As more and more pilots take to the skies, questions around insured aircraft policies abound. Aircraft insurance has similarities to automobile insurance but major differences as well. Insurance is about protecting assets of value from unforeseen or catastrophic damage. You pay a little each month under the hopes that if the worst happens, you don’t have to pay big.
General aviation aircraft certainly fit the bill as an asset of significant value. With any catastrophe just an engine malfunction away, insurance is an absolute necessity. So let’s talk about the two pillars of any insured aircraft policy.
Liability on Insured Aircraft
Much like your automobile insurance, it is required that if you are guiding a huge hunk of metal at great speeds that you will have insurance in case the worst happens. Aircraft liability insurance is not about protecting your aircraft, but rather, the damage the aircraft can do to persons or property.
Insurance will typically offer GA aircraft owners $1,000,000 of total liability and is limited to $100,000 per passenger. The costs are in the hundreds of dollars to several thousands depending on the intended use and model of the aircraft. There are often some exclusions listed in most policies, so it is important that you have a clear understanding of what is covered and what is not. Your best bet is to grill your broker with these questions and if they can’t provide you a clear answer, it may be time to shop for another broker.
As an aircraft insurance broker, I love outlining exactly what is covered to aircraft owners because I want them to fly with peace of mind. When they find themselves in an emergency situation, I want them focused on safety and not the liability for what is about to happen. Trust me, after over 40-years in the aviation insurance industry, the most unimaginable aircraft scenarios have happened to some pilots before you. When in doubt, ask your broker if your liability insurance is sufficient for your operations.
Hull Insurance on Insured Aircraft
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Aircraft hull insurance covers physical damage your own aircraft, including:
The engine
The propeller
Avionics.
The word “hull” is a carryover from the marine industry, like many aviation terms. If you crash and total your car, you will be paid out based on Kelley Bluebook cash value. For aircraft, it’s a little different. Your policy is based on the stated value
It’s important that you get an accurate hull value, because if your plane is a total loss, the insurance company will pay the scheduled value less the applicable deductible. For example, if your hull stated value was $103,000 and you had a $5,000 deductible, for a total loss, you would be paid $97,000.
For example, if you do a $15,000 upgrade to your aircraft, installing a glass panel, and adding an autopilot, these improvements will increase your aircraft’s value. Be careful about using the invoice amount from the avionics shop, the cost you pay for labor and installation generally doesn’t increase the value of the aircraft.
Because repairing an aircraft to an airworthy condition can be really expensive, many aircraft incidents and accidents where the pilot was not injured still result in a total loss to the aircraft.
The price you pay for hull insurance really depends on which options you choose and keep in mind, there are exclusions with every policy. Many policies will offer various options such:
Ground and Flight – This covers the aircraft against any threat that is not specifically excluded, regardless of whether the aircraft is in the air or on the ground.
Not in Flight – This policy covers damage that takes place when the aircraft is on the ground, without regard as to whether the airplane was in motion or stationary.
Not in Motion – This covers the aircraft while it is sitting on the ground in perfect stillness while hoping not peril befalls it.
There are different exclusions for acts of war, terrorism, and other spectacular events that your broker should be able to review with you in detail. At BWI Aviation Insurance, we pride ourselves on finding the right coverage for the best price on behalf of our owners and pilots. As a family and veteran-owned business, we know that it is not only our company name on the line, but our family name on the line as well. If we can help support your aviation journey with the pillars of insured aircraft policies, please don’t hesitate to reach out or request a quick quote.
BWI | The Future Of Aviation Insurance
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What makes us different? Our office is open 12 hours a day, our team is hand-picked, well-trained and every single customer has their own dedicated Aviation Insurance Professional.
Get a no-obligation, Aircraft Insurance Quote or call 800.666.4359
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