Aviation Insurance: What Is It and Do You Really Need It?
“Carefulness costs you nothing.” This proverb fits perfectly well to aviation insurance, about which most of the people hardly know anything. This is a unique type of insurance which provides you safety when you are in the skies. If you are an owner of a private aircraft, plane or helicopter or if you lease it, then you must purchase aviation insurance to protect yourself, your co-travellers and your or other’s property (i.e the aircraft). There are many brokers dealing with aviation insurance Australia. They will help you understand the associated risks and choose the right insurance policy.
The aviation insurance policy offers some common coverages. For example, a policy named Aircraft Hull protects aircraft property in case of damage or loss depending on the type and style of the aircraft, its cost, the place it will fly and whom it will carry. You can discuss the associated risks with your broker. In case of an accident, the flight accident insurance will cover the cost of damage and repairs. This is beneficial for the flights that are operating on typical ground risks.
Before opting for this policy, you must ask yourself a question- what is the purpose of this aircraft? This policy is different for the people who utilize the aircraft for personal or family travelling and owner of the aircraft from the medical bill payments if the passenger is killed or injured during the flight, boarding or disembarking the aircraft. It also covers damage caused to passenger property. So, if any of the passengers lose baggage or personal items during the flight, the aircraft owner does not have to bear the expense of compensation.
Those with or a charter pilot or airline that ferries passengers. The purpose of this policy is to protect the owner against expenses of legal defence in case a passenger sues the owner for the losses. This insurance coverage is particularly helpful if an incident has caused injury, death or substantial property damage.
This is the most attractive aviation insurance option. External property damage and bodily injury to third parties are covered under this insurance policy. In case the aircraft meets an accident or crash, and the damage is caused to third party’s property, the owner of the aircraft will be covered from all the expenses that may incur.
How much coverage should you have?
It is a matter of mutual agreement. “Agreed value” is quite a common term associated with aircraft insurance. Premium is a percentage of the value mutually decided by the client and the insurer. You can save some money by getting insurance that covers less value than the true value of your aircraft. In this case, also think about a situation in which your aircraft sustains damage that is beyond repair. In certain circumstances, even if an aircraft is repairable, it is equal to a total loss. Even if you choose to repair it, you will have to wait until it is rebuilt which will take a significant amount of time. So, before determining the value of aviation insurance, weigh your options wisely.
Things to Keep in Mind While Opting for Aviation Insurance:
Before purchasing the insurance, seek clarification from your broker and understand exactly how much the insurance will cost you. Ask your friends in the aviation community. This will help you get an idea of the cost you will be paying for aviation insurance.
The passengers of the aircraft will play an important role in determining the cost of the insurance policy. So, be very transparent about who are the individuals that are likely to board your aircraft.
Check the minimum limits of liability insurance coverage as some hangar owners or airports have set standards for minimum limits.
If you already have an aviation insurance-
Review it at least once a year and check whether it meets the requirements stated above.
Check the financial performance of your insurer. If he has maintained a positive reputation, then only continue the policy.
Check if the deductibles are reasonable or not. Specifications regarding different-in-motion, not-in-motion and moored deductibles are essential to have in an aviation insurance policy.
Check what is excluded in the policy. Does it in any way limit the aircraft operations?
Does the policy cover the pilots who fly the aircraft?
Diligently check if any leasing company or lander having an interest in the aircraft is covered in case of a loss or not. Insist that their names should be mentioned in the policy.
If somebody is injured on the premises, will he be covered under the policy? Some policies may offer such extensions. It is always good to clarify this with the broker and the insurance company.
Some policies also include hurricane repositioning coverage. If the pilot has to reposition the aircraft to prevent damage in the situation of a hurricane, the policy pays for some part of the total cost of repositioning the aircraft.