5 Things You Need to Know About Aviation Insurance

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Aviation insurance is protection against the liabilities that extend to operating aircraft. The term aircraft includes airplanes and helicopters but also drones. This kind of insurance is highly specialized, and for those purchasing it for the first time, there are certain things you need to know that may not be obvious.

1. Only a handful of insurers underwrite aviation policies.

There may be dozens and even hundreds of underwriters for automotive insurance in the U.S. In comparison, there is only a half dozen or so that deal with aviation-related policies. This tends to mean that aviation insurance policies are sold a bit differently than other insurance products you’re familiar with. You may need to hire a specific kind of agent called a producer. Your current agent may not deal with such insurance, and bundling may be out of the question. The Federal Aviation Administration can be an excellent resource for those just starting out.

2. Aviation insurance extends beyond liability.

Liability is a core component of most aviation policies, and there are two types of liability: public liability and passenger liability, which may not be applicable depending on the craft. If both are needed, combined single limit or CSL can combine them. There is also hull insurance related to ground risks when not in motion, hull insurance related to ground risks when taxiing and in-flight coverage.

3. Claims are processed differently.

Claims for aviation insurance are unlike most other claims. You generally insure aircraft based on a value that you and the insurer have agreed upon. If you have to make a claim for damages to the craft, for instance, then you will receive a percentage of the value. The percentages and agreed value will dictate the cost of the policy, and dialing in the right balance generally requires an expert in the field.

4. Liability insurance may not be legally required, but you still want it.

Even if liability coverage isn’t required legally where you are operating the craft, you generally still want. Your legal liability is still present whether or not insurance is required. The extent of your obligations can be extensive and easily bleed into your personal finances.

5. Insurance must account for specific pilots.

Anyone who will operate the vehicle must be accounted for by the policy. Otherwise, if something were to occur, you would not be covered while a non-covered pilot was controlling the craft.

It can be challenging not only to get the right kinds of aviation insurance but to get the right amount. Furthermore, having too little or too much insurance brings with it its own additional risks. With that in mind, it is very important that you consult with someone who specializes in aviation insurance.

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