Drone Insurance Said to be Set to Drive Industry

Written by Business Success on . Posted in Aircraft liability insurance, Aviation insurance, Aviation insurance agency

Global aviation insurance

Since they were invented and introduced, the popularity of drones has exploded. In the United States, the number of drones is expected to go up from 2.5 million drones in 2016 to as many as seven million in 2020. Accordingly, aircraft insurance brokers are saying that the market for drone insurance is expected to expand dramatically. It is expected to grow tremendously. Recently, the Insurance Journal hosted a webinar, “Drone Insurance: Coverages, Hazards, and Claims” to address this fast-growing part of the aviation insurance industry.

The webinar featured Chris Proudlove (Global Aerospace), Kathleen Swain (AOPA), and Shan Rogers (RT Specialty Aviation, LLC). All three believe that drone insurance will be responsible for the largest amount of growth in this industry in a half of a century.

The first topics the trio tackled were the basics of drone insurance. They pointed out that aircraft insurance brokers deal with drones that are commercially owned, such as the ones used by Amazon to deliver products and the ones that are owned by hobbyists for a variety of uses. A drone insurance policy can cover several things. It can cover the entire drone but a policy can also be written up to deal with the ground equipment on the drone and the sensors or other components.

Both the commercial and hobbyist drone markets have been on the rise as more and more people and companies find reasons they want to use drones. Because they have cameras on them now, this was not always a feature that was offered, there are also privacy and general liability issues that need to be dealt with by aircraft insurance brokers. In some ways, issuing drone insurance policies is more complicated than issuing insurance for airplanes. When you are looking at insurance for drones, you also have to take into consideration the data that is being taken in by the drone.

Next, the group addressed the actual size of the market for drones and for insurance for drones. While the experts sais that it is challenging to put a dollar figure on the market right now, it is easy to see that the largest market for drones and insurance policies for them is in the United States. That is also where the vast majority of aircraft insurance brokers who handle this kind of insurance are located in the United States.

They agreed that the percentage of the market that is taken up by drones is very small right now, the potential to grow is enormous as these devices spread to usage in Europe, Asia, and Africa. Not only that but the number of things they can be used for is only going to expand. From even a humanitarian perspective, it is easy to see how drones could be used to get food, water, and medical supplies to remote areas in the developing world that are virtually inaccessible any other way.

The next important topic they discussed was how people can get this kind of insurance. As with other kinds of aviation insurance, aircraft insurance brokers ask people to complete an application. Some of the information they require is information about the drone. They need to get the serial number, year, make, and model of the drone that will be listed on the policy. In addition to that, they need to know what it is going to be hauling around and all of the same information for the gimbal. The FAA has a special certification for drones that owners need to have in order to qualify for insurance policies for it. The aircraft insurance brokers then work out the quotes for physical damage to or caused by the drone and any liability quote that might be needed. The aircraft insurance brokers also work with the owners of the drones, this is mainly for the hobbyists with drones, to make sure they are using them in compliance with FAA regulations.

In today’s aviation insurance market, the number of drone policies sold by aircraft insurance brokers makes up an incredibly small percentage of their overall policy sales. The expectation is that as the market for drones grows exponentially, so too will the market for drone insurance policies.

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