When it comes to owning or operating an airplane, insurance isn’t just smart, in many cases, it’s required. But what exactly are the airplane insurance requirements for pilots, owners, and operators in the U.S.?
Do you need insurance to fly legally under the FAA? What if your airplane is financed or hangared at a public airport? What coverages do lenders, airports, or flight schools typically require?
Since 1977, BWI Aviation Insurance has helped more than 10,000 aircraft owners and pilots navigate these questions with confidence. With nearly 50 years of aviation-only experience and 800+ five-star reviews, BWI is one of the most trusted aviation insurance brokers in the nation, ensuring aircraft owners meet every requirement without paying for unnecessary coverage.
This guide breaks down exactly what’s required, what’s optional, and what’s recommended when it comes to insuring your airplane.
Does the FAA Require Airplane Insurance?
Surprisingly, the FAA does not require insurance for privately owned or operated aircraft in the United States.
That means you can legally own and fly an airplane with zero insurance coverage, as long as you meet all airworthiness and regulatory requirements.
However, just because it’s not required by federal law doesn’t mean it’s optional in practice.
In reality, most aircraft owners will need insurance to:
– Satisfy financing or lienholder requirements
– Comply with airport and hangar agreements
– Meet flight school or rental contracts
– Protect against financial and legal risk
1. Lender and Financing Requirements
If you finance your aircraft through a bank, credit union, or aircraft lender, insurance is almost always mandatory.
Lenders require proof of coverage before funding or releasing the aircraft title.
Typical Lender Requirements Include:
1. Hull Coverage for the full loan amount or market value (whichever is higher).
2. Breach of Warranty Clause naming the lender as an additional insured.
3. Loss Payee Endorsement, ensures the lender gets paid first in case of a total loss.
4. Minimum Liability Coverage (usually $1,000,000 per occurrence).
Lenders want assurance that if the aircraft is destroyed or damaged, their financial interest is protected.
Example:
You buy a 2010 Cirrus SR22 for $500,000 using a loan from your bank.
The bank requires full hull coverage for $500,000, with them listed as loss payee and additional insured.
No insurance = no financing.
2. Hangar, Airport, and FBO Requirements
Many airports, FBOs, and private hangars require aircraft insurance as part of their lease or tie-down agreement.
They want protection from potential property damage or liability caused by your airplane or its operation.
Common Airport or Hangar Requirements:
– Liability Coverage: Usually at least $1,000,000 per occurrence / $100,000 per passenger.
– Proof of Insurance: Certificate of insurance naming the airport or FBO as additional insured.
– Hangar Tenant Liability: Covers damage to the hangar or facilities caused by your aircraft.
Some airports require non-owned or premises liability even for transient or visiting aircraft.
Example:
A county-owned airport requires all based aircraft to carry $1 million in liability coverage and name “County Airport Authority” as an additional insured.
Failing to meet these requirements can result in being denied hangar space or tie-down privileges.
3. Flight School, Instruction, and Rental Requirements
If you’re a student pilot or instructor flying rented aircraft, you’ll encounter specific insurance requirements set by the flight school or FBO.
Flight Schools Typically Require:
– A personal non-owned (renters) policy with minimum liability limits (usually $250,000–$1,000,000).
– Proof of insurance listing the school or FBO as an additional insured.
Why?
Their insurance covers the airplane, but not your personal liability. If you damage the aircraft or injure someone, their policy might pay for repairs, but then bill you for the deductible or loss of use.
A renters policy fills that gap.
Example:
A flight school requires students to carry a $1 million liability renters policy before solo flights.
4. State-Specific Requirements
While the FAA doesn’t require aircraft insurance, a few states have unique regulations that may apply in certain cases.
– Minnesota and Rhode Island require proof of financial responsibility or insurance for certain commercial operations.
– Oregon requires aircraft liability insurance for commercial air carriers operating within the state.
For private pilots and personal aircraft, however, most states do not impose mandatory insurance requirements.
