- New coverage package follows fatal crash that exposed risks in China’s fast-growing low-altitude aviation sector
- Industry still faces questions over standards, pilot training and liability
A Hangzhou manned aircraft maker has secured China’s first comprehensive insurance policy for ultralight aircraft, addressing a longstanding coverage gap as authorities and companies push to expand the country’s low-altitude economy.
CoolFly (酷飞飞行器), a Hangzhou-based low-altitude aircraft startup, said on June 6 that China Pacific Property Insurance and PICC Property and Casualty Co., two of the nation’s largest insurers, had agreed to insure its Urban and Dream ultralight aircraft models.
The deal marks the first time domestic insurers have offered an integrated insurance package tailored to the sector.
China regulates ultralight aircraft under the Civil Aviation Administration’s CCAR-91 R4 rules rather than the stricter framework that governs conventional aircraft.
Operators do not need pilot licenses, and manufacturers do not need full aircraft airworthiness certification.
Regulators adopted the system to make recreational flying more accessible, but insurers largely stayed away because traditional aviation policies rely on airworthiness requirements.
Flying without covers
As a result, ultralight aircraft operators often flew without meaningful insurance protection, leaving passengers and third parties exposed when accidents occurred.
The issue drew national attention last September after an internet celebrity named “Tang Feiji” died in a crash while livestreaming a flight in southwestern China’s Sichuan Province.
Investigators found that a previous owner had assembled the aircraft from purchased parts before reselling it.
Tang had learned to fly primarily through online tutorials and had already survived two low-altitude crashes linked to fuel gauge failures.
The accident highlighted broader concerns across the industry, including inconsistent parts quality, uneven pilot training and unauthorized flights.
When accidents occur, victims often face uncertainty over liability and compensation because insurers rarely cover the aircraft.
Full-coverage insurance
The new policy in Hangzhou combines third-party liability, passenger liability and hull damage coverage.
It provides up to 2 million yuan ($295,312) in third-party liability coverage per accident and up to 3 million yuan in aggregate compensation for passengers, while also covering damage to the aircraft itself.
“Most insurance products available previously were selective,” a CoolFly representative said in an interview with local media. “Some covered the aircraft but not passengers, while others excluded certain flight scenarios. This comprehensive policy is not only a three-in-one product but also an exploration of a broader insurance model for the low-altitude industry.”
Insurers face high underwriting thresholds for research and test-flight aircraft, limiting participation and available capacity, a manager in China Pacific Property Insurance’s low-altitude economy division in Shenzhen said, speaking on condition of anonymity.
The new policy could help lower risk-related costs across the low-altitude aviation supply chain and support tech companies developing aircraft and related services, the manager added.
A milestone indeed, but still a long way to go
Founded in December 2022, CoolFly said in a June 6 WeChat post that China’s first ultralight aircraft insurance cover signals not only recognition of CoolFly’s product safety, but also a vote of confidence in the low-altitude economy’s prospects.
“From zero to one, it’s always the hardest but also the most significant,” the startup said. CoolFly was recognized as a “seed-stage unicorn” during the 2026 All Blossom Conference held in Hangzhou.
Industry observers hailed the latest Hangzhou policy as a milestone, but said wider adoption and common standards will decide whether insurance can keep pace with the rapid growth of China’s low-altitude aviation market.
