"Those amazing people in their planes..." Since the Wright brothers were the first people to fly, people have been trying to fly higher, faster, and farther. This is because aeronautical improvements are getting better and better at an ever-increasing rate.
There's a lot more to flying than the romantic ideas in songs like "Up, up and away" and "Come fly me, let's fly, let's fly away..." It's a big part of how most aircraft owners make a living and shouldn't be thought of without the right insurance.
A big difference between aviation insurance and other kinds of insurance is that it is very subjective. Because there are so many different kinds of planes, ways to use them, and levels of pilot experience, policies should always be made to fit the needs of each individual applicant. Because of this, it is best to hire a broker who specializes in aviation insurance to set up coverage.
When you apply for aviation insurance, a number of things will be looked at, such as
1. Amount of coverage: Aviation policies are broken up into
- Hull: The damage or loss of the plane.
- Liability: Loss or damage to other people's property and/or bodily harm to other people caused by the insured's carelessness.
"Agreed value" is what insurance for aviation is based on. This means that if the hull is lost completely, the amount agreed to in the policy is what will be paid out when the claim is accepted.
It is very important that the plane is insured for its real value because if it is under-or over-insured, it could cause the owner a lot of trouble. For instance, if an airplane is grossly underinsured, the agreed-upon value won't be enough for the owner to buy a new one.
In the case of over-insurance, the insurance company may decide to go along with a long repair process that costs more than the market value but less than the agreed value. Plans to get "back in the air" will be put back by a lot because of this.
Liability is a different question, and in most big cases, the courts decide on settlements.
2. Type of plane
In general, it costs more to insure a helicopter than a plane with a fixed-wing. This is partly because of how they are used here in Australia, such as to round up animals and do heavy industrial work.
Accidents with helicopters are also more likely to cause the whole plane to crash than accidents with fixed wings. In a fixed-wing plane, a "heavy landing" might not seem like a big deal, but in a helicopter, it would probably be the end of the plane.
The best way to get the best price for the plane, whether it has fixed wings or rotors, is to tell the insurance company exactly what it will be used for. Business owners may want to think about whether branching out from their main business function is worth it if it means using the aircraft in a more dangerous way.
3. Pilot Experience
The most important things that affect the amount of the premium and the level of coverage are the pilot's experience and qualifications. Coverage may not be given if the pilot doesn't have enough hours in the air.
If someone other than the owner is going to be flying the plane, it is the owner's job to make sure that all information about the other pilots is correct and up to date. If you give wrong information, your claim could be turned down. Basically, there are three kinds of pilots who can fly the insured aircraft:
- Owner: No need to explain
- Open Pilot Warranty: The Open Pilot Warranty (OPW) is the minimum set of requirements that a pilot must meet to be able to fly the insured aircraft. Even though the insurer does not need to know the names of OPW pilots, it is very important to make sure that all OPW pilots meet the requirements for the insured aircraft. Keep in mind that the OPW for one type of plane might not be enough for another.
- Named Pilots: These are the people you will let fly the plane even though they don't meet the OPW requirements. Most of the time, using Named Pilots will mean paying a higher premium.
It's helpful to think about how the insurance company feels about this. An airplane is a high-risk item for the insurance company. For someone to take on that risk, it must be worth it. Since most plane crashes are caused by pilot error, a higher premium must be charged for pilots with less experience to cover the risk.
Once coverage is given, it's not always easy to keep it after a year.
As the renewal date gets closer, both the cover and the premium are looked at again. This can be a good thing since pilot experience and any extra training will be taken into account when figuring out the new premium.
Overall, the most important thing to know is that all the information given about the plane and its pilot(s) should be as accurate and up-to-date as possible. It doesn't matter if this leads to a price that someone might think is "cheap." What matters is that the risk will be reflected in the premium, and insurance should be like that.
