Guide To Getting the Best Aircraft Liability Insurance
If you are an aircraft owner or operator, you understand the incredible freedom and excitement that comes with flying. However, with great freedom comes great responsibility, and owning or operating an aircraft also means exposing yourself to a range of risks. The potential costs associated with aircraft ownership and operation can be significant, from damage to the aircraft to liability for accidents or injuries.
This is where aircraft insurance comes in – it provides essential coverage that can help protect you, your aircraft, and your passengers in the event of an accident or unexpected event. In this guide, we’ll take a closer look at aircraft insurance, what it covers, what it excludes, and why it’s so essential for anyone involved in the aviation industry.
What is Aircraft Insurance?
Aircraft insurance (also known as aviation insurance) is a type of insurance policy that provides coverage for aircraft owners and operators. Similar to car insurance or commercial truck insurance, it offers protection against the risks associated with owning or operating an aircraft, including damage to the aircraft itself and liability for third-party bodily injury or property damage. Aircraft insurance policies are not standardized and can vary widely depending on the insurer.
The most common type of aircraft liability insurance, often referred to as third-party liability insurance, insures aircraft owners for damages that their aircraft inflicts to people and their property.
Who Needs Aircraft Liability Insurance?
Any individual or organization that owns or operates an aircraft needs to consider getting aircraft liability insurance. This includes private individuals, commercial airlines, aviation businesses, flying clubs, and financial companies that operate corporate jets. The type and level of coverage needed can depend on various factors, including the nature of the business, the type and size of the aircraft, and the intended use of the aircraft.
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What Does Aircraft Liability Insurance Cover?
Aircraft insurance typically covers damage to the aircraft itself and liability for third-party bodily injury or property damage. Some policies may also provide coverage for personal items of passengers, liability indemnification for the hangar where the aircraft is stored, injuries sustained while operating the aircraft, the cost of emergency landings, and the costs associated with search and rescue operations. The specific coverage provided by an aircraft insurance policy can vary depending on the insurer and the specific policy terms and conditions.
What Does Aircraft Insurance Exclude?
Claims or suits arising from the ownership, maintenance, or use of aircraft are generally excluded under the standard commercial general liability (CGL) forms. Aircraft insurance policies may also exclude coverage for intentional acts, criminal acts, and acts of war. Additionally, aircraft insurance policies may not cover damage caused by wear and tear or mechanical failure.
Aircraft liability insurance also eliminates coverage for any bodily injury or property damage that you or another insured cause while owning, maintaining, or using an aircraft. These exclusions also apply to aircraft that you rent, borrow, or entrust to someone else.
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How Can You Lower Your Aircraft Insurance Policy Premium?
Here are some ways to help you lower the premium on your aircraft insurance policy:
Fly more: Insurance underwriters highly appreciate pilots who fly 100 or more hours per year, while the average private pilot tends to fly around 60-80 hours annually. Interestingly, insurance providers may impose a surcharge on policy rates for pilots who fly less than 50 hours per year due to their insufficient pilot proficiency.
Take flight training: Pilots who undergo Recurrent Flight Training are eligible for more favorable insurance rates. The type of Flight Training required may differ based on the aircraft, but often an Instrument Proficiency Checkout (IPC/ICC), the FAA Wings Program, or training sessions conducted in a simulator-based facility may qualify for a Recurrent Training credit.
Increase your deductible: A higher deductible can lower your premium, but you’ll have to pay more out of pocket if you file a claim.
Maintain a good safety record: Insurers often offer discounts for pilots with a clean safety record.
Installing safety equipment: Upgrading your aircraft with safety equipment such as anti-collision lights, autopilots, and GPS systems can lower your premium.
What are the Best Aircraft Liability Insurance Companies?
Appropriate airplane insurance offers important protection for you and your passengers. A basic insurance plan can safeguard you and your aircraft from the financial ramifications resulting from incidents related to aviation, such as vandalism, weather-related issues, or other kinds of damage.
Although it may not be compulsory for state or federal entities to mandate airplane insurance, it is still advisable to have a sound aircraft insurance policy that provides fundamental liability coverage, which can be tailored to fit your specific requirements, budget, and any pertinent circumstances or coverage needs.
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Top 5 Aircraft Insurance Companies of 2023 According to their Specializations:
BWI Fly
Best For: Overall Coverages
Pros:
Affordable prices
Top-notch customer service
Multiple policy options
Cons:
Not licensed to operate in the District of Columbia
Some activities are not covered under the policies.
USAA
Best For: Veterans
Pros:
Competitive rates
Offers coverage for most types of aircraft
Commercial, personal, and non-owner policies
Cons:
Only applicable to USAA members
Limited to veterans, active-duty military members, and their family members
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Wings
Best For: Commercial Aviation
Pros:
A vast range of business policies.
Workers’ compensation coverage
Thoughtfully selected policies
Cons:
It is not possible to receive an immediate online quote
There is limited information accessible online
AssuredPartners Aerospace
Best For: Renters
Pros:
Discounts are available to AOPA members
Accident forgiveness program
Low rates on aircraft renters’ insurance
Cons:
Below-average customer service rating
No online quote options
Not valid for commercial use
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EAA
Best For: Vintage Aircraft Insurance
Pros:
Multi-aircraft discounts
Online chat is convenient
Cons:
Online quotes are not available
The website offers limited policy information
In Conclusion
Aircraft insurance is crucial for anyone who owns or operates an aircraft. It provides coverage for damage to the aircraft and liability for third-party bodily injury or property damage. The type and level of coverage needed can vary depending on various factors, and aircraft insurance policies are not standardized. To ensure you have adequate coverage, it is important to work with a reputable insurer and carefully review the terms and conditions of your policy.
Frequently Asked Questions
What is the basic aircraft liability limit?
The basic aircraft liability limit refers to the minimum amount of liability insurance coverage required by law for aircraft owners and operators. In the United States, the Federal Aviation Administration (FAA) requires that all aircraft operating under Part 91 of the Federal Aviation Regulations (which includes most general aviation flights) carry liability insurance with a minimum limit of $100,000 per passenger seat or $500,000 total liability coverage, whichever is greater.
However, it’s important to note that this basic limit may not be sufficient in many cases. Aircraft owners and operators should consider their specific needs and potential risks when determining how much liability insurance coverage they need. Many choose to purchase additional coverage beyond the basic limit for protection against larger liability claims.
How much should I insure my aircraft for?
Typically, it is advisable to insure your aircraft for the amount it would cost to replace it with an identical aircraft of the same year, make, and model rather than its purchase or investment value. You should research the selling prices of similar aircrafts to determine the replacement cost.
Having excessive insurance coverage for the aircraft may not be beneficial, as the insurance company may prefer to repair severely damaged aircraft instead of replacing them.
Inadequate insurance coverage may lead the insurance company to consider the aircraft as a total loss prematurely, which they would have repaired otherwise. It is crucial to remember that the hull premium typically represents a significant portion of your overall policy premium, so adjusting the Agreed Hull Value could significantly impact your policy’s cost.
Who is liable in aircraft accidents?
Depending on the circumstances of an aircraft accident, various parties may potentially be held responsible for the incident. The owner and operator of the aircraft can be deemed liable for ensuring the safety of the flight. At the same time, while manufacturers or maintenance providers may also be accountable if their products or services were deemed to have played a role in the accident. There are instances where air traffic control or the federal government may share liability if found to have acted negligently or violated regulations. There are instances where air traffic control or the federal government may share liability if found to have acted negligently or violated regulations.
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Connect with a local agent online to help you with your insurance needs.
