Help me determine how much insurance to get. ...please

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jconway2002

Pre-takeoff checklist
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jconway2002
Hello,

I am 7 hours into my training, and looking into getting renters insurance. It seems my school has insurance to cover me, but I want to make sure I wont get screwed if something were to happen. Here is what my schools rental agreement says about insurance:

11. Grey Eagle aircraft and renters are cover by insurance with liability coverage in the amount of $1,000,000.00 per occurrence and $100,000.00 per passenger with $2500.00 deductible. The Renter is responsible for the deductible if the damage is due to pilot error. Inquire at the Grey Eagle office about available additional renter's insurance coverage.

12. The Renter agrees to assume all liability and indemnify Grey Eagle Aviation Inc. against claims by third parties in which the Renter or Renter's actions are deemed negligent. In the event legal action is required, the Renter agrees the prevailing party will be entitled reasonable attorneys fees/costs that may be awarded by the court/arbitrator. This agreement shall be binding and all rights, liabilities and duties hereunder are personal to both parties and shall not, without written consent of the other party, be mortgaged, hypothecated or otherwise encumbered. This Agreement is also binding on heirs, executors, guardians, conservators, successors, and assigns of both parties.



...Soooo, what the heck does that mean?:idea:

Thanks!
 
Sounds like if you prang an airplane, you pay the $2500 deductible. I'd imagine if you got your own renters insurance on top of that, they would cover the deductible.
 
DavidWhite said:
Sounds like if you prang an airplane, you pay the $2500 deductible. I'd imagine if you got your own renters insurance on top of that, they would cover the deductible.
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I can deal with that, but what are the chances their insurance company would come after me if something did happen?
 
jconway2002 said:
Hello,

I am 7 hours into my training, and looking into getting renters insurance. It seems my school has insurance to cover me, but I want to make sure I wont get screwed if something were to happen. Here is what my schools rental agreement says about insurance:

11. Grey Eagle aircraft and renters are cover by insurance with liability coverage in the amount of $1,000,000.00 per occurrence and $100,000.00 per passenger with $2500.00 deductible. The Renter is responsible for the deductible if the damage is due to pilot error. Inquire at the Grey Eagle office about available additional renter's insurance coverage.

12. The Renter agrees to assume all liability and indemnify Grey Eagle Aviation Inc. against claims by third parties in which the Renter or Renter's actions are deemed negligent. In the event legal action is required, the Renter agrees the prevailing party will be entitled reasonable attorneys fees/costs that may be awarded by the court/arbitrator. This agreement shall be binding and all rights, liabilities and duties hereunder are personal to both parties and shall not, without written consent of the other party, be mortgaged, hypothecated or otherwise encumbered. This Agreement is also binding on heirs, executors, guardians, conservators, successors, and assigns of both parties.



...Soooo, what the heck does that mean?:idea:

Thanks!
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It means that if you crash the plane if the engine blows up/ whatever accident that was not due to your negligence and don't hurt anyone more than $100ks worth per pax or anything else of a value to a total non aircraft amount of $1MM you owe $2500 for the plane and everything else is covered.

If however you are found negligent, that insurance company can subrogate back to you for the money.

If you are in a state where you can buy a liability umbrella rider that covers aviation (believe it or not, some do) on your homeowners policy (if you own a home) that is the least expensive way I know to cover your risk, I'd suggest $1MM minimum depending on your personal wealth and exposure. There are also other liability umbrellas that can be purchased individually that from my shopping experience come out a much better value (since they cover you under all circumstances, not just flying) than aircraft non owner policies. Since you buy the liability umbrella and are renting the plane, the hull of the plane is covered as your liability as well as secondary insurance if the primary carrier decides to subrogate. It also buys you YOUR lawyer in court looking out for your interests rather than riding on the the flight schools insurance's lawyer who is NOT looking out for your interest, in fact, he wants to show you're negligent so they can subrogate on you.

I do not believe however that you can be held negligent when a student pilot so long as you are operating within your instructors endorsements (and even outside unless it was an egregious act on your part) .
 
