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. Dont
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
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. Bests 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
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
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 dont 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.
Dont 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