5. Charter, Commercial, and Corporate Requirements
If your aircraft is used for charter, air taxi, or commercial operations (Part 135), you’re subject to more stringent insurance requirements.
FAA Part 135 Operators Must Carry:
Per the Code of Federal Regulations (CFR 14, Part 205):
– Minimum liability coverage per passenger and per aircraft size category.
– Proof of insurance (Form OST 6410) filed with the Department of Transportation.
Typical Part 135 Requirements:
Aircraft Type | Minimum Coverage Required
Piston / Small Aircraft | $300,000 per passenger | $1M minimum per occurrence
Turboprop | $500,000 per passenger | $2M–$5M per occurrence
Jet / Large Aircraft | $750,000 per passenger | $10M+ per occurrence
Corporate flight departments and Part 91K fractional operators also carry high liability limits, often $5M to $25M “smooth.”
6. Typical Minimums for Private Aircraft Owners
Even if no one requires it, smart owners protect their aircraft and finances with both hull and liability coverage.
Recommended Minimums:
Aircraft Type | Hull Coverage | Liability Coverage
Cessna 172 / Piper Archer | $100,000 | $1M / $100K per passenger
Cirrus SR22 | $400,000 | $1M smooth
Beechcraft Baron | $650,000 | $1M smooth
King Air | $2M | $2M–$5M smooth
Light Jet | $5M | $5M–$10M smooth
Liability is the most important part, it protects you from lawsuits, medical expenses, and property damage claims.
Even small accidents can trigger six-figure liabilities.
7. Additional Insurance Requirements to Consider
Even if your broker or lender doesn’t require these, they’re often worth adding for complete protection:
– Medical Payments Coverage: Covers minor injuries for passengers or crew.
– Personal Effects Coverage: Protects luggage or equipment inside the aircraft.
– Non-Owned Aircraft Liability: If you rent or borrow aircraft.
– Hangar Keepers Liability: If you own or operate a hangar.
– War Risk Coverage: For international or high-risk area operations.
BWI can help you customize these add-ons based on your aircraft type and mission.
8. Proof of Insurance and Certificates
Once your policy is bound, BWI issues official certificates of insurance showing your coverage limits and named insureds.
These are typically required by:
– Lenders
– Airports or hangars
– Flight schools or training programs
– Maintenance facilities
Certificates can be customized and sent within hours, another reason pilots trust BWI for fast, responsive service.
Get Your Airplane Insurance Quote Today>>
Why Meeting Requirements Isn’t Enough, You Need the Right Broker
Every aircraft owner faces a different mix of insurance obligations. A trusted broker ensures you meet all of them, without paying for unnecessary coverage.
Why BWI Is the Preferred Choice:
– 47+ years of aviation-only expertise
– Access to every major underwriter
– Same-day quotes for most piston aircraft
– Dedicated account managers, not call centers
– Fast claims coordination and renewals
“BWI walked me through every requirement and made sure I had exactly what I needed, nothing more, nothing less.” Bonanza Owner, Texas
“They handled my lender and hangar paperwork the same day. Incredible service.” Cirrus SR22 Owner, Florida
BWI by the Numbers
– 10,000+ aircraft insured nationwide
– Nearly 50 years of aviation-only experience
– 800+ verified five-star reviews
– Offices in California and Alaska
– Same-day certificates and renewals
Conclusion
While the FAA doesn’t require airplane insurance, nearly every aircraft owner will face mandatory insurance requirements from lenders, airports, and training programs.
The good news? Meeting those requirements is easy, with the right broker on your side.
For fast quotes, accurate coverage, and help managing every certificate and compliance document, trust BWI Aviation Insurance — the nation’s leader in aviation coverage since 1977.
Visit www.bwifly.com or call 800-666-4359 to review your airplane insurance requirements today.
BWI Aviation Insurance, protecting pilots, aircraft, and peace of mind since 1977.
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