There is a lot to consider when you choose your aviation insurance, including how high your liability limits should be. Some people choose to purchase the most common aircraft insurance liability limits of $1,000,000 total liability, limited to $100,000 per passenger, when others opt
What is Aircraft Liability Insurance?
Aircraft liability insurance is designed to protect you in three outcomes related to accidents with 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.
Smooth liability coverage provides insurance with a limit for an occurrence involving your plane, including claims from passengers and non-passengers as well as property damage. For example, if you have a $1,00,000 smooth limit liability policy and get in an accident, you are covered up to that amount with no per passenger sub-limits.
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.
The most common type of aviation liability insurance policy includes sublimits. This type of coverage limits the amount that each passenger can collect individually from a single occurrence with your aircraft. It also limits claims for medical treatment.
A standard liability sublimit policy from insurance companies includes $1,00,000 per occurrence, with limits set at $100,000 per passenger. 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.
How Much Liability Insurance Do You Need?
Most single-engine aircraft insurance policies in the United States have the standard $1,000,000 in total liability coverage, limited to $100,000 per passenger. Depending on the use of your aircraft, personal net worth and overall risk exposure, you may want to obtain higher liability limits.
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
- 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.
Learn More by Visiting BWI Aviation Insurance
At BWI, we have experienced brokers who can help you figure out the level of liability insurance you need. It may make fiscal sense to keep your limits lower, or you may want to cover your bases and ask for the highest limits insurance companies will offer.
We specialize only in aviation insurance, and our experienced brokers work with students, new, and experienced pilots to make sure they get the best coverage possible, at the lowest cost, with great customer service to boot.
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.