Insurance Tip: Selecting the right coverage

[LRingeisen]

Everyone has a different coverage need and sometimes this need can change over time. With aviation insurance there are several different options to choose from.

As the name implies, a builders risk policy is for the building process. This is the coverage you can maintain from the time you purchase your first sub-kit until the aircraft is ready to move under its own power. This is an affordable coverage starting around $250. If your project is being stored at an airport, there is a high likelihood that the airport would want to be listed as an additional insured. Liability coverage can be added to a builders risk policy to cover this requirement for as little as $250.

A Ground Not in Motion policy may be the thing you are looking for if you are not currently flying but no longer in the building process. This covers the aircraft as long as it is not moving under its own power. You can increase this coverage to Ground Not in Flight to cover the aircraft for taxing. The most common coverage provided is Ground and Flight, also known as All Risk Hull or Full Flight coverage. Of course, this adds flying coverage. It’s important to understand that each of these options include liability coverage while on the ground and in flight. Remember, depending on the pilots qualifications training may be required when you bind coverage. This is only determined by getting quotes through the insurance companies.

Liability Only covers you for instances you are liable for whether they take place in flight or on the ground, but there is no coverage for the aircraft itself.

If you have more questions about the differences between the available options, please reach out to your broker. Of course, all claims are covered on a case-by-case basis.

 

[MidwestMan]

I have 2 more great insurance tips.

1. Read the fine print of the policy, I have had aviation insurance companies add extra terms in the fine print that were not part of the initial quote.
2. If the insurance company is committing fraud, report them to the agent licensing board in your state.

I attempted to purchase a policy per a quote from the company that seemed to be the highest recommended on Vansairforce.

The agent told me that I was covered per the quote, and that I would receive the full policy the next week. When I received it later, they had added a clause hidden on page 23 of 31 that my 5 hours of required pilot training would not count unless it was completed with a CFI who had 25 hours or more of time in an RV-6A. I don't know why they would think that a CFI would need to have 25 hours of practice, but me, just a private pilot would only need 5.

This clause was not included in the quote I had agreed to, which had said that it could be 5 hours with any CFI, so of course I called them and asked them to fix it.

The company refused to update the policy to match the terms of the quote. They then stated that I was still financially liable to pay for the policy, even though they added hidden terms that I never agreed to.

So I told them to go ahead and cancel the policy since they were refusing to honor the terms of the quote. They attempted to get me to sign a document stating that I would not hold them liable for their actions, and kept repeating that they would send the bill to collections if I did not pay for the policy.

Luckily you can easily file a report with the state insurance licensing board, and in my case the investigator was quite happy to make the insurance company in question stop sending me fraudulent bills and leave me alone.

So I went to a different company for insurance and ended up with a policy with about 50% more coverage and much better terms.

 

[Paul 5r4]

Can you share the company you did go with?

 

[rynmss]

This is an affordable coverage starting around $250.

For the completely uninitiated, $250/mo.? Year?

 

[BobTurner]

For the completely uninitiated, $250/mo.? Year?

I know of no aviation insurance quotes that are anything other than ‘per year’.
But a good point.

 

[Brantel]

For the completely uninitiated, $250/mo.? Year?

Mine is per year.

 

[rynmss]

I know of no aviation insurance quotes that are anything other than ‘per year’.
But a good point.

I was being a little obtuse with per month, but honestly many of my other policies a term is quoted at 6 months, and thought that might be the case.

Good to know: per year is the norm.

 

[LRingeisen]

I was being a little obtuse with per month, but honestly many of my other policies a term is quoted at 6 months, and thought that might be the case.

Good to know: per year is the norm.

Yes, the builders policies are typically one year. However, if you are almost ready to fly, there are a few companies that will start the policy off as a builders and then update it to a flying policy mid-term. Just let your agent know ahead of time so they can try to find the best option for you.

 

[MidwestMan]

Can you share the company you did go with?

Ended up using Travers Aviation, so far they have been great.

 

[Majorpayne317641]

I think you only really know the answer to that after a major claim. Although I don’t wish that on anyone.

Ended up using Travers Aviation, so far they have been great.

 

[Sam Buchanan]

Ended up using Travers Aviation, so far they have been great.

Travers is a broker, your policy was written by an insurance carrier, probably one that a lot of us use.

 

[71459]

Here's another insurance tip: don't build a little 2-seat airplane that costs so much that you worry about having to insure it. Keep it simple and inexpensive. Instead of wasting away money on hull insurance, use that money for more fuel and more flying. Isn't that why you built the airplane in the first place?

