Kiwis are being urged to check their home and contents policies following a report which suggests they could be missing out on loss, damage and third-party liability cover for their drones and e-bikes.
According to broker group NZbrokers, the insurance sector has lagged behind new technological developments and is eyeing certain “unknown” risks with increased caution, which may leave policyholders with unexpected gaps in their cover. In its recent analysis of the home contents policies available on the market, the group found “significant complexity and variation in the policy wording,” many of which left drone and e-bike owners unprotected.
NZbrokers says the issue mainly comes from policyholders assuming their gadgets will be treated the same way as a model aircraft or a push bike, not realising that the insurer is in fact looking at them in a very different way.
“While the insurer may cover your $5,000 push bike, many will not cover your e-bike of the same value because of terms of policy or the legal status of your e-bike,” NZbrokers partner services manager Simon Moss explained. “Similarly, a drone may be treated by insurers as a type of aircraft if it is capable of lifting more than its own weight – a criteria which is impossible for most consumers to measure.
“What this means is your drone may be covered for loss if you drop it while getting it out of the car, but if it falls from the sky while in use, you are on your own.”
Moss says the industry has a seen a precedent set by insurers in the 60s and 70s, where sporting goods were excluded from policies ‘while in use’ after they ended up forking out for bent golf clubs and damaged surfboards. A similar trend with laptops emerged later on, after insurers realised they were paying for better repair technology as the old software was no longer on the market.
Nonetheless, while some policies will exclude drones and e-bikes from their cover completely, others will set maximum standard limits – for example, home contents policies will still cover an e-bike if its output is under 300 watts.
“This is one source of potential confusion, as some e-bike motor manufacturers print their maximum input power on the motor because that number is larger, thus giving the impression the buyer is getting a more powerful motor,” said Moss. “Conversely, a customer may see ‘300 watts’ written on the motor but the bike may generate more power than this when in use. And if a drone happens to cause an accident while it is in use near a road, the owner will be left to foot the bill in most circumstances.”
Moss says customers should consult a broker if they are concerned about their level of cover.