AIRCRAFT INSURANCE
Insurance FAQS
Is Aircraft Insurance required?
-There is no requirement for liability or comprehensive coverage on aircraft, unless you operate under FAA Part 135.
-All lenders require insurance.
-Some owners who own their aircraft free and clear choose to self insure.
-Many airports and FBO’s require insurance if you plan on using their services.
How is the value of the aircraft determined for the policy?
-Insurance policies are based on stated value.
-Value is usually submitted by the Insured.
-Market values do fluctuate and it is a good idea to keep this updated
Annually. See form below.
-Almost all business aircraft insurance policies require annual simulator based training as a minimum.
-Many insurance companies are also starting to look at human factors training, such as Cockpit Resource Management.
-Additional safety training, such as fire evacuation, security training and the development of a Safety Management System (SMS) can help reduce premiums.
-Insurance companies view owner pilots as an increased risk as flying the aircraft is not their only job.
-Obtaining commercial and ATP ratings can help.
-Introduction of VLJ’s in the market has helped reduce these premiums.
What is the best way to shop insurance?
-The aviation insurance industry is limited to a handful of underwriters. Many will require an insurance broker to submit a “Broker of Record” form to identify the client and then prevent the aircraft owner from getting multiple quotes from the same underwriter.
-Selecting a knowledgeable agent who can shape your insurance needs to best fit an underwriters program is the best option.
-Many lenders require high liability coverage and require to be named as Additional Insured on the policy.
-Many also require Breach of Warranty coverage in case the owner does not comply with the limitations in the insurance policy.
Most importantly, it is essential that the owner and the crew are aware of all the limitations and restrictions on the insurance policy so that every flight is operated within the bounds of the policy.