 

[Majorpayne317641]

I gotta ask. What is the threshold? Would you be ok with losing 20k? 50k? 90k? Out right? Maybe some people can but I know I can’t just lose 50k and say oh well I’ll get another one.

Here's another insurance tip: don't build a little 2-seat airplane that costs so much that you worry about having to insure it. Keep it simple and inexpensive. Instead of wasting away money on hull insurance, use that money for more fuel and more flying. Isn't that why you built the airplane in the first place?

 

[Brantel]

Here's another insurance tip: don't build a little 2-seat airplane that costs so much that you worry about having to insure it. Keep it simple and inexpensive. Instead of wasting away money on hull insurance, use that money for more fuel and more flying. Isn't that why you built the airplane in the first place?

When the simplest of these things knocks the top out of 6 figures, you darn skippy I will be insuring it!

This ain’t 1979 anymore!

 

[Capt]

I simply don’t insure my planes (I own 4) I hate insurance companies with a passion! I must have saved a fortune over the years!
Each to their own but a complete hull loss won’t effect me financially but from an estate POV that’s kinda acedemic

 

[Bill Boyd]

Like many others, I pay handsomely to insure my hull - it seems prudent after the market decided it is now worth nearly three times what I put into it in parts, and comprises a good portion of my net worth. As an asset I plan to sell one day, it is a significant item in my retirement and estate planning. If I meet my demise in the plane, then it's a bonus payout to my heirs and not an insignificant one.

I did not cary hull on the earlier -6A for the very reasons you cite, but it was valued at about 1/7th the price the 10 should bring today. Strangely, I cancelled my term life insurance policy at retirement but kept the $3.5k annual aircraft premium on the books, for self-focused reasons. I could potentialy be one of the beneficiaries of a hull insurance payout, but obviously not of an insurance policy on my own life.

The trick is to arrange the timing of the RV sale so that I can enjoy flying until it's time to hang up my spurs, while my heirs are not tasked with the sale of a big ticket item they know so little about. It requires making valid assumptions about my own longevity that are, at best, just good guesses.

That's all the thread-sliding I'm good for this morning. Y'all's MMV.

 

[carolsyracuse]

hull coverage

We are getting up in years and with 3 aircraft debate whether we should continue to get full hull and liability coverage. While losing one aircraft due to an accident would hurt (a lot), losing all 3 due to a mishap in the hangar where all three are stored, would be devastating. For that reason, we hope to get ground not in motion hull coverage with liability. Hopefully that is available.

 

[BobTurner]

I simply don’t insure my planes (I own 4) I hate insurance companies with a passion! I must have saved a fortune over the years!
Each to their own but a complete hull loss won’t effect me financially but from an estate POV that’s kinda acedemic

You obviously don’t live in a country where contingency lawyers abound, along with irrational and uninformed juries. Boeing reportedly spent over $1 M in legal fees defending itself after thr Russians shot down a 747. And they won!

 

[rleffler]

We are getting up in years and with 3 aircraft debate whether we should continue to get full hull and liability coverage. While losing one aircraft due to an accident would hurt (a lot), losing all 3 due to a mishap in the hangar where all three are stored, would be devastating. For that reason, we hope to get ground not in motion hull coverage with liability. Hopefully that is available.

It is, that’s what I currently have at the moment. Due to an Achilles surgery, I’m grounded for three months. I dropped my coverage back to ground not in motion until I can get out this boot.

 

[Webb]

On ground not in motion was less expensive than builders risk even though it’s not finished. Go figure.

 

[Tankerpilot75]

Maintain the right coverage - you’ll be glad you did!

I’m definitely a firm believer in having the right amount of a/c hull and liability insurance. In 2022 arriving at AirVenture I experienced a prop strike after exiting the runway following a marshaller’s guidance - hitting an unmarked ground obstruction. Prop strikes happen every year at Oshkosh for various reasons. Thankfully I had the right coverage with a good carrier.

Repairs took almost eight months and cost over $50k before the plane was back in service. Admittedly I added a few thousand to the bill by having a couple of upgrades accomplished while the aircraft was down. Insurance covered the repair cost and upgrades came out of my pocket as they should have. My repair cost was just a little below the 60% threshold of hull coverage limit (at that time) for being totaled. The adjuster and I discussed the possibility of totaling the aircraft but decided repairing it was the best option.

I’ve read here the logic some people are using not to insure their aircraft. To me their logic is flawed! The market for RVs has significantly increased and the cost to restore/repair an aircraft has gone through the roof. In fact, when my aircraft policy came up for renewal I decided to increase my hull coverage to reflect more closely increased market value (still less than actual market value) and the cost of improvements made during the repair process. My premium increase wasn’t that bad - even with the impact of a significant claim!

