Aviation Insurance Tips

Think Year-Round Coverage

You may wonder why you need aviation insurance during the winter when your aircraft is not in use. One reason is the potential liability or damage to your aircraft while on the ground. This ground risk protection coverage covers your exposure due to windstorms, hangar fires or collapses, and vandalism which can occur any time during the year. Carefully consider your exposure before dropping any coverage.

Don't Sell Yourself Short

Think twice before underinsuring your aircraft to save a little money. Don’t insure it for less than you paid for it, or for less than it would cost to replace it. You should ask your insurer whether they increase the value each year according to Bluebook to make certain that your limits are sufficient. 

For Your Lower Valued Aircraft

If your airplane is valued at $50,000 or less, you should look for an insurance company that offers comprehensive coverage designed for "low value" aircraft. These policies typically cover liability, passenger hazard, and full in-flight
hull coverage.

Insure Your Upgrades

Make sure to increase your limit of insurance each time you upgrade or make improvements to your aircraft. Think of the last time you added new
equipment or overhauled your engine--did you consider the value this added
to your aircraft?

Review Your Limits Of Liability

Although a number of different things need to be taken into consideration when choosing what bodily injury and property damage liability limits to carry, you should always consider buying the highest liability limits you can afford.

Liability insurance protects you against claims arising from injury or damage you may have caused to others or their property.  Your insurance company's committment is to defend you if you are sued, and if you are at fault, to pay for the damages according to the terms of the policy.  This coverage is not first party medical or life insurance, but rather, liability coverage for claims made against you by third parties for which the law holds you legally liable.

Check Your Insurer's Stability

As with other types of insurance you purchase, the financial stability of your aviation insurance company is important. Ask your insurance representative to provide you with the A.M. Best’s or Standard and Poor's (or equivalent) rating for the insurance company you are considering. A rating agency rates insurance companies on their financial strength and claims paying ability.

Consider Medical Payments

This coverage is no-fault, and pays for immediate medical expenses stemming from an accident, or while entering or exiting the aircraft. Although its intent
is to cover smaller injuries, it may pay expenses not covered by your
health insurance.

All Insurance Policies Are Not Equal

Aviation insurance policies and the coverage they provide vary from company to company. If you are considering switching to another insurance company, ask your insurance representative for a sample insurance policy to review and then compare it closely to your existing policy.

Because aviation insurance is not regulated extensively by state law, policy language varies considerably. In fact, many companies are not licensed in all states in which they do business, nor are their policies necessarily approved in all states. Since every aircraft owner has different coverage needs, be aware that the cheapest priced policy may not provide the best protection to meet your needs. Also be aware that policies with the same coverage "limits" will not necessarily provide the same coverage.

Limit Hull Coverage

To reduce insurance premiums, you may think about canceling your hull coverage after your loan is paid off. So if you don’t feel that both your ground and in-flight hull coverage is necessary, you should at least think about keeping hull coverage to cover your airplane while it is hangared or tied down. Keeping it in an enclosed hangar will also help reduce your rates. 

Don’t confuse liability insurance with health or life insurance

Many pilots are confused about how to best protect family members who fly with them because there is a lot of conflicting information published. You protect your family in your aircraft the same way you do when they are in your automobile. Check that your personal medical and life insurance policies provide protection in the event of injury or death to your or your immediate family in your aircraft. These are first party coverage policies that provide needed coverage regardless of fault. Also, most insurance policies offer medical expense coverage that can provide you with additional medical coverage. Remember that your liability coverage only responds if you are legally liable for the accident and, in many cases, a lawsuit may need to be brought against you for your negligent actions to collect for third party injuries.

Many policies exclude liability for family members. Others may limit coverage to an amount below the full policy limit. In the event you want additional protection for claims and lawsuits by your family members against you, you may be able to purchase it for an additional charge. You may decide to use that extra money to purchase first party medical or life insurance coverage instead.

Buy per person vs. per passenger liability coverage

Since most injuries are incurred by occupants of an aircraft, it is not advantageous to limit an occupant to a lower limit of liability, and allow a non-occupant to possibly receive a greater portion or even the entire policy limit. If you need higher limits for bodily injury, you should have it for both occupants and non-occupants.

Be careful of exclusions that can void your coverage following an accident or loss

Beware of policies that exclude coverage for any of these reasons: if your annual inspection, medical certificate, or FAA flight review lapse during the policy period (as opposed to requiring coverage at inception of the policy); if the pilot is not properly rated for the flight involved or violates an FAR; in the event the insurer finds an undisclosed lienholder, if you rent your aircraft to other pilots named on your policy.

If you own an aircraft with a partner, make sure you have adequate coverage

Coverage varies significantly among insurance companies. Check to be sure your policy provides cross liability coverage between insured persons like partners or flying club members when they fly together. This is a very important feature to look for since it is very likely your partner or another flying club member will be with you in the aircraft on numerous occasions.

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