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Typically no. To protect your aircraft, you need to have coverage for physical damage or hull insurance for your aircraft or coverage for liability related to any aviation operation is almost universally excluded from a business or homeowner's insurance policy. Also, if you employ pilots, this can affect your businesses workers' compensation coverage.
Agents will often use these terms interchangably. The Underwriters are the actual insurance companies. They create the policy and pay the claims. There are approximately a dozen aviation insurance underwriters based in the United States. These companies have different business focus, policy contractual language, pricing and claims support.
In most cases, underwriters will not deal directly with their policyholders. An aviation insurance agent or broker acts as your advocate with the aviation insurance companies. Experienced aviation agents understand the coverage and have in-depth knowledge of the aviation insurance marketplace. Your agent works with the underwriters to negotiate your policy price and coverage. They advise you on all issues about your aviation insurance.
There are only about a dozen aviation insurance companies. Most agencies do not have contracts with these insurance companies. Some of these brokers will tell you that they have the ability to place your aviation coverage, but most do not have the aviation insurance knowledge. At Aero Insurance LLC, we do work with other agencies who do not have access to the underwriters. Either contact us directly or have your agent contact us about working together on your behalf.
Aircraft policies are underwritten based on a variety of factors, including pilot experience, aircraft age, aircraft type, and use of the aircraft. Your agent is a key player in the price negotiations, so share with them any training, associations of which you are a member, maintenance schedules, etc. Attending a Wings Program, logging more time, and adding additional ratings are good ways to help reduce your costs.
For most general aviation policies, the deductibles are not negotiable. Many of the companies of coverage without any deductible at all.
For many types of aircraft and pilot combinations, we can obtain bindable quotes with 10 minutes of your time. For other types of insureds, the process can take longer. So it is often best to start working on your renewals 60 days in advance of your policy’s renewal date.
Insurance companies work with insurance agents and brokers to bring clients. There are only a few aviation insurance companies, and they do not want to tie up their underwriters by quoting the same client to several different brokers.
The insurance company will only recognize one broker on any given client and it is done on a first-in, first-served basis. The first broker who presents a submission to an aviation insurance underwriter is the official "broker (or agent) of record." The insurance company assumes this agency was your first choice since the agency contacted the company before any other agencies did. The client has the ultimate choice of who they want to represent them as their agent, so the client change the agent later if the client wishes to choose agent A over agent B.
The Agent of Record Letter is a serious document that accomplishes the following:
Be certain you understand the ramifications of this document. Have your broker explain its intent to you before you sign it! You are best served by selecting, up front, one competent aviation insurance broker who has access to all the markets and will consult with you on the resulting proposals.
Some agents in an attempt to earn your business will try to fool a client into signing one of these by saying things like "I just need this to get a copy of your policy" or "I need this to obtain your loss history from the current company." Don’t be fooled into accidentally firing your current agent if that is not your intent. If your intent is to get some competition, have a discussion with your current agent. We all understand that. Once you get a lot of Agent of Records letters flying around back and forth you are the only one who loses. Insurance companies are often more reluctant to offer their best terms and pricing when there is a lot of uncertainty from a client.
Aircraft Hull and Liability policies are typically written on an "agreed-value" basis. This means that you and the insurance company have agreed to what the value is prior to the loss. Overinsurance and undersinsurance can lead to problems for you. Most insurance companies will repair an aircraft so long as the damage is less than about 65% of the insured value. So as an example if you overinsure, the insurance company will typically elect to repair the aircraft even when there is major damage. So you are left with an aircraft with significant damage history, when you might have had a total loss if you hadn’t overinsured.
Underinsurance can prove as much of a problem for you also. If you under insure, the insurance company may elect to pay you for the total insured value. If your aircraft is worth $500,000 to replace and you insure it for $350,000, you risk losing the equity in your aircraft asset.
The correct insured value to carry is the amount of money it would take to purchase another aircraft similar to yours (i.e. same year, make and model, hours, equipment, etc.). You can obtain a Vref from AOPA, utilize aircraft bluebook, and/or www.aso.com to get a good idea of the value of your aircraft. Comparing what similar aircraft are selling for will give you an idea of the appropriate hull value for you. This coverage limit should be reviewed annually on renewal and adjusted accordingly or if you add a new engine, paint job, or significant avionics changes.
Your lease of premises, hangar lease, and/or storage agreement has the possibility of limiting or even voiding your insurance policy. Virtually all of these contracts contain insurance and/or hold harmless-indemnification clauses. Signing these agreements contractually obligates you to comply with the provisions within the contract. If the insurance-related stipulations fall outside the scope of your coverage, then you have no protection for this. You may have inadequate limits, the wrong type of coverage, or be missing an endorsement. All agreements, including Purchase Agreements, Bank Loan Agreements, Maintenance/FBO contracts, Hangar Agreements, Charter Agreements, etc. should be reviewed by appropriate legal counsel for any legal ramifications with a copy sent to your insurance broker to review from an insurance perspective.
As my college business law professor used to say, "Anyone can sue anyone for anything." Attorneys will look to sue as many potentially responsible people as they can as part of trying to collect as much as they can from as many as they can.
As an example, following an accident, the named insured policyholder is sued for negligence as the owner of the aircraft. Also, the attorney files a lawsuit naming the pilot personally for negligence. The insurance carrier’s obligation is to defend and take care of the policyholder. If the pilot is an employee of the policyholder or has been specifically added as an additional insured, the insurance carrier will defend the additional lawsuit for the pilot. However, you need to pay attention to the fact that the liability limit is shared by all insureds. If the pilot is an independent contractor and has not been added to the policy as an insured, the pilot will have to defend that lawsuit on their own. Open Pilot Warranties that most policies have could make it possible to be an approved pilot but not necessarily a covered pilot under the insurance policy.
Never be without access to important policy information: pay your bill, request a change to your coverage, access documents and auto ID cards, and more
