Update: State Farm Drone Insurance

Chaosrider · May 42022

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 yetbut I hoped to eventuallyso I guess it's business.

This is the response I got:

"Unfortunately in Nevadawe can only insure drones on personal articles policies if they are for personal use only. I contacted our underwritersand they said if there is any business exposureit is ineligible for State Farm."

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

Bummer. ButYMMV.

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 · May 42022

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

SethB · May 42022

Apples & oranges & strawberries & bananas…

What an insurer cares about for liability insurance is business vs. personal use of propertyand 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 proprietorunder a DBAas an LLCa corporationetc.?

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 flyerand will pursue business liability insurance when the time comes. Talk it over with your agentit 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 businesswhere someone may be injuredor others’ property may be damagedor 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 businesslots to learn.

Chaosrider · May 42022

Skywatcher2001 said:
I took @BigAl07 advice and purchased my insurance thru AMA . . . $660 for the year (two birds).

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

I assume that includes liabilityand 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 Refreshand I'm content to let my Mini-1 go withoutgiven the low value.

Thx!

Skywatcher2001 · May 42022

Chaosrider said:
I may end up doing that tooalthough that's a way bigger hit than I'm looking to spend right now.

I assume that includes liabilityand 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 Refreshand I'm content to let my Mini-1 go withoutgiven the low value.

Thx!

Yesmy 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 · May 42022

SethB said:
Apples & oranges & strawberries & bananas…

What an insurer cares about for liability insurance is business vs. personal use of propertyand 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 proprietorunder a DBAas an LLCa corporationetc.?

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 flyerand will pursue business liability insurance when the time comes. Talk it over with your agentit 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 businesswhere someone may be injuredor others’ property may be damagedor 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 businesslots to learn.

Apples are greatstrawberries and bananas goodoranges not so much...

;-)

Part of my uncertainty is the difference in what's commonly considered to be a businesswhich you describe aboveand what the FAA considers to be commercial usewhich is a much broader definition.

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

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

Thx

Skybuyer · May 42022

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 holderbut at this timefor many reasons I fly recreationally 90+% of the time and stick to the recreationally rules when doing so. The way I see itas I have State Farm insurance tooI 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 basisI 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 · May 42022

Skywatcher2001 said:
Yesmy 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.

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

Thx

EpicFlight · May 42022

Chaosrider said:
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 sarcasmNM.

Generally there has to be an exchange in value between two peoplewith an expectation of performanceeither verbally or writtenas 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 themselveson the totalitarian idea that this affected the marketand is their domain.

Yeahit does. So what? Gubmint don't own me and everything I do. Law was passed to tax my incomeand 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 workand sue yourself for shoddyincomplete service.

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

Chaosrider · May 42022

vindibona1 said:
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 holderbut at this timefor many reasons I fly recreationally 90+% of the time and stick to the recreationally rules when doing so. The way I see itas I have State Farm insurance tooI 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 basisI 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 finebut if the drone is registered under 107even if the particular flight is recreationalI can see an insurance company trying to deny a claim on that basisif 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 businessif the footage is any good.

For meI can't see worrying about trying to keep the flights rigidly separated somehowand I just assume 107 in every case. YMMV.

Of courseI haven't seen those rates yet...

Thx

EpicFlight · May 42022

Chaosrider said:
Part of my uncertainty is the difference in what's commonly considered to be a businesswhich you describe aboveand what the FAA considers to be commercial usewhich is a much broader definition.

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

Take that same videogive it to your real-estate agent to use on their website to help sell your houseand now you need to have had a 107 cert when you shot it.

Chaosrider · May 42022

EpicFlight said:
Hmmmmmm..... I'm highly skeptical of this. If sarcasmNM.

Generally there has to be an exchange in value between two peoplewith an expectation of performanceeither verbally or writtenas 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 themselveson the totalitarian idea that this affected the marketand is their domain.

Yeahit does. So what? Gubmint don't own me and everything I do. Law was passed to tax my incomeand 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 workand sue yourself for shoddyincomplete service.

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

As far as I knowthe FAA has been entirely reasonable about itand 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 excessivelybut I'm going to go ahead and get the commercial coverage...and then I'll stop worrying about it at all!

Chaosrider · May 42022

EpicFlight said:
Consider thisa bona-fide real situation that occurs regularly: Take video of your housepost to YT as a publicly available video"I love my house". FAA has no problem with thatconsiders it recreational.

Take that same videogive it to your real-estate agent to use on their website to help sell your houseand now you need to have had a 107 cert when you shot it.

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

Skybuyer · May 42022

Chaosrider said:
Ethically that's finebut if the drone is registered under 107even if the particular flight is recreationalI can see an insurance company trying to deny a claim on that basisif 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 businessif the footage is any good.

For meI can't see worrying about trying to keep the flights rigidly separated somehowand I just assume 107 in every case. YMMV.

Of courseI 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 registrationwhat difference does it make if in fact you are flying recreationally. Orconverselyif they don't have film or data to show otherwise how could they challenge itunless 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 timeyet with the warmer weather I am out practicing regularlyoften not even turning the camera on.

Starz · May 52022

Chaosrider said:
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 · May 52022

EpicFlight said:
Consider thisa bona-fide real situation that occurs regularly: Take video of your housepost to YT as a publicly available video"I love my house". FAA has no problem with thatconsiders it recreational.

Take that same videogive it to your real-estate agent to use on their website to help sell your houseand 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 · May 52022

Chaosrider said:
As far as I knowthe FAA has been entirely reasonable about itand 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 excessivelybut 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 · May 52022

Chaosrider said:
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 yetbut I hoped to eventuallyso I guess it's business.

This is the response I got:

"Unfortunately in Nevadawe can only insure drones on personal articles policies if they are for personal use only. I contacted our underwritersand they said if there is any business exposureit is ineligible for State Farm."

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

Bummer. ButYMMV.

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 · May 52022

Chaosrider said:
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 yetbut I hoped to eventuallyso I guess it's business.

This is the response I got:

"Unfortunately in Nevadawe can only insure drones on personal articles policies if they are for personal use only. I contacted our underwritersand they said if there is any business exposureit is ineligible for State Farm."

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

Bummer. ButYMMV.

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 · May 52022

vindibona1 said:
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 registrationwhat difference does it make if in fact you are flying recreationally. Orconverselyif they don't have film or data to show otherwise how could they challenge itunless 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 timeyet with the warmer weather I am out practicing regularlyoften not even turning the camera on.

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

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

;-)

Update: State Farm Drone Insurance

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