Aircraft insurance

What is aircraft insurance?

Aircraft insurance that provides liability and property coverage for aircraft. Aircraft insurance, also called aviation insurance, can be purchased for several different types of aircraft, including standard, experimental, and older aircraft, as well as seaplanes.

While aircraft insurance generally covers the repair or replacement of damaged aircraft and parts, aviation accident insurance will cover liability claims for injury or loss of life.

Key takeaways

  • Aircraft insurance covers repairs to damaged aircraft or other flying machines.
  • More comprehensive coverage can also include damage to airports, hangars, and other relevant ground properties.
  • In addition to aircraft insurance, most pilots or airlines / operators will also carry aviation accident insurance to cover injury or death.

Understanding Aircraft Insurance

Just as boat owners can purchase boat owner insurance to protect against damage to their boat or vessel, aircraft owners can also protect their property from damage. Aircraft insurance is necessary because claims or lawsuits arising from the ownership, maintenance, or use of the aircraft are generally excluded from standard commercial general liability (CGL) forms.

Companies that choose to use private aircraft in their operations must purchase aircraft insurance to cover exposure to aircraft liability losses. This can be aircraft liability coverage or stand-alone non-proprietary aircraft liability and perhaps also excess aircraft liability coverage. Third party aircraft liability coverage is often provided, which also includes hull coverage (physical damage) and medical payments. Aircraft policies are not standardized and vary widely. Some insurers offer policies that combine aircraft liability and hull with other aviation coverages, such as aircraft product liability, airport liability, general ground liability, and hangar owners liability coverage.

The policy can also provide coverage for the personal items of the passengers, as well as compensation for liability for the hangar in which the aircraft is stored. Insurance policies can cover injuries sustained during aircraft operation, the cost of emergency landings, as well as costs associated with search and rescue operations.

The type of coverage and the amount of the premium depend on the type of aircraft covered by the policy. Insurers may find aircraft that the owner has built at home (called home-built aircraft) that carry a higher risk than aircraft purchased already assembled. Some policies provide first-flight coverage for home-built aircraft.

Levels of coverage and types of aircraft insurance

Insurance companies can provide different levels of coverage depending on whether the aircraft is used for pleasure or for business purposes. An aviation company may need coverage if it provides flight training services. A finance company can purchase aircraft insurance for its fleet of corporate jets.

Some insurance companies will also provide insurance coverage for aircraft that are rented by the operator rather than owned by the operator, as the operator could be liable for thousands of dollars in damage if something were to happen to the aircraft. Aircraft insurance is also available to organizations, such as flight clubs, in which members can share the use of one or more aircraft.

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Mark Holland

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