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eVTOL Insurance: The industry, Challenges and Insurance Considerations

10 min read
February 1, 2023
eVTOL Insurance: The industry, Challenges and Insurance Considerations

The sweeping eVTOL fever that seems to be taking the world by storm is definitely no joke. As we make our way into the future, we stand witness to the rapid changes in all fields, including in the aircraft and transportation industry. 

Currently, there are some estimations that more than 300 eVTOL companies are deep in their advanced testing phases while boosting millions of dollars and securing lucrative contracts. All of this is with one goal – to get their eVTOL model up and running.

With technology rising, the future has a lot to unravel. In this article, we will inspect both perks and challenges of an eVTOL aircraft and also cover aspects such as certification and safety, and dig inot the different types of insurance, the costs, and more. 

What exactly is eVTOL?

The concept of eVTOL has been around for over a decade with organizations like NASA working on the technology for quite some time. eTOL, or an electric vertical take-off and landing aircraft is a vehicle that uses electric power to hover, take off. and land vertically. It's much cleaner and efficient than the traditional gas power aircrafts used today. It's also becoming an intriguing alternative solution to ground transportation.

Standard Taxi vs. eVTOL Taxi

Before we dive into the eVTOL craze, the question that comes to mind is why this improvement considering the world currently does have well-functioning standard taxies. The answer is time-saving.

In today’s busy life, people have a higher appreciation for their time rather than other aspects. The latest Deloitte analysis shows that a standard taxi ride charges $2 per mile, while eVTOL air travel costs are presumed to cost $3 per seat per mile. So, a standard taxi traveling at 25 mph for 66 minutes will cost $55, while 15 min air travel with eVTOL at 15mph will cost $75 per seat.

Although the cost of eVTOL is much higher (based on these estimations) than that of land travel, the time difference is more than half an hour saved. What’s more, eVTOL can be used to transfer people or packages between two quite distant places – in only an hour or less.

Helicopters vs. eVTOL

Another comparison made after the release of eVTOL vehicles is between them and helicopters. Naturally, there are plenty of differences; however, the biggest one is energy consumption and environmental impacts. Namely, helicopters use gallons of fuel, whereas some eVTOL aircraft emit zero emissions, relying solely on a rechargeable battery. 

Moreover, eVTOL vehicles create less sound making them great as a daily transportation matter. Regarding the aspect of cost, these two are more or less the same, with the prediction of eVTOL aircraft being far more accessible to regular people.

What are the benefits of eVTOL?

As we have seen, eVTOL can have big advantages for all people. In the following sections, we’ll go into more detail about everything these aircraft can offer.


When trying to find out more about eVTOL, you are more than likely to come across concepts such as UAM (Urban Air Mobility) and AAM (Advanced Air Mobility). These terms are used to define the emerging carbon-neutral aircraft known as eVTOL. 

Among the many practical uses of this type of revolutionizing flying technology, the most obvious one is the ability to move faster from one point to another. Unlike the standard taxis eVTOLs are not land-based, which is a good way to make the streets less crowded and add more ease to transport.  

Cargo Transport

Another way in which eVTOL aircraft can bring more convenience into our lives is its cargo delivery capacity. While these aircraft can be used for passenger transport, they may also be repurposed and used for cargo deliveries. 

eVTOLs may reach rural or remote places more easily. While a road trip might take hours or even days, the eVTOL can make the delivery within minutes. This can be of great benefit to many businesses and allow for a better customer experience and company efficiency.  

Emergency Response

eVTOLs are not strictly limited to commodities and have varying purposes, including ensuring safe transport in cases of natural disaster. Just like helicopters, these flying vehicles can also be used in rescue searches where entering through ground areas is either not possible or less effective. 

Additionally, eVTOLs may also provide a more flexible journey to emergency service teams and allow firefighters and medical personnel to reach their destinations more easily without having to make their way through heavy traffic.

Green Energy

As the name implies, this type of aircraft uses electric power for both takeoff and landing. eVTOLs are powered by large rechargeable batteries. Many battery options are still at hand, with companies competing, incorporating varying approaches. 

Some are using lithium-ion power, while others are looking for more sustainable solutions and trying to develop self-charging batteries. The eVTOL aircraft uses multiple electric motors, which power the propellers and allow them to glide through the air. Unlike traditional aircraft, these produce very little noise and operate at lower altitudes.

eVTOL Challenges of Today

While there is plenty to look forward to, incorporating eVTOL technology into the current functionality and way of being will not be easy. Backlash is always expected, especially with things that have yet to be proven. 

However, we must remain objective and take a look into the obstacles which lay ahead.

eVTOL Aircraft Management

What must be brought into perspective is that one of the biggest advantages of air travel can be a cause for one of the biggest challenges. While the idea of escaping the crowded streets and being able to enjoy a skyline view during rush hour might seem alluring, there must be an established aircraft management system that will be in full coordination with the existing one.

