My aircraft is currently at the FBO undergoing an overhaul. Do I need to have my own insurance policy, or will the FBO’s policy cover the aircraft?
It’s strongly recommended that you cover your aircraft with your own policy. Some FBO’s will carry hangarkeeper’s hull coverage (which is designed to protect the FBO in the event of damage to an aircraft under the care of but not owned by that FBO). Many do not carry hangarkeeper’s coverage. Additionally, even if the FBO’s policy includes the proper Hangarkeeper’s coverage, it may not pay out for certain types of losses, like those resulting from windstorm, vandalism, or mechanical failure, for example. If the FBO is not legally liable for the loss, the insurance company might not pay.
What steps do I take to add a pilot to my policy?
In order to add a pilot, we will need to submit some basic information about the pilot to the underwriting department at the insurance company. The information the insurance company will need includes the pilot’s age, ratings, total logged hours, hours logged in insured make and model, total hours logged in the last 12 months, and details of any recent recurrent training courses completed. Once approved, we will know if there are requirements or any changes in premium.
Can I charge others for the use of my aircraft?
Most personal aircraft insurance policies will allow for a small amount of cost reimbursement. Some policies will not allow for any cost reimbursement. It is always important to read your policy and talk with your agent or attorney to help determine if cost reimbursement or a fee can be charged. Commercial policies are different and can be obtained. If you are considering accepting compensation for use of your aircraft, please contact us and we will review the specific circumstances of your situation and offer our professional opinion on the type of insurance you require.
I just made major upgrades to my aircraft and I want to increase my hull value; what do I need to do?
Changing your hull value can be easy. In some cases, we can increase the value over the phone. In other cases, your insurance company will require an equipment list including the avionics in the aircraft, engine hours, paint quality, interior quality, and time on the airframe.
When will I receive my policy?
Depending on the insurance company and your preference, we will mail or email the policy to you the same day we receive it from the insurance company. Some of the insurance companies will send the insurance policy to us quickly. Other insurance companies can take up to four weeks to print and mail the policy to you.
Are all insurance carriers the same?
No. There are a limited number of insurance companies that will insure aviation risks. Several “carriers” are actually groups of companies. Because of that, your best option is to work with a specialist aviation broker who can explain the differences. The relative financial strength of the carrier is very important as it reflects their ability to pay claims.
In addition, different underwriters will be stronger on various types of risks. Also, the way in which claims are settled can vary. Your aviation insurance broker specialist can help you make the best decision.
What can I do to get the best value for my insurance dollar?
First, fly an aircraft that your experience level dictates. While it may be possible to begin your flying career in a high performance aircraft or make multi engine or turbine transitions at relatively low time, an insurer will make the terms and pricing far more challenging than if you follow a more conservative approach.
Second, train, train and train some more. Annual recurrent and simulator training help make you a better risk. Insurers will require this for many models as well.
Finally, do the extras that reflect that you are serious about safety. Attend seminars, obtain a Wings phase, get that extra rating. You will be safer.
How much should I insure my hull for?
Aircraft policies are written on an “agreed value” basis. At the time the policy is bound, you and the insurer agree that the aircraft is worth a specific dollar value. Because of this, it is important to arrive at an insured value that accurately reflects what the aircraft is worth.
Underwriters will not overinsure an aircraft because it could present a moral hazard. You could profit substantially if “mysteriously”, the $50,000 aircraft you insured for $200,000 disappeared. Alternatively, if your aircraft is overinsured, the insurance carrier could elect to repair a large partial loss instead of totaling the aircraft, which could leave you with a heavily repaired aircraft you no longer want to fly and that would be difficult to sell with such an accident history. You also do not want to underinsure your aircraft because the insurance company will pay you a total loss and keep your salvage. You would be left with a check for $50,000 on your $200,000 damage claim and no plane.
An aviation insurance specialist can help you arrive at a reasonable value to insure your aircraft. This should also be reviewed annually or more often if you add equipment, overhaul the engine or have the aircraft painted.
How much liability coverage is enough?
There is no simple way to determine this. It is generally best to buy as much as you can reasonably afford. You should take into account what assets you have that need to be protected. While registering an aircraft to a holding company may provide some benefit, if the claim is bad enough and the attorneys are diligent enough, it may come back to you individually.
Consider also what your passenger exposure is. How many people will be flying with you on average? What is the worst case scenario?
Am I covered if I fly outside of the United States?
Aircraft insurance policies are all different. Most cover the US, Canada and Mexico and some may include the Bahamas or Caribbean. If you plan a trip outside of policy territory, call your aviation broker. They may be able to obtain specific underwriter approval for additional territories. Some countries have additional requirements that need to be met so again, it makes sense to review this with your aviation insurance broker.