Without the insurance coverage I had my economic loss would have been intolerable. I shudder to think about the possibility of a liability claim or lawsuit on my estate or self due to negligence or error on my part while operating the aircraft. I would hate to damage or hurt anyone or their property, but if that happened, hopefully my insurance would help to make them whole. Insurance is about sharing risks. While I like to think of myself as a sensible and safe pilot I can assure you that I didn’t start my trip to AirVenture in 2022 with the intention of being involved in an aircraft incident. It happened and thankfully my loss didn’t involve any injuries to myself or others and the economic loss was manageable.

 

[thiggins]

What are you paying, and for what coverage?

 

[Tankerpilot75]

What are you paying, and for what coverage?

~ $1,810 year, $125k hull, $1 million liability.

 

[ronrapp]

I nearly doubled my coverage on the RV6 when I renewed this year, from $65k to $120k. The difference was less than $100. I think I went from about $1200/year to $1300/year.

--Ron

 

[rongawer]

On ground not in motion was less expensive than builders risk even though it’s not finished. Go figure.

I have a policy that is referred to as builder's risk by Falcon (EAA), but it is essentially an "All Risks Basis Not In Motion" policy. From the underwriter, Global Aerospace in my case, the effective difference is the stated value (completed aircraft vs parts).

There is also some additional language to the affect that I'm covered while transporting the aircraft - which may be a difference in the prices; although my rep at Falcon said there was not additional charge on the basic policy for coverage during transportation. YMMV

 

[BobTurner]

~ $1,810 year, $125k hull, $1 million liability.

Is your passenger covered to $1 million? If so this is a great price. Remember that statistically, your passenger is where most of the potential liability resides.

 

[Tankerpilot75]

Is your passenger covered to $1 million? If so this is a great price. Remember that statistically, your passenger is where most of the potential liability resides.

No Bob, I wish! Typical $1,000,000 each occurrence, limited to $100,000 each passenger, $5,000 medical. I wish underwriters would go the total $1,000,000 to a passenger but I don’t know any company that does. I must assume a passenger that has greater than a $100,000 claim would take me and the insurance company to court. I do carry a large umbrella policy but frankly testing that would be questionable for an aircraft accident.

As I said earlier, “hopefully my insurance will help to make them whole” but if the worst happens then probably there isn’t a truly economic shield to protect against a lawsuit.

Do you know of a carrier that would cover a $1 m passenger claim? What is the price?

 

[BobTurner]

As I said earlier, “hopefully my insurance will help to make them whole” but if the worst happens then probably there isn’t a truly economic shield to protect against a lawsuit.

Do you know of a carrier that would cover a $1 m passenger claim? What is the price?

Unfortunately you’re right. If you have a 35 year old MD, with 2 kids and a wife, in the right seat, and he dies, your insurance company will just write him a $100K check and walk away, you’re on your own. Half a dozen years ago I had $1M smooth, no sublimits. About $800/yr extra. But then, they got out of the business. I don’t know anyone who is currently offering the limits we really should have.

 

[pjc]

I do carry a large umbrella policy but frankly testing that would be questionable for an aircraft accident.

I would be VERY surprised to learn that your umbrella policy does not specifically exclude “Aircraft Liability”. And if not, even more interested to know who has written it and where I can buy such a policy (for any reasonable premium).

Peter

 

[MacCool]

I do carry a large umbrella policy but frankly testing that would be questionable for an aircraft accident.

My insurance agent assures me that umbrella liability policies that cover aviation-related mishaps are very rare and very expensive. Are you sure your's does?

 

[BobTurner]

My insurance agent assures me that umbrella liability policies that cover aviation-related mishaps are very rare and very expensive. Are you sure your's does?

I think you’re both saying the same thing??

 

[Mike S]

With the presumed implementation of MOSIAC, I suspect many of us will choose to change over to Sport Pilot. Basic Med is fine, but still a bit of a chore to deal with.

I have heard scuttlebutt (fancy way to say rumor) that some insurance companies will not insure many of the heavier/faster aircraft when flown as Light Sport under the new definitions, or the pilot flying them as a Sport Pilot.

Any comment?

 

[Strikhedonia]

Just renewed my policy and was happily surprised the price was unchanged from 2023. Now if prices could only return to pre-covid levels...

 

[CJT]

I am about to complete my RV 10
i have 3 quotes , annual premium ranging from 30,000>15,500>4500
what do I look for while comparing.

 

[Mdragon]

I gotta ask. What is the threshold? Would you be ok with losing 20k? 50k? 90k? Out right? Maybe some people can but I know I can’t just lose 50k and say oh well I’ll get another one.