Luckily, preparations are already in place, and eVTOL operators, in collaboration with stakeholders, data service providers, communication service system providers, and regulatory authorities, are working on creating a “system of systems”. Plenty of critical elements come into play in the creation of this, such as highly coordinated teams, specific training, and tested procedures. This will also require constant surveillance coupled with reliable and consistent navigation.

eVTOL Aircraft Certification

Although eVTOL technology is set to revolutionize how we view transport, securing the necessary certification is a lengthy process. This is mainly because every time there is a novel technology, there are no set regulations – mostly because the regulators who issue the needed certification are learning as the project unfolds. 

Approving each aircraft is a multi-step procedure and involves inspections of all its parts, such as motors, propellers, and flight controls. Simply said, all aircraft must achieve both product certification and airworthiness certification.

Currently, regulators are in the midst of two processes:

  • Introducing new rules and standards for eVTOL technology
  • Readjusting the already existing rules to take into account the new technology.

Although some of the developer companies have agreed to the standards set by regulatory bodies, the list of requirements is long. There are existing claims on the part of some companies that they have mapped the whole regulation path and expect to launch operations no later than 2024.

The FAA Certification

In the US, eVTOL aircraft developers construct their products in accordance with regulations set by the FAA (Federal Aviation Administration). In an attempt to make matters more flexible, the FAA issued a proposed draft to add vertical-lift aircraft to the existing framework.

The FAA also proposed the development of a Special Federal Aviation Regulation (SFAR) and also the establishment of a pilot certification program. This will allow eVTOL (as the FAA named it, the power-lift operation) to begin and happen simultaneously with the establishment of permanent certification regulations.  

The EASA Certification

The EASA (European Union Aviation Safety Agency) issued its first eVTOL regulations back in 2019. Since then, this regulatory body has been working on developing new criteria and also revising the existing ones. 

The technical specifications the EASA issued can be found under the Special Condition VTOL aircraft form. According to their official website, with an ambition to enable Urban Air Mobility (UAM), the EASA is currently in a continuous process of developing flight crew and operator licensing requirements while inspecting operational air transport concepts.  

eVTOL Safety

Even when product certification is achieved, the designated authorities will still have to certify the manufacturing facilities in order to ensure that each eVTOL aircraft is a perfect copy of the one they approved and meets all safety regulations. The FAA has not yet defined its approach toward the safety level of the eVTOL technology.

As with other aspects of the eVTOL development process, the safety regulations have not yet been clearly defined. However, there are some basic requirements issued by the FAA, such as:

  • A maximum speed of 100 mph
  • A minimum flight distance of 10 miles
  • A maximum weight of 3,000 pounds
  • A maximum altitude of 500 feet

The safety guidelines must be taken into consideration within eVTOL development, but these are not yet set in stone. Seeing that the industry is new, companies must bear in mind that these standards can be subject to changes.

Psychological Barriers and Public Acceptance of eVTOL  

The eVTOL industry lies at the mercy of social acceptance and the ability of the public to overcome given psychological barriers. Skeptical consumers have always been a big problem when it comes to implementing technical innovations within societies. 

Another Deloitte survey shows that people are quite skeptical when facing something new and uncertain for the first time. Namely, around 10,000 consumers took part in this survey, which examined the perception of the general public on autonomous eVTOL aircraft. 

Their data shows that nearly 80% of participants reported that they view eVTOL aircraft as potentially unsafe and uncertain. However, almost 50% of the participants reported that they consider eVTOL an efficient solution to railroad traffic.

Nonetheless, safety procedures are not the only concern, as the widespread use of eVTOL aircraft will also depend on the willingness of communities to let these air taxis fly over their heads. While some might not be worried about the potential noise these “flying cars” emit, others can take this as a potentially negative side. 

For those living in urban areas and larger cities, eVTOLs might be the least of the worries, but those accustomed to a more rural living will see this as reason enough to discard this possibility of change.

What insurance will eVTOL businesses need?

After eVTOL companies pass the certification process and are considered commercially operational, they will still face the challenge of securing insurance. But, when talking about current insurance policies around eVTOl aircraft, nothing is resolute. 

Just like other regulatory bodies, insurance issuers must also develop brand-new policies in accordance with the newly introduced technology. This means that only companies with a sufficient amount of data and evidence to support the claims related to eVTOL vehicles they produce will be able to secure insurance.

Since eVTOLs are unique products with their own risk exposure, a thorough assessment is required. Naturally, insurance issuers have very little information at hand so it remains difficult to predict their approach, but many believe that eVTOL companies will not have a hard time securing insurance. 

Yet, it remains clear that there will be a price difference in the insurance as eVTOL designs vary, and makers can expect it to be based on their unique model.

