“To most people, the sky is the limit. To those who love aviation, the sky is home.”
As an aircraft owner, you would agree Jerry Crawford was preaching to the choir with this statement. True, cruising above the clouds feels insanely cosmic. But, in the same measure, there’s always the ever present thought in the back of your mind of “what if” I have an accident.
There are always unknowns and challenges such as weather or mechanical problems but by carrying an aircraft insurance policy, you’ll rest assured knowing your policy will step in should an unforeseen situation arise and help get you back in the cockpit. To that end, you must establish how much coverage is enough for your aircraft, so you’re in the clear in case of an aircraft occurrence (incident or accident).
While you may not have the precise coverage figure before a loss, there are several factors you can weigh to work out the amount that would make you whole again. But before we explore these factors, let’s first define and discuss the two main aircraft insurance policies — liability and physical damage.
Aircraft Liability Coverage
This is the base policy coverage that most aircraft owners carry. It covers three types of liabilities per occurrence:
- Bodily injury to passengers
- Bodily injury to third parties (excluding passengers)
- Third-party property damage
Most aircraft owners purchase at least a liability policy, which covers all three liabilities. The standard liability coveragefor a single-engine aircraft starts at $1,000,000 total liability per occurrence, capped at $100,000 per passenger. It’s usually abbreviated as 1 Mil/100k.
Say you have an accident with three passengers on board, and you have the standard $1 Mil/100k policy. In that case, you would have $300,000 for your passengers ($100k for each) and $700,000 to cover any third-party bodily injury and property damage.
Physical Damage Coverage
Physical damage coverage, aka hull coverage, is an optional policy covering physical damage to the aircraft. With hull coverage, you and your insurance company agree on your aircraft’s market value. The amount agreed upon becomes the agreed value. In case of an occurrence, the insurance company pays you up to the agreed value minus any applicable deductibles.
Most insurers offer three main hull coverage options:
- Not in motion: covering physical damage sustained when your aircraft is on the ground, also called Ground Storage Coverage.
- Not in flight: covering physical damage sustained when your aircraft is on the ground, and also in-motion (prop running for example)
- Ground and flight: covering physical damage sustained when your aircraft is on the ground or flying.
Given that in 2020, there were roughly 1.049 accidents per 100,000 flight hours for general aviation,, you may be tempted to under-insure or skip hull coverage altogether. However, it would be a grave mistake considering it only takes a minor error to cause an occurrence small enough to land you in a serious financial disaster.
That said, let’s explore the factors influencing how much aircraft insurance you need. These are:
Type of Aircraft
The value of your aircraft influences how much coverage you need, especially when you opt for hull coverage. For instance, you’ll need more insurance for a turbine jet than a Cessna 180 or 185. The more expensive your aircraft is, the more hull coverage you’ll need.
Also, the complexity of your aircraft will affect your amount of coverage. For instance, because private jet repair and maintenance is more demanding than repairing a small Cessna or a Piper, you’ll require more hull insurance to cover a jet.
Insurers will profile your aircraft from a cost-related perspective, assessing any features that could affect the pricing. Overall, you’ll need more aircraft insurance if you fly an advanced or expensive aircraft.
Number of Passenger Seats and Passenger Load
These two factors influence your liability coverage amount firsthand. The more passenger seats you have in your aircraft, the more expensive liability coverage will be. For instance, if you fly a six-seat Cessna 180G, you’ll pay than a four-seat Cirrus SR-22 aircraft.
Passenger load is the average number of passengers per flight you habitually carry. Say you only carry three passengers in your six-seat Cessna 180G. For a typical 1 mil/100k liability insurance policy, you would have $300,000 in coverage for the passengers and you would still have $700,000 for liability damage outside of the aircraft..
Your Flying Experience
The number of flight hours under your belt influences your insurance rates substantially. If you have more experience flying a particular aircraft, you’re deemed to have a lower risk of getting involved in an aviation occurrence. And it makes sense, considering pilot error accounts for almost 50% of aircraft accidents.
When assessing your total flight time, insurance companies consider the different log time categories such as Pilot in Command (PIC), Solo, Second in Command (SIC), Actual Instrument, Cross Country, Simulated Instrument, and Night. You’ll likely get lower insurance rates if you have more PIC hours.
In another instance, you may not have enough flight time for a newer aircraft, but you’ve flown a similar older model long enough. Say you bought a new Cirrus SR-22 aircraft but have extensive experience flying the SR-20. Because the two planes are similar to operate, your SR-20 time may count when buying insurance for the new SR-22, depending on the insurance company.
Why Shop for Aircraft Insurance at BWI Aviation Insurance Agency?
Aircraft insurance can be a sticky topic, particularly when deciding how much coverage fits your bill. Before settling on a best-fit figure, you must select the appropriate aircraft coverage type, factor in your flight hours, aircraft type, and passenger load. This is hectic even when you have time.
At BWI, we understand the complexity of shopping for aircraft insurance, which is why we simplify and streamline the entire process for our customers. When your trust us to provide you with aircraft insurance, you’ll get low rates, fast quotes, and coverage you can always count on.
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.
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