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Sub-Limit Liability Coverage
The most common liability limit for Pleasure & Business aircraft in
today's aviation insurance market is a liability limit of $1,000,000
per occurrence limiting each passenger to a maximum of just
$100,000. This limit allows for Property Damage claims or Bodily
Injury claims to non-passengers (People on the ground or in other
aircraft) of up to $1,000,000 limit, however your passengers in your
aircraft are limited to just $100,000 per passenger. This is called
a "Sub-Limit" policy. This liability limit is less expensive than a
'Smooth' limit for the obvious reason that the insurance company's
liability exposure is significantly reduced.
Smooth Liability Coverage
A "Smooth" Liability limit is $1,000,000 Combined Single Limit 'CSL'
per occurrence including passengers. This limit allows for Property
Damage claims or Bodily Injury claims to Passengers or
Non-Passengers of up to $1,000,000. The 'Smooth' limit does not
limit your passenger liability to any lower sub-limit. This option
is more expensive than the sub-limited liability option, however, is
greater protection and always recommended, if available, for
aircraft owners who carry passengers. |
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2. How much should I insure my aircraft for?
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Generally we recommend insuring your
aircraft for what it would cost if you had to replace it with an
identical aircraft (Year/Make/Model), not what you paid for it or
invested into it. Pick up a copy of Trade-A-Plane or visit
http://www.trade-a-plane.com to see what similar Year/Make/Model
aircraft are being sold for.
Over-insuring the aircraft could have an adverse effect as the
insurance company will be more likely to repair a severely damaged
aircraft. Conversely, under-insuring the aircraft could result in
the insurance company electing to 'total' the aircraft prematurely
when they would have otherwise repaired it.
Remember, The Hull insurance premium is usually 60-75% of
your total policy premium, so raising or lowering the Agreed Hull
Value could have a significant effect on your policy premium.
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3. If I elect a higher deductible will my aircraft insurance
policy premium go down?
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In almost all cases, the aviation
insurance underwriters have standard fixed deductibles which cannot
be altered for Pleasure & Business aircraft. |
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4. How can I lower my aircraft insurance policy premium?
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A. Fly more! Underwriters love to
see pilots with 100+ hours/year. The average private pilot flies
60-80 hours/year. In fact, we sometimes see pilots who fly less than
50 hours/year experience their policy rates surcharged due to their
lack of pilot proficiency.
B. Obtain an Instrument Rating. Depending on the complexity
or performance of your aircraft, this might have a huge effect on
your policy rates. In fact, in most cases, the underwriters will
require an Instrument Rating on all complex or multi-engine aircraft
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C. Flight Training. Many times pilots who receive Recurrent
Flight Training will receive preferred rates. Depending on the
aircraft, the acceptable Flight Training will vary, however, in many
cases an Instrument Proficiency Checkout (IPC/ICC), or the FAA Wings
Program, or any simulator-based Training Facility will count toward
a Recurrent Training credit.
D. Lower your Hull coverages. While this is usually not recommended
as this may not protect you adequately, lowering your Agreed
Hull Value policy limit can be an effective way to lower your
total policy premiums; if you do not have a mortgagee (leinholder)
requiring coverage to a specified value.
E. Hangar your aircraft. Some underwriters do offer a small
premium credit for owners who keep their aircraft in a hangar. |
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5. What is an Open Pilot Warranty (OPW)?
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This is the wording in the "Pilots"
section of most aircraft insurance policies which allows pilots who
exceed certain minimum qualifications to fly the aircraft on an
occasional basis without formally being a Named Pilot on the policy.
Only pilots who fly an aircraft occasionally should fly under the
Open Pilot Warranty, all others should be Named Pilots. All owners
or financial partners in the aircraft must be Named Pilots and
should not fly under the Open Pilot Warranty. |
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6. What are the most common reasons for Aircraft Claims to be
denied?
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A. Unapproved pilot flying the
aircraft. The pilot operating the aircraft at the time of the
claim was not an approved pilot on the policy. Most aircraft owners
assume, for example, that an airline pilot or CFI is approved to fly
their aircraft under the Open Pilot Warranty because they have
thousands of hours, however, most Open Pilot Warranties have a 10 or
25-Hour in the Make & Model requirement that many pilots do not
meet.
B. Mechanical Breakdown. (aka Wear & Tear) is excluded under
all Property insurance policies, however, any subsequent loss that
might occur would be covered. For example, if a tire failed on
landing which resulted in the aircraft going off of the runway, the
tire would not be covered but the subsequent aircraft damage would
be.
C. Territory. The approved territory for each aircraft
insurance policy differs. How sure are you that your next weekend
trip to the Bahamas or Jamaica is covered as an Approved Territory
on your policy?
D. Misrepresentation. If aircraft coverage is written based
on the pilot having an Instrument Rating or a current BFR and
Medical and after an otherwise covered claim, it is discovered that
the pilot did not, in fact, have an IFR or current BFR or Medical
certificate, then coverage will be denied. Also a common mistake we
are seeing lately is the failure of all pilots to successfully
complete required Annual Recurrent Training specific to the insured
aircraft.
E. Unapproved Aircraft Usage. Each insurance policy's
definition of Pleasure & Business differs. Have you ever received
financial reimbursement from a friend for using your aircraft? Did
they reimburse you for Direct Operating Expenses or another amount?
If you received more than your policy allows under the Pleasure &
Business definition, you might have voided your coverage. Also, did
you know that only NAMED Pilots on your policy can receive Dual
Flight Instruction in your aircraft? In many policies, pilots flying
under the Open Pilot Warranty are prohibited from receiving Dual
Flight Instruction, as it is construed as a "Flight School" usage.
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