Aircraft Liability

The most important type of coverage an eVTOL business will need is Aircraft Liability, or Commercial General Liability for all aircraft operations. At it's core an Aircraft Liability policy protects the business from third party bodily injury and property damage claims. The most obvious example is a passenger or bystander getting injured due to the aircraft. The next is property being damaged, which would most likely occur from an aircraft falling out of the sky.

Aircraft Physical Damage

eVTOL vehicles will not be cheap to build - most base models are over $100,000 and go up in price quickly. Similar to car insurance, or commercial automobile insurance, Aircraft Physical Damage protects the vehicle from damage, theft, fire, vandalism, and more.

Product Liability

If your business is designing, manufacturing, leasing, or supplying the technology or physical property then a Product Liability policy is vital. This insurance protects you in the event that someone is injured or something is damaged, even if you didn't sell it to the end customer.

There's a long list of coverage that come into play for an eVTOL business, such as Workers Compensation, Employment Practices Liability, Directors & Officers, Commercial Property, Business Auto, Key Person, and much more. Get in touch with an eVTOL insurance advisor to learn more about the costs, coverage, and more.

eVTOL Costs

With a keen eye on prosperity and green energy in mind, technological advancements such as the eVTOL must always remain under close introspection. And closely tied to this is the eVTOL cost. Since these flying taxis are still in development and largely remain a territory marked as “under construction”, we can only rely on cost projections and speculations.

Until the eVTOL aircraft actually start flying and building their transportation networks, it remains difficult to calculate the exact cost, but it is only natural for consumers to take an interest in the price of such a ride in the air that offers such convenience.

Estimated Ride Cost

As one might expect, projections regarding the cost of an on-demand taxi ride vary. Some of the most well-known competitors in eVTOL production each put forward a different number to the dollar sign. 

NASA has also conducted a study that gives a sneak peek into the flying cost. Here are the estimates that each company and NASA have put forward as rough projections of the cost from our current standing point:

  • NASA: $6 to $11 per passenger/per mile
  • Archer Aviation: $3.30 per passenger/ per mile
  • Lilium: $2.25 per passenger/ per mile
  • Eve Urban Air Mobility: $3.56 to $3.78 per passenger/per km
  • Joby: $3 per passenger /per mile

Round-Up Cost: Fun Facts

While the projections that manufacturers provide do offer valuable insight into the cost, a lot still remains unclear as eVTOL aircraft are far from picking passengers up from their doorstep and much like other air travel will be situated in specifically assigned parking lots – so-called vertiports.

Taking into consideration both the take-off and landing points of this futuristic air travel, companies such as Joby and Archer have risen to the challenge and, in an attempt to offset some of the cost, partnered with garage company REFF. To suit the needs of customers, they aim to reconstruct existing parking lots and convert them into vertiports offering more convenient and easily accessible locations.

Joby’s strategic planning also includes a partnership with Uber. Uber’s app will allow Joby passengers to share the first and last miles of their trips. Joby’s rideshare vision is bound to drop passenger prices and might turn out to be more than a solid strategy to fill in more seats in their eVTOL aircraft.

Fun Facts About eVTOL Today & in the Future

The eVTOL concept first started in 2009, when a video of NASA Puffin eVTOL concept went viral. Since then, many have seen the futuristic potential this has. Throughout the years, companies have worked to present these so-called “flying taxis” to the public in hopes of pushing the possibility of a further step in globalization. 

Today, eVTOL aircraft have improved to the point where they can lift even 40 people and travel up to 600 km. Such an example is Kelekona. Some are just made for one person, like the Zeva eVTOL.

However, all of this remains to be seen. Right now, eVTOL vehicles are only in their testing phases. In 2020, a company in Dubai broke the news with its statement of trying out the first flying taxi up in the air. This has been followed by many as well – however, it all remains, as we said, in a testing phase.

Final Thoughts: eVTOL Vehicles Changing Transportation in the Future

With plenty of enthusiastic projections and promising modern technology, the eVTOL business has made a boom in the aircraft industry and sparked much change. Catalyzing new projects, new approaches, and regulations, eVTOL vehicles are expected to shape the future of aircraft. 

Nonetheless, expectations vary, but this new technology is set to redefine the way we see transport, and with millions of investments on its side, it seems destined to bring about a much-needed change.

Still, regulations remain to be defined, and plenty of other questions must be answered before eVTOLs are put to commercial use. Much remains unknown, and we are forced to rely mainly on predictions and future projections as the evidence we have in our hands is rather limited. 

Therefore, keeping in mind all the potential perks and obstacles that pave the way, we must note that the only way to be sure of what the future brings is to wait for this aircraft revolution to unfold naturally.  

Tyler Crawford
by Tyler Crawford
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