Drone Insurance: Hull Coverage vs. Spare Parts
What’s the difference between hull coverage and spare parts coverage?
This blog post explores the key differences between hull coverage and spare parts coverage, two critical components of drone insurance policies. By understanding these distinctions, you can make informed decisions when selecting the right coverage for your specific needs.
Hull Coverage:
– Hull Coverage: Physical damage protection for the replacement value of the drone (plus the battery(s) in the drone) while in flight or not in flight.
– Full Flight coverage: Hull coverage is one of the primary coverages of drone insurance policies, offering comprehensive protection against various risks. Full flight coverage will cover the drone both while flying and while not in motion.
– Ground Not in Motion coverage: Not all companies offer this coverage but some do. This will cover your drone while the props are not moving under it’s own power. Once you turn on the controller and the props “flicker”, the drone is considered in motion and coverage would only apply with full flight coverage. This option is usually good for additional spare drones used for parts or someone starting a policy in the off-season.
– Covered perils: This coverage typically includes damage or loss resulting from crashes, collisions, fire, theft, acts of god, and other covered events.
– Financial protection: Hull coverage provides financial compensation for the agreed value of your drone (minus any applicable deductible) in the event of a covered loss. With drone policies, the insured gets to choose insured value of their equipment.
– Is this coverage required?: All policies can offer hull coverage but it is not a required part of the policy like the liability coverage is.
Spare Parts Coverage:
– Complements hull coverage: Spare parts coverage is an optional add-on to hull coverage designed to provide additional protection for your non-flying equipment.
– Specific coverage: This coverage specifically covers the cost of replacing damaged or stolen spare parts, such as propellers, batteries, and other essential components.
– Financial benefit: While hull coverage compensates for the overall value of the drone, spare parts coverage ensures that you can replace individual (non-flying) components without incurring significant out-of-pocket expenses.
– Cost-effective solution: Spare parts coverage can be a cost-effective way to protect your investment since covering the spares fully coverages all your equipment while also being a much cheaper premium than the hull coverage.
Choosing the Right Coverage:
The decision of whether to include spare parts coverage depends on several factors, including the value of your drone, the cost of individual components, and your risk tolerance.
Here are some key considerations:
-Deductibles: The physical damage section (Hull and Spares) is the only part of the policy where a deductible applies. Not all companies apply a deductible to spare parts but all companies apply deductibles to the hull coverage. Deductibles are a percentage of the value so it is something to keep in mind when choosing your limit.
– High-value components: If your drone or aircraft has expensive spare parts, such as specialized cameras, high-performance batteries, or generators; spare parts coverage can be a worthwhile investment.
-Lienholder: If you got a start-up loan for your drone operation, the bank supplying the loan may want to be named as a lienholder on the policy. They would want to see the total value of your drone and equipment listed on their lienholder certificate.
– Risk assessment: Evaluate your individual risk profile. If you operate in a high-risk environment or frequently engage in activities that could damage components, spare parts coverage can provide peace of mind.
– Cost comparison: Carefully compare the cost of adding spare parts coverage to your policy against the potential cost of replacing damaged components out of pocket.
VT Insurance Agency Expertise:
VT Insurance Agency is dedicated to providing comprehensive and tailored insurance solutions for drone and aviation enthusiasts. Our experienced team can help you understand your coverage options and select the right policy to meet your specific needs.
Contact us today for a free consultation and let us protect your passion for flight with the right insurance coverage.
