“As the use of drones has increased, we realized there was a gap in coverage,” says Brent Van Roekel, underwriting director, Nationwide Agribusiness Insurance Co., Des Moines, Iowa. “Insurance policies farmers and agribusinesses have typically excluded liability coverage for aircraft. To keep up with the technology and with customers’ needs, we needed to address that issue. We want to make sure our customers are covered appropriately.”
Drones are an issue some insurance companies haven’t wanted to tackle. “Some insurance companies indicated they’re not interested in covering drones mostly because of the privacy aspects you might potentially have,” he said. “We recognize that potential exists but, based on the quality of our customers, we feel it’s a smaller risk. We see the use of drones as becoming essential for the ag economy, so we need to be able to provide a solution.”
Nationwide Agribusiness began writing coverage for customers using drones at the end of 2013. “It’s not a separate policy,” Van Roekel explained. “It’s an endorsement we add to the policy we’re already providing for those customers.”Nationwide Agribusiness is not charging for this added coverage. “Since our customers are mainly using drones for crop scouting, we see this as an extension of their agronomy operation. Our feeling is this is a coverage farmers and ranchers need to fully protect that part of their business,” Van Roekel said. “We essentially built it into the agronomy piece of the coverage and are not charging an additional premium.”
Property insurance would generally include both liability and physical damage coverage on the devices. “The drones we’re seeing in use by farmers and even by agribusinesses, like co-ops, typically cost under $5,000 today, so we’re only offering liability coverage. We’re not getting requests to insure the drone itself,” Van Roekel explained. “Customers have been more interested in the liability piece. Of course, that could change as drones become larger and more expensive.”As farms, ranches and agribusinesses move toward bigger and more expensive equipment and drone usage expands into areas like fertilizer and chemical application, the price structure could change.
“For the $3,000 drones doing crop scouting today, I don’t see a charge for that in the near future,” Van Roekel said. “As the industry develops and farmers and agribusinesses become more reliant on drones, I think you’ll start to see some additional charges for coverage.”
“As with all our coverages, our drone coverage will change as the industry and our customers’ operations change,” Van Roekel said. “We’re trying to stay far enough in front of our customers’ needs so we can help protect their assets, and they’re not behind the curve.”
Nationwide Agribusiness Insurance Company is a member of Nationwide®. Nationwide Agribusiness, rated A+ (Superior) by The A.M. Best Company, is the country’s #1 insurer of farms and ranches, and a leading insurer of commercial agribusiness, and related businesses in the food and fiber chain.
Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world. The company provides a full range of insurance and financial services, including auto, motorcycle, boat, homeowners, life, farm, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions, long-term savings plans and health and productivity services.