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jconway2002 said:
12. The Renter agrees to assume all liability and indemnify Grey Eagle Aviation Inc. against claims by third parties in which the Renter or Renter's actions are deemed negligent. In the event legal action is required, the Renter agrees the prevailing party will be entitled reasonable attorneys fees/costs that may be awarded by the court/arbitrator. This agreement shall be binding and all rights, liabilities and duties hereunder are personal to both parties and shall not, without written consent of the other party, be mortgaged, hypothecated or otherwise encumbered. This Agreement is also binding on heirs, executors, guardians, conservators, successors, and assigns of both parties.
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I'm no lawyer but item 12 sounds like the FBO's insurance might not cover you fro a liability perspective so you probably ought to carry your own liability/property damage insurance.
 
How much liab. insurance do the exprts recommend these days?
XXX% of your net worth?
Seems like if you get too much it attracts flies to the honey?
 
Carry enough hull to pay for the airplane and get as much liability as you can reasonably afford.
 
jesse said:
Carry enough hull to pay for the airplane and get as much liability as you can reasonably afford.
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He can't insure the hull since he doesn't have an insurable interest. Non owners policies are straight liability policies with hull limitations put on them. I have never seen them as a good value.
 
Get enough hull coverage to cover the FBO's deductible. This doesn't depend much on who you are.

And get enough liability to protect your assets. This depends enormously on who you are.

If you are an MD close to retirement you might have a lot of assets to protect and you'll want the most liability you can get. I think rental policies top out at $1 million liability per event.

OTOH, if you are a broke 20-year-old who visibly has no assets, then maybe the smallest amount of liability offered. Nobody will sue you if it looks like getting blood out of a turnip.
 
Henning said:
He can't insure the hull since he doesn't have an insurable interest.
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I don't understand the "insurable interest" idea. If the insured has the hull coverage, rents a plane, mashes the wingtip into a hangar, and then files a claim, the insurance should pay. That's what the policy is for.
 
NoHeat said:
I don't understand the "insurable interest" idea. If the insured has the hull coverage, rents a plane, mashes the wingtip into a hangar, and then files a claim, the insurance should pay. That's what the policy is for.
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"Hull Coverage" is property coverage. Unless you have ownership of, or a lien on, a property (ie 'nothing to loose) you have no insurable interest and they will not sell you insurance. Same with life insurance otherwise people would be destroying/killing things they do not value for the pay out. When you are a renter, everything is liability, in other words all the payments will go to others for damages you did. What a non owners policy does is it restricts their exposure to your liability with regards to the hull of the aircraft.
 
Henning, you can buy non owners insurance with hull coverage from any of the companies that sell non owners insurance.
 
jesse said:
Henning, you can buy non owners insurance with hull coverage from any of the companies that sell non owners insurance.
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Sigh, read what I wrote above again. It is a hull restricted liability limit to the $1MM or what ever the Total Liability, same as the $100k per passenger. Calling it "Hull Coverage" isn't technically correct, and the premium values are different as is who they pay.
 
Henning said:
I do not believe however that you can be held negligent when a student pilot so long as you are operating within your instructors endorsements (and even outside unless it was an egregious act on your part) .
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If the instructor is in the plane, yes, but not if you're solo. Then you are the PIC and any negligence comes back to you first. There is always a chance of then suing your instructor for negligent instruction, but that's a long shot.

So, you need at least $2500 hull coverage to cover the deductible, and a good amount of liability (typically $1M) to cover your liability to third parties. Additional hull coverage would be a good idea to help with uninsured losses such as loss of use, etc, for which the FBO may claim against you personally.
 
Ron Levy said:
If the instructor is in the plane, yes, but not if you're solo. Then you are the PIC and any negligence comes back to you first. There is always a chance of then suing your instructor for negligent instruction, but that's a long shot.

So, you need at least $2500 hull coverage to cover the deductible, and a good amount of liability (typically $1M) to cover your liability to third parties. Additional hull coverage would be a good idea to help with uninsured losses such as loss of use, etc, for which the FBO may claim against you personally.
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Thing is a student can't be deemed negligent (outside the aforementioned egregious act) because they have not yet been deemed competent. IOW, everything is 'an accident' as they are still learning and training accidents happen.
 
