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13 Answers

Aircraft Renter’s/CFI insurance-should I get it?

Asked by: 22388 views , ,
Commercial Pilot, Flight Instructor, General Aviation, Private Pilot, Student Pilot

My flight school has insurance on our aircraft, however, it is a $3,000USD deductable. 

I see that AOPA offers renter's and CFI insurance, should I get the renter's insurance (since I do rent out their aircraft to take my girlfriend up every once in a while), and should I also get CFI insurance as well?  If so, any coverage suggestions? (we fly 1970's PA28-161's and an PA28R-200, the most of which is worth ~$50k). 

We also have a 2004 Cirrus SR20 G2 worth probably ~$200k, but I have no idea when and if I will get CCIP training for it (they promised me, but its been 6 months since I've been hired, and no word about it), so I cannot fly it.  Thanks

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13 Answers



  1. SkyBoy98046 on Feb 15, 2011

    Don’t waste your money. Insurance companies have ruined our industry. Don’t support them. Just be careful not to ding the plane. If you crash, you’re most likely dead and it won’t matter 😛

    But if you insist, go through AOPA for the best deals. But read the terms. You may find it doesn’t cover what you might expect. Plus if you are working for a school, they are the responsible party. Not you.

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  2. Kent Shook on Feb 15, 2011

    I’m no fan of the insurance industry either, but if you ding something it’s not them who’s going to be hurting, it’s you.
     
    What you should do is check on the FBO’s insurance policy. If you are an employed CFI (as opposed to an independent contractor), I would hope that the FBO would buy insurance that covers you (as long as you do all your billing through them). If you’re a freelancer, you need insurance. Also, when you rent, you probably need insurance. There are FBO’s whose insurance policies cover renters as named insured, but they’re incredibly rare.
     
    Speaking of which – There’s an important distinction between named insured and named pilot. If you get added to someone’s insurance policy as a named pilot, that simply means that the insurance company will cover the owner’s costs if you damage the plane – And then they’ll cover their costs by coming after you. It’s called “subrogation.” Unless there’s a non-subrogation clause in the policy, you need to be named insured, not just a named pilot.
     
    I don’t carry renters insurance – My club covers me as named insured, so I’d only be on the hook for the $500 deductible. But before you go without renters or CFI insurance, check and see how you’re covered at your particular FBO. You may also want to buy insurance from the same company that your FBO uses – That way, they’re not as likely to go after you even if you’re not covered for the full amount.
     
    If you do buy renters insurance, you may want to go with a $40K or $50K hull coverage level. Even if you do fly the Cirrus, unless you total it you probably won’t cause more damage than that. A prop strike (new prop + engine teardown) may cost in that $40K range on the Cirrus (if it’s an SR22), but there’s no single thing that will cost significantly more than that unless you crash or have to pop the chute.
     
    Finally – The “if you crash you’re most likely dead” thing is bogus. It doesn’t take much to total an airplane. Two of the rentals that have had incidents here in recent memory come to mind. One, they tried to take off with the control lock installed and luckily didn’t try to keep going after they realized it on takeoff, but when they pulled the power they nosed it in pretty hard and snapped the nose gear off along with the prop strike. Totaled. The other was even simpler – Student pilot landed on a snowy runway, lost control during the landing roll, hit a snowbank at the edge of the runway and nosed over. Totaled. Nobody even had any serious injuries in either accident, but the plane was toast.
     
    Be smart.
     

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  3. Matthew Waugh on Feb 15, 2011

    Well to toot my own horn:
     
    http://www.mwaugh.com/Aviation/Articles/insurance.htm
     
    SkyBoy98046’s advice is not very good.
     
    I take it you are an employee flight instructor – in which case you should be covered by the flight schools insurance when working for them, and that should cover you as an instructor when you are instructing for them. When you rent the plane on your own behalf, or if you flight instruct as an independant contractor, then, in my opinion, you should invest in some insurance.

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  4. John D. Collins on Feb 15, 2011

    One thing to consider when deciding if you should buy the insurance or not is your own risk factor.  If you have considerable assets and a good income, you might be a target for a company that will want to subrogate against you to recover their losses.  On the other hand, if you have no assets to speak of and are a poor young flight instructor, no insurance company is going to waste their time and money going after you.

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  5. SkyBoy98046 on Feb 16, 2011

    Matthews advice is not good either. But mine is funny but true.

    I’ve been around the block a few times. And I know what insurance does and doesn’t do.

    Buy insurance, then come back in 5 years and tell me you wish you had spent your money on something better. 😉

    If you want it, buy it. Sorry my opinion about insurance is not what you want to hear.

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  6. James MacGregor CFI on Feb 17, 2011

     Well I don’t agree with John’s advice, his opinion is that of the illegal immigrants driving with no insurance, thinking since they have nothing to loose “why not”?
     
     You are a professional ad have a responsibility to your pax/students, act like it!
     You are flying with someone’s mother, father, son or daughter you NEED to have insurance incase something happens. 
     
     If you should biff a landing and someone gets hurt, they WILL go after you. Words like “garnishing wages” and “credit score” come to mind. If you work for a FBO as an instructor they should provide insurance, however if they don’t or if you’re freelance it is YOUR responsibility.
     
     ALSO according to 91.13 (A) the FAA could go after you as reckless use of an aircraft. In flight training it is foreseeable that a accident may happen, not having insurance is (IMHO) reckless and I do believe if someone gets hurt not only will they garnish your wages but I believe they could also pull your license (as I would hope they would in that situation). Think of it, you are in court, you tell the judge “well I didnt have anything to loose so I didnt pay for insurance”, wonder how thats going to go over…
     
     You are starting off your carrier, do things the right way, make sure you’re insured!!

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  7. John D. Collins on Feb 17, 2011

    James,
     
    I don’t disagree with your advice regarding personal responsibility, they are good points.  My point was a pragmatic point regarding what insurance companies do when they subrogate.  When I operated a flight school, we had a waiver of subrogation clause in our policy and flight instructors were employees (full or part time) were listed as additionally insured.  Flight instructors are not usually well paid and are often motivated by other factors than money, such as love of flying and teaching or as a means to an end to get a better job.  So to pay for insurance so that the insurance company can be reimbursed does not make much sense to me for a struggling CFI without any assets.  If you are going to provide for adequate insurance coverage for liability and hull, you can expect to pay around $1,500 per year ($1,000,000 per accident and $100,000 per passenger liability with $100,000 hull value). 
     
    Having or not having insurance is not a factor in the FAA analysis as to whether or not you will be charged with a 91.13 violation.  See FAA Order 2150.3B, Appendix F for the criteria. Anyone who would tell the judge what you suggest would deserve anything they got if for no other reason than plain stupidity, but that question is not likely to come up. What might come up will be the questions, “Do you have insurance?”, answer “No”.  “Are you employeed?” Answer “No.” “Describe your assets.” Answer “…”
     
    Also, just because someone gets hurt doesn’t mean you were reckless.  If that were the criteria, Sully would be guilty.  Regardless of your insurance status, if you were at fault, you can expect to be sanctioned by the FAA, fired,  and not have a wage to be garnished.
     

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  8. SkyBoy98046 on Feb 17, 2011

    Well said John. 🙂 I vote best response!!

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  9. Micah on Feb 17, 2011

    Kent’s comments regarding subrogation are very good and worth re-reading and understanding for any pilot or instructor who rents aircraft.

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  10. Scott Gault on Sep 05, 2012

    Here is a link to an online application for Non-Owned Insurance. I have found Aviation Marine to be friendly and the website easy to use. Enjoy!

    http://www.aviation-marine.com/non-owned.cfm

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