Aircraft Insurance Not Required
Carrying a policy on your aircraft is not required but, if you choose the self insured route, you'll be exposed to any liable lawsuits from anyone and everyone involved in an accident. Aircraft insurance can protect your investment in your aircraft and help protect you from ownership and operational liability. Your aviation insurance specialist can advise you on the policies that best fit your individual situation. Hull Insurance and Liability are both covered under a typical policy.
Hull Insurance (physical damage)
The value of the aircraft is considered a stated value. It's wise to review this amount with your insurance advisor on an annual basis. If you've owned the aircraft for several years, check the current value. In today's aircraft markets values are changing rapidly. If you have under estimated or over inflated the value of your aircraft that could cause unexpected problems. For example, if you've over estimated the current value and have extensive damage, the underwriter may choose repair the damage, costing less than paying out the total declared value. You'll have significant down time and a plane with "damage history" and a reduced resale value. Undervaluing your plane can also create unwanted problems. An insurance carrier may determine your plane is a total loss and take possession of it. Leaving you with too little money to purchase a replacement.
Liability Insurance
It's important to keep in mind, business owner's liability policies more than likely will not cover an aviation risk or any losses associated with an aircraft accident. When choosing the amount of liability insurance you need consider how many passengers the plane seats. A plane with 9 seats but only carrying one passenger may need less liability coverage than an aircraft that is consistently full. You'll want to identify how many of those seats are typically filled and who is flying on a regular basis. Higher net worth individuals may need a higher amount of liability coverage.