Henning said:
Thing is a student can't be deemed negligent (outside the aforementioned egregious act) because they have not yet been deemed competent.
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Actually, they have -- by the instructor who signed them off for solo. In any event, a solo Stident Pilot may indeed be found negligent and liable for damages resulting from an accident when s/he was PIC.
 
Henning said:
Sigh, read what I wrote above again. It is a hull restricted liability limit to the $1MM or what ever the Total Liability, same as the $100k per passenger. Calling it "Hull Coverage" isn't technically correct, and the premium values are different as is who they pay.
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Call it whatever you want -- If you buy straight non-owner liability coverage from Avemco they won't be paying a dollar towards the airplane if you bang it up and the owner or their insurance company comes after you. (Well actually Avemco includes $1000 to cover a deductible with all their policies) If you want protection to cover the actual value of the aircraft you'll be paying more.

Liability of:
1,000,000 total with 100k per person would be $205 per year for me.

If I wanted enough aircraft damage liability to cover the airplanes I could very well be piloting, that'd be about 100k in value, which would be another $1400 per year.

So yes I may have mixed the terms up a bit but the important thing for people to realize is their body and property liability coverage isn't going to do them a damn bit of good in the most likely scenario which is them bending the airplane and being sued for the value.
 
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Ron Levy said:
Actually, they have -- by the instructor who signed them off for solo. In any event, a solo Stident Pilot may indeed be found negligent and liable for damages resulting from an accident when s/he was PIC.
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Nope, they have not been deemed competent until they pass they're checkride, a CFI does not have that authority and the student is still acting under the CFI's liability, hence the ability to to put restrictions on the endorsement. The CFI is only signing off that they have received the required training and in their opinion are safe in the limited capacity prescribed in the endorsement. When a student has an accident, who gets in trouble if anyone?
 
Henning said:
Nope, they have not been deemed competent until they pass they're checkride, a CFI does not have that authority and the student is still acting under the CFI's liability, hence the ability to to put restrictions on the endorsement. The CFI is only signing off that they have received the required training and in their opinion are safe in the limited capacity prescribed in the endorsement. When a student has an accident, who gets in trouble if anyone?
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Total fantasy.
 
Henning said:
Nope, they have not been deemed competent until they pass they're checkride, a CFI does not have that authority and the student is still acting under the CFI's liability, hence the ability to to put restrictions on the endorsement. The CFI is only signing off that they have received the required training and in their opinion are safe in the limited capacity prescribed in the endorsement. When a student has an accident, who gets in trouble if anyone?
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It depends. If the student gets into an accident because they obeyed the regulations and it was determined to be a fault in the training I provided then I will.

If the student gets into an accident because they ignored my limitations, loaded 3 friends into the airplane, and took off into a 100 ft overcast layer then it won't be my fault.

I tell my students that if I ever catch them ignoring my limitation or purposefully violating a regulation our relationship will terminate immediately. I've never had a problem. Obviously the above doesn't apply if they needed to do so because of a safety reason.
 
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jesse said:
It depends. If the student gets into an accident because they obeyed the regulations and it was determined to be a fault in the training I provided then I will.

If the student gets into an accident because they ignored my limitations, loaded 3 friends into the airplane, and took off into a 100 ft overcast layer then it won't be my fault.
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Did you miss both times I said "except for an egregious act"? Everything you listed is an egregious act.
 
Henning said:
Nope, they have not been deemed competent until they pass they're checkride, a CFI does not have that authority and the student is still acting under the CFI's liability, hence the ability to to put restrictions on the endorsement. The CFI is only signing off that they have received the required training and in their opinion are safe in the limited capacity prescribed in the endorsement. When a student has an accident, who gets in trouble if anyone?
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Sometimes the student... ask me how I know. And yes, sometimes students do operate outside of their limitations and make bad decisions. In fact sometimes they directly ignore advise from older, wiser people.

