Liability might come first to mind when you think about renting or flying a non-owned aircraft, but you also can’t forget to protect yourself in case you cause physical damage the plane you are flying. Aircraft physical damage coverage, is an optional coverage in an aviation renters insurance policy and provides hull coverage for a specified amount (usually $5,000-$200,000) that will cover damage to the aircraft itself.
It’s not a requirement that you cover physical damage in your policy when you are flying other people’s planes, but it can cost you dearly if you decide not to.
Why Do You Need Physical Damage Coverage In Your Aviation Insurance?
An aircraft renter’s insurance policy is always secondary insurance coverage to the aircraft owners insurance policy. In the even that the owners policy has lapsed, does not have enough coverage or the claim is denied, your non-owned aircraft insurance policy will step in and offer coverage.
Many flight schools that offer aircraft rentals have insurance policies to protect their owned aircraft, but they typically have physical damage deductibles of between $5,000 and $20,000. In the event of an accident or incident where there is physical damage to the aircraft itself, they may want to turn the claim in under your non-owned aircraft insurance policy to cover the initial deductible damage amount.
Who Needs Physical Damage Aviation Renters Insurance?
It’s not a stretch to say that almost any time you decide to pilot someone else’s plane you should have your own insurance to supplement theirs. It’s always a good idea to carry a separate, secondary insurance policy, in the event that the aircraft owners coverage is insufficient..
If you are not covered under an owner’s policy when you fly, you should have your own physical damage coverage in several situations, such as:
- When you are in flight school
- When you borrow a plane, even one belonging to a close friend
- When the owner is in the plane but you are the pilot
- When you are a flight instructor but the student owns the aircraft
Without your own aircraft damage coverage, you might end up paying out of your own pocket if you are involved in an accident. If they want to collect from you, the aircraft owner’s insurance company can seek damages under a concept called subrogation.
What is Subrogation?
Insurance policies contain clauses that give insurance companies the right to try to collect from third parties to recover their losses. This is subrogation. Under this concept in insurance law, if you were piloting someone else’s plane during an accident the insurance company can claim that you contributed to the loss and thus should pay for the damage, or some of the damage, instead of them.
This is a very important concept to understand when you are trying to decide whether to get renters aircraft physical damage coverage, and in what amount. If the insurance company wins a judgment against you, they make up some of their loss. You may also have to pay the deductible to the owner of the aircraft. Everybody wins in this situation but the uninsured.
What is a Waiver of Subrogation?
The owner of a plane you are renting can include a clause in their policy that waives the right of their insurance company to seek redress from you as a third party. This clause is called a waiver of subrogation.
Insurance companies often charge additional fees to add waivers of subrogation to their contracts. This makes sense, as it limits their ability to recoup their losses when they pay claims.
If you are a CFI or work for an FBO, you may be covered under a waiver of subrogation at your place of employment. If you are unsure if the insurance company can come after you for damages, check with your own agent before you take on that risk.
Deciding How Much Renters Aircraft Physical Damage Coverage You Need
Deciding how much aircraft physical damage coverage you need in your aviation insurance depends on a few factors, including:
- Does the insurance policy of the owner of the aircraft or your flight school include physical damage insurance? If it does, how high are the deductibles?
- How much is the aircraft you are flying worth?
- Depending on your answers, you could choose to cover the amount of the deductibles in the owner’s policy through your own renters insurance. Alternatively, if the owner does not have good hull insurance, you should cover the full value of the aircraft in your policy just to be on the safe side.
Learn More Or Get an Aviation Renters Insurance Quote
Adding physical damage coverage to your aviation renters policy isn’t inexpensive, but it can be complicated to figure out just how much physical damage coverage you need. That’s why it’s important that you have a broker with a lengthy background in helping pilots who rent aircraft find policies that fit their specific circumstances.
At BWI Aviation Insurance, we have decades of experience helping pilots with their insurance needs and applying our accumulated knowledge to helping new and existing customers. We are known for our superior customer service and for getting our pilots the policies they need at good prices. You worked hard and spent a lot of money getting in the air. Don’t let a lack of insurance ground you.
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