Why can’t I get higher limits of liability coverage?
For owner flown piston aircraft, getting limits of liability over $2,000,000 is becoming increasingly difficult. For owners who need it, there may be excess liability available. Higher liability limits are readily available for turbine aircraft and/or aircraft flown with professional pilots.
Since the passage of the General Aviation Revitalization Act, manufacturers are less exposed in litigation. This leaves the aircraft owner a larger target and their insurers have responded by reducing the limits they will expose at the current pricing levels.
What happens if I add a low time pilot?
Often we can add lower time pilots without too much disruption. We specialize in tough-to-place aircraft and pilot combinations. As aviation insurance specialists, we are the brokers that you want working on a risk other brokers may find difficult to place.
Is Mexican Liability included in the liability limits of my policy?
Mexican Liability is not included as part of your aviation insurance policy. It is an insurance requirement of the Mexican Government that requires the purchase of Mexican Liability insurance from an insurance carrier licensed in Mexico. Your aircraft insurance company may or may not offer this coverage for an additional charge. If you are planning a trip to Mexico, please call our office to discuss your options.
What is a “smooth” liability limit?
A “smooth” liability limit is a combined single limit of liability for bodily injury and property damage which does not have a per passenger or per person sublimit. In other words, the entire liability limit would available to settle the claims of one or more people. A “smooth” liability limit is more expensive than one with a sublimit but offer greater protection, because even a single passenger would be afforded the entire limit of liability in the event of a serious bodily injury.
I applied for a quote and bound coverage. Why do I need to return an application after coverage has already been in effect?
All aviation insurance companies require a new application if you are a new customer to them. This application is specifically worded with your individual effective date, your exact liability limits, your hull value, and questions tailored to your exact policy. Even if you have already started a policy, the insurance company will require an application with your information and an original signature. The application becomes part of your policy. Many insurance companies require a new application every three years if you are a current client.
I have a personal aircraft insurance policy and I am a CFI. Can I give instruction in my aircraft?
Instruction or rental to non-named or non-approved pilots is excluded unless specifically approved. We can often specifically approve individual pilots. (Even student pilots.)
My airport wants to be listed as an additional insured on my policy. How does that affect my insurance?
This is a common requirement at many airports where you hangar your aircraft. Any time an Additional Insured is added to your policy the limits of liability are shared with that entity.
What is an Open Pilot Warranty?
An Open Pilot Warranty is the minimum qualifications required to be approved to fly the aircraft without being a named pilot. The pilot must meet every qualification of the open pilot warranty to fly the aircraft. Some policies do not contain Open Pilot Warranties. In many cases, we can request to specifically approve a pilot who does not meet your specific Open Pilot Warranty on your policy.
Does my current personal liability umbrella or business liability policy cover my aviation risk?
Coverage for physical damage or loss to your aircraft, or coverage for liability related to any aviation operation, is almost universally excluded from a business or homeowner’s insurance policy. To obtain this kind of coverage, you must purchase a specific aviation insurance policy.
What is the difference between an insurance company and an insurance broker?
An insurance broker places the insurance coverage with the insurance company. Most insurance companies work only through insurance brokers. The insurance company creates the policy and pays the claims. The companies differ in their business focus, policy language, pricing, and claims support capability. It is a broker’s job to place the individual customer with the insurance company that best fits his needs.
Can my local non-aviation specialist broker help with my aviation insurance?
An experienced aviation specialist has the knowledge and contacts of the aviation insurance marketplace. He or she can help you understand the different types of coverage available. Your broker needs to be an expert in policy language and everything aviation related.
Why do I have to fill out an update form each year?
In some cases, the insurance company will not release renewal terms without updated underwriting information. More importantly, we work hard each year to get you the best coverage at the lowest possible premium. We ask you to give us an update each year to make sure that we are basing our quotes on your most recent experience.
If I increase the deductibles, will my premium go down?
This is one instance where aviation insurance is different from auto or home insurance. In aviation insurance, the deductibles are usually a set part of the policy, and they generally do not change premiums.
How long does it take to start a policy?
We specialize in quick turnaround time and can bind coverage the same day you call us.
Can I just list my CFI as the only pilot since I am inexperienced and don’t plan to fly as pilot in command?
No, all pilots flying the aircraft whether they are Pilot In Command or receiving dual instruction need to be reported to the insurance company. Otherwise, the insurance company could potentially void coverage in the event of a claim if a non-approved pilot was manipulating the controls.
