CYA: Drone insurance by Verifly starts at just $10 per flight
Quadrocopter drone flying in the sky in a park in Miami.
It's all fun and games until your neighbors sue you for accidentally crashing a drone into their kids or violating their privacy. Starting on Monday, a new company called Verifly has a solution: an app that arranges on-demand drone insurance. Both recreational and commercial pilots can sign up for the service, which starts at just $10 per flight.
Verifly was cofounded by Jay Bregman and Eugene Hertz, two drone enthusiasts who know a thing or two about running successful startups. Bregman sold the majority stake of his ride hailing app Hailo to Daimler and Hertz founded ecommerce site Quidsi (diapers.com, soap.com, beautybar.com), which sold to Amazon for $540 million.
When Bregman left Hailo, he wanted to get back into his old hobbies, which included flying and building RC planes. We spoke with him to learn more about his latest business venture.
"I realized very quickly that at this time -- 2014, 2015 -- there weren't really any RC planes going on," he tells ZDNet. "It was really all about drones. So I got into the community and really got the bug."
Image: Verifly
As he got into the drone scene, he realized that flying posed many risks. "There was always something that was inherent in the fact that you were flying a motorized vehicle," he said, "that it might crash, that it might malfunction and something might happen, in the same way as a car."
To get Verifly off the ground, they raised $2.7 million led by Slow Ventures, where Facebook alum Sam Lessin is a partner. "He is an absolute drone fanatic," says Bregman. "He has been working with us for a very long time to get our product out there. His only wish was to be the first person that could buy it."
How it worksWhen you open the app, it will calculate a rate based on your location's geospatial risks and environmental factors, such as wind, which can make a big difference in the ability to control a drone. When you accept the rate, you'll be covered within a quarter of a mile from the location. Rates start at $10 for a million dollars' worth of third party liability coverage.
"There's no approval process," says Bregman. "You just put in a credit card and you've bought a policy that is underwritten by a leading provider of aviation insurance."
The insurance also covers $10,000 worth of invasion of privacy, which is quickly becoming a hot topic as now even casual drone users can take decent photos and videos from the sky and publish them on Youtube or social media.
The on-demand model will likely appeal to many recreational users who just want short-term coverage for their personal assets. Commercial pilots, however, aren't such an obvious customer for an unconventional insurance model. What happens, for example, when a 7-Eleven drone accidentally spills coffee on someone?
"Yes, of course, we will have solutions to cover that," says Bregman. "The ultimate aim here is to build a fabric and a service of insurance that can be used for any drone and any plane."
Although there has been plenty of hype around future drone delivery services, most of today's commercial users are focused on photography and videography for real estate or weddings. They aren't flying very frequently, so they'll usually just forgo the expensive annual policies that have previously been available.
According to Bregman, 82 percent of commercial drone operators are currently uninsured. Plus, he says, "This model just works a lot better both economically and practically because they don't have to go through the whole application process."
Verifly exclusively focuses on drone insurance, which has a unique risk profile that only a true insider could understand, and Jay Bregman is a drone fanatic. In his own words:
I have...I had a problem because my girlfriend has created this room in our house where there are just big stacks of drone boxes, and every day I get threatened with basically moving some of them out. I have all of the latest: DGI Inspire, DGI Phantom, the 3DR Solo. There's pretty much none that I don't have.