With the popularity of non-commercial drones increasing exponentially it is interesting to consider how the insurance market is developing to meet the challenges of these new toys!
The Civil Aviation Safety Authority (CASA) states that “Unmanned aircraft can be broken down into two main groups. Those used for sport and recreation are called model aircraft, while any used for commercial purposes are called remotely piloted aircraft“
The definition of model aircraft is further refined to exclude balloons and kites and craft with an overall gross weight inclusive of fuel and equipment more than 25kg where further rules and regulations apply.
Operators of drones/model aircraft are required to comply with all the instructions and restrictions issued as part of the product documentation which should include prohibited flight:
- Closer than 30m to third party property without explicit permission
- Over populated areas
- Within a radius of 5.5kms of any aerodrome or similar area
- After daylight hours and always in line of sight
- Above 400ft
Using a model aircraft for any form of commercial gain including aerial photography for reward requires the operator to obtain certification from CASA and further rules/regulations apply.
Whilst the policy wordings vary from product to product domestic contents insurance typically provides third party liability in the following manner.If this policy covers your contents and the home is your primary residence, we insure you and any member of your family against any claim for compensation or expense which you or the member of your family become legally liable to pay for the death of or bodily injury to any person and /or the loss of or damage to property arising from an occurrence during the period of insurance anywhere in the world. However we do not insure you or your family against liabilities arising from the ownership, custody. or use of any aerial device or aircraft (except model aircraft or toy kites).
It is clear from this that the exclusion write back is key to avoiding dispute or in the worst case a denial of coverage arising out of the use of “Aircraft”. A review of a number of popular Home and Contents policies is tabled below and you will see that there are a number of variations regarding the write back (if any):
| Insurer | Exclusion | Write Back |
| Direct Insurers | ||
| AAMI – Home Contents Insurance A01464 11/02/14A | Aircraft | Remote controlled model or toy aircraft with a wingspan up 1.5 metres |
| Budget Direct – Home and Contents 0513a 28/5/2013 | Aircraft | None |
| Coles Home InsuranceCOLPDS95002_1114 1/11/2014 | Aircraft | Model aircraft with a wingspan less than 1.5 metres |
| YOUI – Home Insurance Youi-Home_0814 8/08/2014 | Aircraft | Remote controlled toy |
| Broker Distribution | ||
| Allianz – Classic Home POLO138BA_1014 18/10/2014 | Aircraft | Model aeroplane or toy kite |
| Calliden – Elite Care G1012_0115 1/1/20105 | Aircraft (includes model aircraft) | None |
| CGU – AD Home Insurance C0019-F_REV4_0314-CV398-F_REV1_0914 | Aircraft | Model or toy aircraft |
| Chubb – Masterpiece 0414 21/04/2014 | Aircraft | None |
| QBE – Essentials QM715-1213 | Aerial device or aircraft | Model aircraft or toy kites |
| Vero – Secure Home Elite V3436_0114E 31/01/2014 | Aircraft | Remote controlled model or toy aircraft with a wingspan up 1.5 metres |
We are not suggesting that insurers without any specific write back would necessarily apply the broader definition of Aircraft (i.e. a machine capable of flight) but as always it highlights the importance of good advice and paying attention to the fine print!
This article is not intended to give insurance advice and it should be noted that rules and regulations may vary from place to place regarding the use of model aircraft. Always check the insurance policy and if in doubt refer to your broker for guidance.
For further information on our Policy Drafting and Review services please contact:
Steve Manning | Call 1300 LMI GROUP | steve.manning@lmigroup.com | www.lmigroup.com
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