Category Archives: aircraft insurance

Recent question about limited rental.

I have read your book and got to say a brief hello to you at Oshkosh a couple years back. (I was sitting in front of you at the author’s session) I wonder if I might trouble you for some advice.

I have just completed my Private and have 60+ hours in a 172. (Currently working on my instrument) I would like to move up to a 182 Skylane because it is a better instrument platform and can carry 4 real people.  The challenge is finding a 182 to rent.  (It’s the basic Catch 22.  To move up to a performance airplane you need experience, but getting it is difficult.) The rental companies here rent them, but they require 100 hours total time and 10 hours in type and require you to use THEIR CFI if you want to get the hours.  (I want to use my CFI because he has 4000 hours (4 times the hours of the most experienced CFI at the rental companies). One of my friends owns a Skylane and wants it flown more.  He also uses my CFI (his neighbor at the airpark) and would let him do my hours for time in type (I will do total in the 172).  The concern is over insurance.  I want to be able to pay him for the use of his plane, he doesn’t want profit, just coverage of the per hour costs. 

My basic questions:

1. Can I pay him per hour costs without violating the FAR’s?
2. Could I become a minor partner and then pay him for the expenses?
3. Should I try to get named on his insurance policy?
4. Any advice on how best to handle this?

Thanks for any help you can provide.  I thought the book was great.  One more side question:  How do you feel about the Cessna 206 as a plane for someone like me, wanting it for family of four for basic travel.

Thanks for the note. The 182’s are a great aircraft and probably one of the best IFR platforms available. I do understand the rental problems.  The same problems will occur if you want to fly your neighbor’s aircraft. The underwriters will put on some sort of minimum hour requirement and or training.

So, in answer to your questions.

1. 1. Can I pay him per hour costs without violating the FAR’s?  The FAA allows reimbursement of expenses, but basically the owner cannot make a profit. Most insurance policies say the same type of thing.  BUT… I have had people set up limited rental agreements and have them approved by the underwriters so that there is no question as to coverage.
   2. Could I become a minor partner and then pay him for the expenses? I suppose but you do not need to. You would still need to be named on his policy if you do not meet the policy open pilot requirements. Or see the above answer.
   3. Should I try to get named on his insurance policy? Definitely.  Typically the policy language will not permit you to fly unless you are named and approved OR meet the open pilot warranty.  Which you probably will not because of the aircraft model and your hours. You will not be covered for training or flying on his policy unless you are named, and the policy is amended to include you and your training.  This will more than likely increase his premium, but it will also make sure he has coverage.
   4. Any advice on how best to handle this? I think I would ask to be named on the policy (unless he wants you to be a partner) and plan on paying just for the reimbursement of expenses to the owner.  You would also want to split the cost of the basic insurance and then you would pay for the additional cost of adding you to the policy.  Another option would be, add you to the policy and ask the underwriters for a limited rental endorsement.  There would be a charge for this, but it would allow him to charge you “rent” for the use of the aircraft and still be covered on the insurance. You need to make sure the local FAA is in agreement with this. Some FSDO offices will not bellow a rental agreement for a private owner.