Update: State Farm Drone Insurance

[Milo187]

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.

Not sure that would pass the sniff test in a claim.

 

[EpicFlight]

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.

Still 100% accurate.

If your channel is monetized, then your not doing what I said. You're publishing it to make money, not just share with the world how much you love your house.

 

[Chaosrider]

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

Dunno.

Probably, some judges yes, and some judges no.

The only cases I've heard about on this fuzzy edge revolve around real estate photography, and in those cases it's usually pretty blatantly commercial.

Do any of you know of any specific cases around this issue? The whole recreational/commercial edge issue, not just looking at your roof.

Thx!

 

[okw]

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.

Since it's the intent of the flight at the time it was taken that matters to the FAA, there's an easy way around the real estate agent issue you mention. Give them videos of your house that you took a year ago. You know, the ones you put on YouTube just to show people how much you loved your house. No Part 107 needed.

 

[WDKZoom]

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.

Please do report back, I am in Nevada as well not looking to fly commercially but for sure wanting a replacement should one of those unspeakable events occurs.

WDK

 

[Chaosrider]

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.

Exactly right.

If a claim gets denied...even if it's wrongly denied...you can easily spend more to fight it, than the value of most of the drones that we fly.

I'd prefer to get a policy after telling an agent exactly what I'm currently doing and plan to do, than hope for the best in terms of fuzziness in the law and policy language.

TCS

 

[Chaosrider]

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.

And if an insurance company says, "Sorry, we're not buying that." in response to a claim that you make, you then do what, exactly?

They don't have to be right to make fighting a claim denial cost you more than the value of the claim. For them, it's about precedent and statistics, and it's in their financial interest to deny whenever they think it's likely they can get away with it.

If I owned stock in an insurance company, that's what I'd want them to do.

 

[HoozierDroneDaddy]

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.

When I checked with SF a while back, they said regardless if it is used for Recreation, if at any time that drone is used commercially, then they would not cover it even on a recreational flight.

 

[jeff Voigt]

Exactly right.

If a claim gets denied...even if it's wrongly denied...you can easily spend more to fight it, than the value of most of the drones that we fly.

I'd prefer to get a policy after telling an agent exactly what I'm currently doing and plan to do, than hope for the best in terms of fuzziness in the law and policy language.

TCS

I list a M2P a couple of years ago due to battery failure. It was a recreational flight. One call to State Farm and a check was cut for total replacement. I was able to sell the damaged drone for spare parts to Rob Schwartz at Thunderdrones (an outstanding and honorable repair tech). I called State Farm and asked that they reduce the claim by the amount of money Rob paid me for spare parts. They appreciated the honesty but still paid a check to me for full replacement.

They insure 2 M3’s, 1 Inspire 2, and 1 V-Coptr for a total of $160 per year.

 

[Chaosrider]

When I checked with SF a while back, they said regardless if it is used for Recreation, if at any time that drone is used commercially, then they would not cover it even on a recreational flight.

That's completely consistent with what State Farm just told me.

 

[Dbez1]

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.

I’m with you on that logic vindi but I’m not an attorney.

 

[vindibona1]

I’m with you on that logic vindi but I’m not an attorney.

I'm not an attorney either, but I have studied business law and it seems to have served me well for over 35 years of running a business.

I get both sides of the equation, but I think there is a question or two and situation that lies in the background. How can one disavow Part 107 credentials, when they are no longer doing business commercially? Uniike my business pathway that started as a C-Corp, changed to an S-Corp and eventually became a sole proprietor, and due to many reasons become inactive commercially (largely due to COVD and health reasons?). I'm sure there must be a way to cancel your Part 107 cert, but is there a need? And then, should COVID end and one return to health, what then?

Additionally, if you use the FAA as an example of reason, determining whether or not your flight is recreational vs commercial is INTENT at the time of flight, why could you not use the same logic should an insurance claim ever come up? If the government says it's intent at the time of flight, I think there is a strong case there that should hold during a legitimate insurance claim. But it is important to note that insurance adjusters' job is to NOT pay claims. Some companies are easier than others. Just sayin'.

 

[ArnieZiffel]

I would caution against using State Farm for any kind of liability insurance. If you're found liable, regardless of the circumstances, you'll probably find yourself served with a lawsuit, like the guy who rear-ended my wife three years ago. We go to court in August.

 

[Dbez1]

State Farm is definitely not liability insurance. I got that from the “horse’s month” so to speak. It’s strictly personal property insurance for recreational flights.

 

[Rich QR]

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.

The FAA regulations for Part 107 don't address whether a flight is commercial. The regulations do not even mention the word "commercial". Nor does the recreational exception, section 44809. A Part 107 license doesn't say "commercial" on it. Part 107 is NOT for commercial flight. It covers flight for ANY purpose, regardless of whether money exchanges hands, or you gain anything of value, or you're flying just for fun.

Section 44809 is available only if the flight is "for strictly recreational purposes". So any flight that doesn't meet the "strictly recreational purposes" limitation must be flown under Part 107. But failure to meet the "strictly recreational purposes" limitation doesn't necessarily mean the flight is commercial.

All commercial drone flight must be conducted under Part 107, but not all Part 107 flight is commercial. Flying commercially is only one of the ways you can fall outside of the "strictly recreational" limitation.

I'd say that inspecting your own roof is not a commercial venture. You can't make a living off of inspecting your own roof. But it's arguably outside of the "strictly recreational" definition. Inspecting your neighbor's roof in exchange for having your neighbor let you borrow his hedge trimmer is further outside of the "strictly recreational" definition, while still not falling into any reasonable definition of "commercial" activity, IMO.

Your insurance company cares whether a flight is commercial. The FAA, in deciding whether a flight fits into 44809, cares whether a flight is "strictly recreational" or not.

 

[mick_mc]

I see this in the photography world all the time, is your $3,500 camera with a $2,000 lens hanging on it that was stolen covered by your homeowner's policy or not? It absolutely depends on the insurance company, some will pay right up and others will point to the print you have for sale for $25 as proving it's a business and not pay. It may even come down to the claim adjuster that is assigned to your claim. Feel like taking a chance?

 

[NorthEastJohn]

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

I used PPA for equipment. Need to be a member, annual cost is $323 and added drone liability for $20,000 worth of equipment is $282. total annual cost is $606. Includes replacement value for all my drones and peripheral lenses and sensors. Includes theft and unknown theft. 200 deductible per claim. Does not include liability. 1Mil liability though Lockton affinity is 530 per year.

 

[stevenws]

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.

Good analogy - thanks

 

[Robert Droner]

All commercial drone flight must be conducted under Part 107, but not all Part 107 flight is commercial. Flying commercially is only one of the ways you can fall outside of the "strictly recreational" limitation.

Well said sir.

 

[skycam509]

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 SF insurance is a sweet deal! I have my Air 2s, Mini 2, iPad Mini 6, and other accessories on the policy for $75/yr with zero deductible. My agent said I still had some room left on the policy if I wanted to add anything else. I added about $3000 worth of guitars, which finally cracked the threshold and raised my premium slightly to $82/yr. As you mentioned, the coverage is only for recreational use and does not include any liability coverage.