Wings, Wheels and Water

Last time I mentioned the question about buying an aircraft to get your license in. This time its about getting instruction in your own aircraft.

Many an aircraft owner has future training plans for their aircraft.  These plans may include an advanced rating or a friend or family member that needs to get a license.  And if you own an aircraft, why in the world would you want to rent someone else’s?  That’s great question.  And the first place you should start is with your insurance policy. 

Most policies have specific language that addresses the use of the aircraft. And the use is usually limited to pleasure flights and limited business flights that might be done in conjunction with your pleasure flights (but nothing for hire).  The use might include instruction for advanced rating, but not for the primary rating unless it is specifically stated.    

This little clause is important to the owner and insured.  If they, the owner, would like to work on their instrument rating and they are not flying the aircraft in actual IMC, they are usually considered to be the PIC.  Coverage under the policy is normal.  The problems start when there is someone in the aircraft giving or receiving dual instruction that is not listed as a pilot on the policy (but might be considered PIC). 

In the past we have discussed the pilot warranties and who is protected and who is not.  If you remember, the open pilot warranty is a pilot category that, if a person meets the listed requirements, that pilot can fly the aircraft and the owner (insured) is covered by the policy.   But there is a small clause in ,many aircraft insurance policies that states that unless the pilot is listed on the policy they cannot receive any training in that aircraft.

This basically says that if you have a friend that wants to get their instrument rating in your aircraft they wouldn’t have any coverage…and neither would you.  Of course, as always there is a “gray area”.  If the friend meets the open pilot warranty (OPW) and they borrow your aircraft to get advanced training they might be covered.  The key here is might be!  If that person meets the OPW and they are the pilot-in-command (PIC), then yes they (and the owner) should be covered under the policy. But each insurance company has a different interpretation of the training clause.   It would be in the best interest of the insured to have the agent contact underwriting and check for sure.  It would even be a better idea to list the friend on the policy and make sure the owner has coverage.

We see this problem pretty regularly.  Usually it is a situation where the cost to add a student pilot to a policy is very expensive.  The owner decides to try and circumvent the cost by allowing the “student” pilot to get their training under the supervision of an instructor that meets the open pilot warranty.  While the thought might be correct, it is flawed. 

A good example would be the owner of a light twin-engine aircraft.  This owner didn’t have a multi engine license and needed to get dual and take the check ride with the FAA.  To put that person on the policy would have cost about $1000 more a year in premium.  In this instance the owner decided that the quote we got (with him on the policy), was too expensive and he went to another agency to quote coverage without him listed.  In the month after buying coverage through the other agent, the owner and his instructor had an unfortunate gear up landing.  Of course their defense was that the instructor met the OPW and they would have coverage under that clause.  But what he discovered is, as we told him, if he wasn’t on the policy there was no coverage.  There was a clause about non-listed pilots receiving dual instruction in that aircraft.  The owner attempted to convince the claims department that the instructor was PIC but when the claims adjuster made copies of the owner’s logbook they found entries that included dual instruction in the aircraft.  If he didn’t have the entries he might have had coverage, but then, what good would the training have been if he couldn’t record it.  In this case the claims cost him a lot more financially than the premium increase would have.

The same situation can happen in just a normal “run of the mil” aircraft.  We have had numerous owners that have wanted to allow another pilot access to their aircraft but that pilot didn’t meet the OPW warranty.  When we check on adding them to the policy there is a significant increase in premium.  In a few of those cases the owner has decided that they will let the person fly the aircraft with someone that meets the OPW, say an instructor.  But again, if they log the hours and then have a claim, it will probably be denied. 

It’s also important to know that your instructor might not be covered. Many polices require that the instructor meet the OPW if they are giving instruction in your aircraft.  If they don’t meet the minimums, the instructor needs to have his or her own coverage or be listed on your policy.   A good example is transitioning into a high performance aircraft or light twin.  Your instructor might be qualified by the FAA to give training in a twin or that big single but the insurance company will probably require a minimum number of hours in the make and model.  If the instructor doesn’t have the minimum, he can’t really give you the training (from the insurance standpoint).  This also can be like a domino affect.  If he didn’t meet the minimums and still gives you the training and you (later in life) have an accident, the claim might be denied.  The claims department will want copies of your logbook and they will be looking for any entries that show compliance with the training requirements.  When the instructor’s logs are copied and they find he didn’t meet the OPW (or whatever the insurance companies requirement was) they will have the opportunity to decline the claim.

So what can the owner do?  Make sure if someone flies the aircraft they meet the open pilot warranty or the underwriter approves them.  This doesn’t stop people from getting dual in the aircraft.  It doesn’t stop your friends from using the aircraft for training, it just means that, as the owner, you need to make a few decisions, take a few preliminary steps and possible pay a few additional bucks to insure coverage during that time. 

As a side note, lets say your spouse wants to take a “pinch hitter” course, but doesn’t want to be a pilot, don’t worry.  Usually the underwriters will allow a spouse to take pinch hitter or safety courses with qualified instructors in your aircraft and often it’s for no cost.