Higher Aircraft Insurance Liability Limits: Complete Coverage Guide
There is a lot to consider when you choose your aviation insurance, including determining the optimal liability limits for your aircraft. While many pilots choose the standard aircraft insurance liability limits of $1,000,000 total liability with $100,000 per passenger sublimits, others require higher coverage based on their risk exposure, aircraft value, and personal net worth. Understanding your liability options is crucial for protecting your financial future.
What is Aircraft Liability Insurance Coverage?
Aircraft liability insurance provides essential financial protection for pilots and aircraft owners in three critical accident scenarios involving your aircraft, including:
- Bodily injury or death suffered by passengers on your aircraft
- Bodily injury or death suffered by third parties who are not passengers, for example, people on the airstrip or in vehicles that your plane collides with
- Damage to property owned by third parties, such as other planes, automobiles, or other things on the ground such as fences
There are very few laws that require aircraft insurance liability coverage, however your FBO, airport, lienholder or hangar owner will typically require at least a liability only insurance policy. You will have to choose between policies with different types of limits or accept the limits that insurance companies are willing to give you. This is where having an experienced insurance broker comes in handy. An aviation insurance professional can advocate on your behalf with the insurance companies to make sure you have the best coverages and most competitive rates.
Understanding Smooth Limits Coverage
Smooth liability coverage provides comprehensive insurance protection with a single occurrence limit for your aircraft, covering all claims from passengers, non-passengers, and property damage without individual sublimits. For example, if you carry a $1,000,000 smooth limit liability policy and experience an accident, you have the full $1,000,000 available for any combination of claims with no per-passenger restrictions. This type of coverage offers maximum flexibility but may be more expensive due to the increased exposure for insurance carriers.
This type of insurance can be expensive for insurance carriers, as it opens them up to substantial risk if even one person is injured or killed. Depending on the type of aircraft, pilot qualifications and overall risk exposure, companies may or may not offer smooth limits or limits above $1,000,000, limited to $100,000 per passenger.
Aviation Insurance Sublimits Explained
The most common type of aviation liability insurance policy includes passenger sublimits, which restrict the maximum amount each passenger can collect individually from a single aircraft accident. This coverage structure also applies specific limits to medical treatment claims.
A standard liability sublimit policy from aviation insurance companies provides $1,000,000 per occurrence, with individual limits of $100,000 per passenger. Property damage and bodily injury claims from non-passengers on the ground or in other aircraft remain at the full $1,000,000 coverage level. Property damage and bodily injury claims from non-passengers on the ground or in another plane remain at the $1,000,000 level. It is only passengers in your plane who are affected by the limits.
These limits allow insurance companies to minimize their risk. A smooth limit policy could pay out $1,000,000 to a single passenger, while a standard sublimit policy would result in a much lower payment. You may be able to receive higher sublimits in your policy, and an experienced aviation insurance broker can help you with that.
A Warning to Check Your Approved Pilot Clause
The approved pilot clause in your aviation insurance policy lays out the requirements set by the insurance company for who can fly your aircraft. The insurance company can deny your claim if someone was flying that didn’t meet the requirements, such as having enough training on your specific plane.
No one wants to think that someone they let fly their aircraft is going to get in an accident, but most crashes are caused by pilot error. Insurance companies know this, and it is why they insist on approved pilot clauses.
Determining Your Aircraft Liability Insurance Requirements
Most single-engine aircraft insurance policies in the United States carry the industry-standard $1,000,000 in total liability coverage with $100,000 per passenger sublimits. However, your optimal coverage amount depends on several critical factors including your aircraft’s intended use, personal net worth, flight frequency, and overall risk exposure. Higher liability limits may be essential for pilots with significant assets to protect or those operating in high-risk environments.
Take into consideration the factors that judges and juries take into account when deciding personal injury cases such as those arising from aviation accidents.
Wrongful Death and Personal Injury Awards
The cost of a wrongful death award can wreck you financially if you don’t carry enough liability insurance. Laws vary by state, but judges and juries consider several factors related to the person or people who lost their lives in the accident involving your aircraft, such as:
- Life expectancy
- Income
- Health
- Future earning capabilities
- Other direct costs related to the death
Other direct costs could include things like funeral expenses or medical expenses prior to death. You may also be liable to pay for loss of parental guidance if the decedent had minor children.
Personal injury awards for passengers or people on the ground can also be astronomical in cases involving aviation accidents. If your plane hits a crowd of people during a rough landing, you be responsible for their medical bills, lost wages, pain and suffering, and other damages.
Given these circumstances, the easy answer is to consult your insurance broker and get the highest coverage you can possibly afford. You shouldn’t wait to find out after an accident that caused personal and property damage that you are on the hook for a substantial part of the damages.
Expert Aircraft Insurance Guidance from BWI Aviation
At BWI, our experienced aviation insurance brokers specialize in helping pilots and aircraft owners determine the optimal liability coverage for their specific needs. Whether it makes fiscal sense to maintain standard limits or maximize your protection with the highest coverage available, our team will analyze your risk profile and recommend the most appropriate solution. We work exclusively with A+ rated aviation insurance carriers to ensure you receive competitive rates and comprehensive coverage.
We specialize exclusively in aviation insurance, and our experienced brokers work with student pilots, new aircraft owners, and experienced aviators to ensure they receive the best coverage possible at competitive rates with exceptional customer service. Our expertise extends to commercial aviation insurance, experimental aircraft, and specialized coverage needs.
Why choose BWI Aviation Insurance?
Over our 42 year history, BWI has built longstanding relationships with all of the above Aviation Insurance Companies. We work hand in hand with the above companies and leverage our experience to find the best market for your particular airplane insurance risk.
To ensure that you are getting the absolute lowest rate and best coverage with a rock solid A+ rated Aviation Insurance company, get a quote with BWI today. We specialize only in Airplane Insurance and our office is open 12 hours a day. Our agents are friendly and knowledgeable, and most importantly they are agents that you can trust to get you the best coverage for your needs. Aviation Insurance is all that we do and have done for 42 years.
Call 800.666.4359 today for a free Airplane Insurance Quote or Click Here to submit a quote request online.
BWI is the Nation’s Leader in Aviation Insurance, with offices based in Corona, CA and Anchorage, AK.
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