Popular and inexpensive, drones pose a number of risks for users. What’s their future in the insurance industry?
Are drones a niche market? Think again! Back in 2016, American sources were reporting that drones sales had tripled, reaching 2.5M units sold. According to a report by the American Federal Aviation, drones sales could amount to 7 million units in 2020 in the USA alone, with a global market that could go up to 13 billion USD.
Drones have become a coveted gift by virtue of its reasonable cost and the vast airspace Canada affords.
Corporations are also looking at the potential of unmanned aerial vehicles (UAVs). Logistics giant Amazon has tested delivery by drone in Canada, and the second use of drones, after photography, is by the real estate industry.
A complex situation
Even if drone sales are rising and even if they’re a trendy birthday gift, drone use poses a number of problems in Canada at a number of different levels. This is made obvious by the number of fines given across the country and an incident last year between a plane and a drone illegally flying too close to the Quebec City airport.
In fact, Transport Canada has stipulated that drones are aircrafts and are subject to the same rules. They must therefore follow Canadian Aviation Regulations and respect the Criminal Code as well as municipal, provincial and territorial regulations relating to the invasion and the right to privacy. For example, this means not flying a drone closer than 150 metres from a person, animal, building, structure or vehicle and getting a permit to fly in certain zones, depending the drone category and not flying closer than 5.5 km kilometres to an airport.
An activity that carries risk and the need for insurance
The insurance industry and Transport Canada consider drones to be aircraft. They are subject to limitations already in place.
While some insurers cover miniature airplanes and helicopters, these do not have the same status as drones. For most insurers, including belairdirect, drones are not insurable at the moment as losses due to the operation of an aircraft are excluded under our personal policies (for commercial purposes some types of protection are available on the market).
There is currently no insurance available to cover breakage or injury caused by a drone. Consequently, a person who loses control of a drone is entirely responsible for damages caused by the drone and is liable for such in the event of a lawsuit. The regulations in place should therefore be respected and users should be very conscious of the risks when they are using one of these machines.
A trend that is here to stay
Given the current situation, the industry is looking at various solutions. In time, a means for insuring drones and the damage they may cause will no doubt be found because they will likely soon be considered a normal family possession. This is indeed an issue to follow closely!