I have a corporate jet or turboprop. My corporate pilot is a very experienced professional pilot. He completes school in other aircraft on a regular basis. Does he still need to attend a school specific to the make and model of my aircraft?
Most insurance policies will require pilots to complete annual factory-approved school in the make and model for all turbine aircraft. There are exceptions to the rule based on several different factors. Always consult your aviation insurance broker.
Why are your rates so much less for the same coverage I have with another broker or company?
Aviation insurance rates are more subjective and less regulated than other types of insurance. In most other lines of insurance, such as home and auto, there are millions of units insured and past losses can accurately be used to predict future losses and set rates accordingly (law of large numbers). The United States, which has the largest number of civil aircraft in the world, has only about 250,000-300,000 aircraft on which to base rating and underwriting guidelines. It is much more difficult to determine a premium on an individual risk because a single accident can determine profit or loss for the aviation division of an insurance company. One insurance company may rate an aircraft/pilot combination two or three times more expensive than another company for the same coverage based on their subjective preferences or recent loss experience. We constantly stay apprised of the changing underwriting appetites of all the aviation insurance markets so we be assured that our clients are receiving a competitive rate from a reputable insurance carrier.
What factors do insurance companies use to determine my premium?
All aviation insurance companies are different. Factors include the age of the aircraft, use of the aircraft, experience of the pilot, loss history of the make and model, territory in which the aircraft is used, pilot training, value of the aircraft, and limit of liability. For these reasons it is important to work with an aviation insurance specialist who knows the market and understands how to place your individual risk.
I purchased an aircraft from a friend. Can I just keep his insurance policy?
NO! The owner or the insured entity of the insurance policy must have an insurable interest in the aircraft. Aviation insurance policies can not be transferred from one owner to the next. Even if the former owner has paid for the policy in full and hands the policy to you there is no coverage. Please call our office prior to aircraft ownership. We can confirm whether or not proper coverage is in place.
I rent or borrow an aircraft. Should I purchase an insurance policy?
Yes. Purchasing a non-owned aircraft insurance policy is a good idea. The owner’s policy may not include coverage for permissive pilots. The aircraft may be underinsured or uninsured. Even if the owner’s policy pays, the insurance company may subrogate. You may be liable for the damages.
Can I find reasonable insurance after an accident?
Accidents happen. In most cases, the future insurability of the pilot who had the accident is based on the claim itself. A large insurance claim may have a greater impact on your insurability. If the claim was caused by a mechanical malfunction and had nothing to do with the pilot, the underwriter may be more understanding. In cases of pilot neglect or error, a new insurance policy can be a bit more difficult to obtain. An aviation insurance specialist is needed to assist in these unique situations. Rates are quoted on an individual case by case basis, so please call for your individual quote.
What is short rate cancellation?
The most commonly used method reduces the unearned premium by 10% when a policy is cancelled mid-term (before the expiration date). Some insurance companies will have a minimum earned premium.
What are the Declarations page(s)?
The Declarations page(s) (also called Coverage Summary Page by some insurers) is usually the first page of your policy. It lists your name and address, the aircraft description, and your insurance limits. Depending on the insurance company it will be either one or two pages long.
Do you offer any aviation association member discounts?
Yes. We are able to offer significant discounts to members of several organizations. Be sure to have membership card and # available when calling for a quote.
When do you recommend ground-not-in-motion (storage) coverage?
Each company takes into account that an aircraft may be occasionally down for repair. For this reason most companies will not offer competitive coverage for a short term storage policy. If the aircraft is being built or rebuilt, a longer term storage policy can usually be purchased at a reasonable rate.
I am a student pilot. What type of aircraft do you recommend purchasing?
This answer can vary depending on what you want to do with the aircraft, how much you want to spend, where you plan to fly, and what type of flying you want to do. Discussing all of these things with your broker can help you make the decision on which aircraft will best fit your mission. We can competitively insure student pilots in almost any type of aircraft.
What is the difference between War and TRIA coverage and do I need to purchase them both?
TRIA insurance covers acts of terrorism in accordance with the Terrorism Risk Insurance Act (TRIA). This requires the act of terrorism to be certified by the Secretary of the Treasury as an active of terrorism by a foreign person or foreign interest. War covers not only acts of terrorism, both foreign and domestic, but also war, invasion, acts of foreign enemies, civil war, rebellion, revolution, strikes, riots, civil commotions, labor disturbances, and malicious acts or acts of sabotage. If you purchase TRIA insurance coverage standalone, it has more stringent cancellation provisions than War coverage, which does not allow the coverage to be cancelled on short notice. However, that is the only benefit to TRIA over War coverage, and the vast majority of our clients opt to purchase War but forgo TRIA.