Category Archives: aircraft insurance

Medicals needed?

Posted on September 5, 2014 by Scott Smith

Most companies require a current medical if you are to be insured.  Does that mean you don’t have insurance if you don’t have a medical?  No!  If you are not using the aircraft in a way that needs a medical, why would you need to have a medical?

If you are unable to maintain a medical, but you still own an aircraft it could still be insured.  If you are not flying the aircraft and you have coverage while “not-in-flight” and the aircraft is damaged by a big storm, you should still be covered.

Many of the aviation insurance companies follow the guidelines of the FAA.  I even tried to find an FAR that said you had to have a medical (or a pilot’s license for that matter) to taxi or own an aircraft.  I was unable to locate anything specific to that.  (Just think, if that was the case, many of the corporate owners or the owners that hire a pilot, would not be able to have any coverage). 

For an example, say you are the aircraft owner and you don’t have a medical and you are taxiing your aircraft around the airport.  A good owner keeps the engine, tires and brakes limbered up.  And let’s assume that you have full coverage for ground and flight.  Now, what if you happen to have a minor mishap during that time, such as you hit a taxi light or drop in a hole and damage the prop, you should have coverage.  Should have coverage and the insurance company not wanting to pay are two different things.  Most aircraft insurance policies have a section that states that the operator of the aircraft has to meet the requirements of the policy.  The requirements usually include a medical.  But a medical is not required to taxi or start the aircraft only to fly the aircraft.  If you were not on the runway, not flying or haven’t been flying, should they pay?  I think so.  And will they pay?  Probably.  If the company has provided the correct coverage for the aircraft and the aircraft is not in a situation requiring a medical, they should be responsible! 

If you were out flying and the aircraft had an accident, you’d void the policy without a medical.  So just because you are on the ground doesn’t mean you don’t have to meet the policy requirements.  The earlier example is a situation, where you were not in flight and not intending to fly. 

Of course, this is a “gray” area.  If the pilot is taxiing to the pumps for fuel to make a flight, he doesn’t have to have a medical, but going down the runway he does…I just thought of something else.  Many people think they can get around this by having a friend in the aircraft that does have a medical.  Problem is if they are not qualified, listed or meeting the open pilot warranty they are not covered in the aircraft.  If the other pilot is not an instructor they can’t be “giving dual”.  Additionally, that “friend” will be the one at risk of being the pilot in command in the event of an accident or claim.  Very few people I know want to have an accident (and possibly a violation) on their pilots record for a friend who just happened not to have a medical!  Usually the friendship ends up being very short.

Airport insurance requirements

Posted on July 2, 2014 by Scott Smith

This is just a quick comment about airports being added to your policy as an additional insured. 

There are few states that require a person to buy aviation insurance.  But the local community can require coverage. 

Not surprisingly there is an increase in the airport requirements that are being asked for.  These requirements use to be just to have the airport listed as an additional insured.   The local community was worried about being protected if someone thought you were liable for something. The airport wants a little extra protection from your policy.  But lately the requests have been expanded to include request for additional named insured, higher limits and even requirements for hull coverage.

Plus now there are management companies that want to be protected too. So not only do you have the city or county but the FBO and property managers. Each time you get asked to add another person to your policy you are basically diluting your coverage. Now you are protecting all those additional insured. No, it’s not the best thing, but its also the way the business works.  You can’t get by without it.

Anyway, these requirements have made the insurance companies start rethinking their premiums.  Each time they add or change the policy they incur some cost.  Some companies add a premium for an additional insured that is not a municipality or governmental agency.  For example, naming the FBO will probably cost you.

And if more and more requests are made for additional insureds, it would not be a surprise to see the rates increase to cover these cost. 

And if they ask for a Waiver of Subrogation… well that’s another story.

Aircraft annuals and the insurance company

Posted on June 11, 2014 by Scott Smith

Thinking of flying your freshly “out of annual” aircraft to the mechanic for the annual?  Check your insurance coverage first!  Many insurance companies will not provide coverage for the aircraft if it is not in a current airworthiness status.

But wait!  It is licensed; it does have a current airworthiness…well not quite!  If the aircraft is out of annual and the owner gets a ferry permit, some people feel that makes it legal to fly.   Sort of.  Yes it is legal, by the FAA, to fly under the restricted permit.  All you have to do is follow the rules. 

BUT…the insurance company doesn’t always agree.  You could have the correct paperwork in the aircraft, the approved pilot and still not be covered.  The insurance policy often has a clause that will not provide coverage for the aircraft if it is not within current airworthiness.  In many peoples opinion this is a gray area of the airworthiness.  Airworthy means different things to the insurance company than to the pilot. 

What can you do?  Call the agent and get a little information.  Ask a few questions.  Check to see if the policy has any language about FAR’s.  Many companies have an exclusion in the policy that will not provide any coverage for any situation where the insured is found in non-compliance with the FAR’s.  We have found a few companies that don’t have any language pertaining to FAR’s (but they do have language that excludes out of annual aircraft).

With an aircraft that runs out of annual during a trip (poor planning for whatever reason) the coverage will probably be null and void.   Don’t put yourself into this type of situation.  The aircraft needs to have a ferry permit issued by the appropriate FAA Flight Standards District Office.  To do that requires that the aircraft have an entry in the logbooks from a mechanic stating that the aircraft is airworthy for a ferry flight.  Most of the time this means it does not have any outstanding AD’s that could jeopardize the flight, the flight has to be “Day VFR” and that only the required crew be on board.  In that situation having your friend fly along is not required.  Getting dual in the aircraft because you have never flown it before might be required for you, but not for the operation of the aircraft. 

If you want to fly and be insured with an aircraft that is out of annual the underwriter can put a note in the insurance company file and you’ll be okay.  Don’t be surprised if they charge you extra for this little bit of service.  If the aircraft has been out of annual for a long time, say over a month; make sure that you have a good relationship with the agent and the underwriter.  It might take a little work for the agent to get the underwriter to provide coverage.  Underwriters don’t like to cover aircraft that have been out of annual for a long time.  The risk is too high for failure and claims. 

If you bought an aircraft that was out of annual, you might not be able to get coverage at all.  Many insurance companies have decided that they will not take on a new risk that is not ready to fly.  That means the aircraft might be a good deal as is, out of annual, but you can’t bring it home insured.  If you want to buy an aircraft in this situation, call the agent first and let him know what the situation is.  We have been able to get coverage in a limited number of cases provided the aircraft has not been out of annual very long and the pilot was qualified to fly the aircraft. 

Whatever the situation, make sure you check you policy before you fly an aircraft that is out of annual… or hundred hour inspection, but that’s a different story.