Ryan
 
Henning said:
Thing is a student can't be deemed negligent (outside the aforementioned egregious act) because they have not yet been deemed competent. IOW, everything is 'an accident' as they are still learning and training accidents happen.
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A student driver is held liable. A friend went through her own garage with her mom in the car as the supervising driver. Their own policy sued the driver, not the mom. She's over 18 so it's on her. I'd assume the same applies to aviation. I crash and it would be my fault as well as my CFI's.
 
bigblockz8 said:
A student driver is held liable. A friend went through her own garage with her mom in the car as the supervising driver. Their own policy sued the driver, not the mom. She's over 18 so it's on her. I'd assume the same applies to aviation. I crash and it would be my fault as well as my CFI's.
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Liable of course, she did it. A student pilot is still liable, negligence is NOT a requirement for liability; they are not the same thing. You can have an accident and not be negligent. The policy in the OP only subrogates in instances of Negligence.
 
Henning said:
Liable of course, she did it. A student pilot is still liable, negligence is NOT a requirement for liability; they are not the same thing. You can have an accident and not be negligent. The policy in the OP only subrogates in instances of Negligence.
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Based on that rental agreement -- who knows what their actual insurance policy says. IME many places have no idea what the insurance policy says and I've seen plenty of cases where it conflicts with the rental agreement.
 
jesse said:
Based on that rental agreement -- who knows what their actual insurance policy says. IME many places have no idea what the insurance policy says and I've seen plenty of cases where it conflicts with the rental agreement.
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That would be rather negligent on their part leaving them open to liability.
 
jesse said:
Based on that rental agreement -- who knows what their actual insurance policy says. IME many places have no idea what the insurance policy says and I've seen plenty of cases where it conflicts with the rental agreement.
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+1

Many documents presented by rental places "describing" their insurance are complete crap.

Get a copy of the actual insurance policy. Then read.

Any club writing and distributing these blurbs without a disclaimer and offer to view the actual policy, is just making things more difficult than they already are.

And another caution: Policies can be and sometimes are changed when renewed. Especially if the club has had accidents.
 
One of the greatest benefits of having your own non- owned liability policy is that the insurance company will provide a legal defense in the event you are sued for negligence. That's worth the cost of poker right there.
 
denverpilot said:
+1

Many documents presented by rental places "describing" their insurance are complete crap.

Get a copy of the actual insurance policy. Then read.

Any club writing and distributing these blurbs without a disclaimer and offer to view the actual policy, is just making things more difficult than they already are.

And another caution: Policies can be and sometimes are changed when renewed. Especially if the club has had accidents.
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Not too smart but if they mess it up the wrong way, they are liable for the difference.
 
Henning said:
Liable of course, she did it. A student pilot is still liable, negligence is NOT a requirement for liability; they are not the same thing. You can have an accident and not be negligent. The policy in the OP only subrogates in instances of Negligence.
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Actually, negligence is required to establish liability to injured third parties unless there is a "strict liability" statute involved, which there isn't with Student Pilots. Of course, negligence alone is not sufficient to establish liability, but it is necessary. You might want to review the chapters on insurance and liability in J. Scott Hamilton's "Practical Aviation Law, 4th ed.," before proceeding further in this discussion.
 
A friend went through her own garage with her mom in the car as the supervising driver. Their own policy sued the driver
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I would have to guess that in this scenario, the student driver did not have a permit, or parent had not called the ins. co. to add the new driver.
 
Henning said:
Same issue, they can't establish as a fact that "I hadn't learned that yet" as untrue.
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Not so. All they need do is subpoena the Student's logbook or other training records and the Student's instructor's testimony.

Negligence has to be PROVEN unless there is strict liability.
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Agreed, but it is not an insurmountable task even when a Student Pilot is involved.
 
Ron Levy said:
Not so. All they need do is subpoena the Student's logbook or other training records and the Student's instructor's testimony.

Agreed, but it is not an insurmountable task even when a Student Pilot is involved.
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Considering the detail in which log book enries are made, the possibility that it will show that the instructor covered every detail will be pretty damned difficult to establish, especially in court. Juries rarely side with insurance companies unless there is fraud involved.
 
If paying out of pocket for a prop strike, running off the runway, or forced landing into a field would compromise your financial future, buy the insurance for the amount of a probable loss (FBO deductible, cost of likely repairs, etc). It may or may not cover you. You may or may not need it. There are no absolutes, especially in insurance.
 
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