I would argue if you can't eat 50k, x number, you financially likely have no business owning /operating and airplane from a fiscal IQ stand point.

Builders insurance is a suckers bet IMO. Your paying way to high a premium for a low probability event.

 

[Majorpayne317641]

I would argue if you can't eat 50k, x number, you financially likely have no business owning /operating and airplane from a fiscal IQ stand point.

Builders insurance is a suckers bet IMO. Your paying way to high a premium for a low probability event.

I guess you are right. I should sell mine.

 

[Strikhedonia]

I am about to complete my RV 10
i have 3 quotes , annual premium ranging from 30,000>15,500>4500
what do I look for while comparing.

Wow, that is quite a range, my full coverage quote was for $3,200 (Comm, Multi, Instr, with 1,300 hours).

 

[jimbo]

I nearly doubled my coverage on the RV6 when I renewed this year, from $65k to $120k. The difference was less than $100. I think I went from about $1200/year to $1300/year.

--Ron

Ron, care to share the company ?

 

[Desert Rat]

I would argue if you can't eat 50k, x number, you financially likely have no business owning /operating and airplane from a fiscal IQ stand point.

Builders insurance is a suckers bet IMO. Your paying way to high a premium for a low probability event.

And I would argue that you likely shouldn't make blanket assumptions about somebody else's financial exposure and how they choose to either spend or protect their disposable income. Thankfully, we all get to make that informed decision for ourselves.

With the airframe, avionics and engine, my exposure before the covid inflation rollercoaster was about the same as my wife's fancy German car and my annual premium was a bit less.

You may think the chance of a loss is a low probability, but it's a bit of a stretch to call it a sucker's bet. There's a frequent poster here whose builder's risk paid for an engine teardown last year after a bucking bar fell out of the inlet during ground runs and smacked the (running) prop. Thats just one example off the top of my head.

And in my own case; even though I didn't have any damage it sure was comforting to know that I had insurance on all that stuff in the garage last year when the the storm sirens were going off in my backyard and the Andover/Wichita tornado was busy throwing police cars through the front of the YMCA about a mile from my house.

 

[Daddyman58]

I simply don’t insure my planes (I own 4) I hate insurance companies with a passion! I must have saved a fortune over the years!
Each to their own but a complete hull loss won’t effect me financially but from an estate POV that’s kinda acedemic

In the State of Virginia, insurance is required, not an option to have or not to have.
Also, liability insurance seems to make sense to me because even a minor issue during a forced landing can cost many $ to property on the ground.
Daddyman

 

[ronrapp]

Ron, care to share the company ?

Gallagher is the broker, Global Aerospace is the insurer.

It's possible my experience played a role in the small increase, so you might not have the exact same experience. But I imagine that's true for any insurance situation: the aircraft, pilot, location, and other factors are all drivers of the final price.

 

[Mdragon]

And I would argue that you likely shouldn't make blanket assumptions about somebody else's financial exposure and how they choose to either spend or protect their disposable income. Thankfully, we all get to make that informed decision for ourselves.

With the airframe, avionics and engine, my exposure before the covid inflation rollercoaster was about the same as my wife's fancy German car and my annual premium was a bit less.

You may think the chance of a loss is a low probability, but it's a bit of a stretch to call it a sucker's bet. There's a frequent poster here whose builder's risk paid for an engine teardown last year after a bucking bar fell out of the inlet during ground runs and smacked the (running) prop. Thats just one example off the top of my head.

And in my own case; even though I didn't have any damage it sure was comforting to know that I had insurance on all that stuff in the garage last year when the the storm sirens were going off in my backyard and the Andover/Wichita tornado was busy throwing police cars through the front of the YMCA about a mile from my house.

Any wager where the likelihood of an outcome is less than the payout if you "win" is by definition a suckers bet. Casinos are built on these. They keep building bigger and better ones, as the stream of patrons supports it.

Sleeping better at night bc you are insured is more of a psychological thing. If that adds value to your existence then the value of the insurance policy is greater than just the payout in case of an event.

To each their own.

To me if the math doesn't make sense, I don't do it.

Also, consider the fact that every individual would have a number for the premium where it would seem asinine for them to pay for it.

1k for 100k coverage? 2k ? 5k? 10k? 20k?

By the time you are at 20k, you are betting it's even odds that you will have a total loss probability of 4 to 1, that year. Remember your 20k premium is essentially dead money and gone after you pay it. So you are only getting back 80k when payed out the 100k.

Yet there is someone, somewhere who would fear the loss and pay the 20k.

My point is, people use emotion and fear of perceived risk rather than actual risk when assessing these things.