted our underwriters, and they said if there is any business exposure, it is ineligible for State Farm."

So if you get a "Personal Article Policy" with a stipulation that the drone is for personal use, and you're operating a flight under 107 rules...you're probably not covered. Even if it's just registered under Part 107, it may not be covered.

Bummer. But, YMMV.

The agent was kind enough to point me to other agents in the area who do handle commercial drone insurance. I'll report back after checking with them.

That’s my experience with State Farm as well. And I do use them to insure my drone fleet (for recreational flight). As a 107 flyer you can legitimately change the nature of the flight while in flight. By this I mean you can launch for commercial purposes. Once the paid job is complete (and without landing) you can declare that you are flying recreationally.

 

[Milo187]

We all know how excessive the rules are about what counts as "Commercial" operation in the drone realm. Using your own drone to inspect your own roof counts as commercial.

But I wanted to get my new FPV insured (the DJI policy is way too expensive), so I checked with the local State Farm agent. They asked if it was going to be for personal or business use. I said that I hadn't made any money with it yet, but I hoped to eventually, so I guess it's business.

This is the response I got:

"Unfortunately in Nevada, we can only insure drones on personal articles policies if they are for personal use only. I contacted our underwriters, and they said if there is any business exposure, it is ineligible for State Farm."

So if you get a "Personal Article Policy" with a stipulation that the drone is for personal use, and you're operating a flight under 107 rules...you're probably not covered. Even if it's just registered under Part 107, it may not be covered.

Bummer. But, YMMV.

The agent was kind enough to point me to other agents in the area who do handle commercial drone insurance. I'll report back after checking with them.

Same sad story here in Maine.

 

[Chaosrider]

I get your point. But don't think State Farm is going to go to the FAA to see how your drone is registered? If they could look up the registration, what difference does it make if in fact you are flying recreationally. Or, conversely, if they don't have film or data to show otherwise how could they challenge it, unless the circumstances are so obvious that the flight wasn't recreational. But that's logic in an illogical world. I think it would be interesting to know what percentage of the time Part 107 pilots fly recreationally. I would guess that it might be a higher percentage of time than we might guess. In my case I don't have any projects planned for some time, yet with the warmer weather I am out practicing regularly, often not even turning the camera on.

Flying is so much fun for me that if money didn't matter to me, I'd just fly recreationally all the time. However, since I fully intend to use any decent footage I get to help market my embryonic drone business, they might all be considered commercial.

It's definitely a grey area. But I get insurance for peace of mind, and if I can't be sure about the effectiveness of the insurance, it sort of defeats the purpose...

;-)