How to insure your Christmas drone

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Chances are, you or someone you know will be proudly piloting a brand new aerial drone into the new year.

In what it calls a “defining year” for unmanned, remote-controlled flying machines, the Consumer Technology Association projects that U.S. sales of hobby drones will top 700,000 this holiday season, a 63% increase over 2014.

Unfortunately, some new drone owners may have unwrapped more risk than they bargained for when they popped the lid on their airborne plaything.

“Almost no one is thinking about insurance coverage when they’re opening the box,” Chicago attorney Jeff Antonelli, who specializes in federal regulations for unmanned aerial systems, tells Bloomberg.

The exception: home insurance companies, one of which received federal approval for conditional drone use for underwriting, surveys, inspections and post-catastrophe damage assessment.

Is your policy drone-friendly?

While home insurance policies may cover the damage of a wayward drone crashing into a neighbor’s child, pet, home or vehicle, some policies do exactly the opposite by specifically excluding coverage for aviation-related claims, be they human or drone related. The Federal Aviation Administration currently classifies drones large and small as aircraft.

There’s equal uncertainty over where newbie drone pilots would stand as far as invasion of privacy liability claims in the ‘hood, with or without onboard cameras.

Talk about a buzz kill, right?

As you might guess, where there’s a risk, there’s an insurer. For just $75 per year, the 185,000 adult members of the Academy of Model Aeronautics hobbyist group enjoy $2.5 million in personal liability coverage and $25,000 in medical under a group plan from Westchester Surplus Lines Insurance, part of the ACE Group.

But depending on your home insurance to cover all things drone-related could be risky.

Where the insurers stand

Allstate, for instance, will cover the damage your drone causes to a neighbor’s home or auto, but not the “first party” toll a drone might take on your own home or vehicle, spokesman Justin Herndon told Bloomberg.

State Farm, however, vows to cover drone damage or injuries just like any other insured mishap. “Damages from drones pose nothing new in this regard,” says spokesman Chris Pilcic.

Boston attorney Matthew Henshon, who specializes in emerging technologies, predicts that city and state regulators will likely intervene in what he calls the current “balancing act between insurance and regulation” as drone use grows.

“If bad things are happening, someone is going to figure it out and step in from a regulatory standpoint,” he tells Bloomberg. “If enough damage is being done, someone is going to call their congressman.”

Or perhaps deliver a written complaint by drone.

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