With Christmas approaching, many of you may be considering purchasing a drone as a gift. While that may seem like a great idea at first, you may want to rethink that particular present.
Not to be a Scrooge, but we want you to be aware that drones are considered to be unmanned aircraft. That means they are excluded from most if not all homeowners insurance policies by the aircraft exclusion. In a crash, although the damage to the drone itself will most likely be less than your deductible, the real issue is from a liability perspective for any bodily injury or property damage that the drone causes.
Before we look at an example scenario, here’s an example of a standard exclusion:
Section 2 Liability excludes coverage for aircraft with the limited exception of model aircraft. Personal Liability and Medical Payments to Others do not apply to injury or damage:
[A]rising out of the ownership, maintenance, use, loading or unloading of:
This does not apply to model aircraft. Any aircraft designed for carrying persons or cargo (think camera) is not a model aircraft.
A Not So Merry Christmas
Imagine it’s early morning on December 25. Little Johnny just unwrapped his new drone, complete with a hookup for his smartphone. Just like Ralphie in “A Christmas Story” with a newly unwrapped Red Ryder BBGun, Johnny rushes out the door to try out his new toy. The only problem is that Johnny’s new toy isn’t a toy at all. It’s actually got some weight to it, and Johnny isn’t exactly a top-flight pilot.
Five minutes into first flight, Johnny loses control of his drone, and it crashes into not the neighbor’s car or house, but into the neighbor’s son. Now what? Quite possibly, the resulting injury and legal expenses Johnny’s parents will incur could be significant and not covered by their insurance policy.
Without question, drones can be fun. They can even be a useful tool for your organization. Just make sure you understand whether you have proper coverage so that your holidays stay merry and bright. Talk to your BXSI agent and ask if you’re ready for takeoff.
Lou Fey holds the Chartered Property Casualty Underwriter (CPCU), Certified Insurance Counselor (CIC), Certified Risk Manager (CRM), and Associate in Claims (AIC) designations. For more than three decades, Lou has established himself as an insurance expert witness and consultant. He acts as a claim advocate to clients and ensures insurance companies provide fair treatment. He also makes certain lawsuits are properly defended.
Not a Deposit.
Not Insured by any Government Agency.
Not Guaranteed by the Bank.
Not a Condition of Any Bank Loan, Product or Service.
Always refer to your policy for exact coverage terms and conditions.
Services provided by BancorpSouth Insurance Services, Inc. are supplemental to the insurance carrier and your legal counsel.
© Fintactix, LLC 2015