As more and more pilots take to the skies, questions around insured aircraft policies abound. Now, the simple truth is that you can insure just about anything these days. College athletes destined for pro stardom take out insurance policies in case they are injured before they even make a dime. J-Lo was rumored to have taken out an insurance policy on her backside in the 90’s and the average person has some type of insurance on the newest iPhone sitting in their pockets right now. 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. Aircraft certainly fit the bill as an asset of value and with any catastrophe just an engine malfunction away, it 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. This is not about protecting your aircraft, but rather, the damage the aircraft can do to persons or property. Given that force equal mass times velocity, the larger the aircraft and faster it can travel, the more damage that it can do. This includes liability to the passengers that may be on board and provides for your legal defense as well. Needless to say, don’t leave home or the runway without it.
It will typically offer $1,000,000 of total liability and is limited to $100,000 per passenger. The costs are in the hundreds of dollars 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.
Personally, 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 game, 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
So now that you’ve got liability insurance and you are covered on everything from an on-ground collision while taxiing or landing in a pasture and turning a farmer’s prized cow into ground beef, it is time to think about your own aircraft. I don’t care what you are flying or how much money you possess, aircraft are not inexpensive vehicles. Aircraft hull insurance costs between 1.5% and 10% of the insured value depending on a variety of underwriting factors. As such, hull insurance is always worth the cost.
Hull insurance covers damage to the aircraft itself and it is important to work closely with your broker to ensure you have the right amount of coverage. Too much coverage is a waste of money and any underwrite is going to want a lot of evidence to support such a high value. Meanwhile, under-insuring the aircraft increases the insurance companies likelihood of totaling the aircraft, which may not leave you with enough money to fully replace the plane.
Again, the price 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 spectactular events that your broker should be able to review with you in detail. Here at BWI Aviation Insurance, we pride ourselves on finding the right coverage for the best price on behalf of our 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.
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