Insuring a plane for instruction of others?

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Pre-takeoff checklist
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Ames, IA
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david
I'm a CFI looking for options on a plane to do limited instruction with. Obviously insurance is going to be much higher than if I was just insuring for my own flying. But from what I've been told from one insurance person, my only option is a commercial policy that lets me rent it to whoever, do flight instruction for hire with whoever, and basically use it for any non-charter commercial purposes.

That seems like overkill. I'm not trying to run the plane in FBO operation open to everyone - all I want is to do is teach maybe 3 or 4 people in the plane (private and instrument). Is there a way to make this work without the expense of a full commercial policy?

I've heard of some arrangements where an instructor is able to to name 3 students on the policy at a time and can only teach those three. I've also heard of some people doing liability only and requiring students to have non-owned coverage sufficient to cover a total loss. Someone suggested making a flying club where students were club members and could receive instruction and also fly the plane if they have (or once they get) a private pilot certificate.

Are any of these actually options that would lead to lower insurance costs? Are there other ways to accomplish what I want?
(Not having any insurance isn't an option that will work for my situation)
 
Don't know what your plane is worth but commercial runs us around 3 times non commercial which I don't think is terrible. They will want to fly it solo and it's really the only option. As named I'm pretty sure they already have to be a pilot or part owner at least.
 
Put the plane in an LLC. Sell the student a $2000 membership interest in the LLC and carry a note at nominal APR. They are now co-owners of the plane and can be named on the policy. Write the operating agreement in a way that allows you to buy back their interest whether they want to sell or not.

You can name additional pilots on the policy whether they own a share or not. But that just means the insurance protects you if they ball it up, it doesn"t protect them against demands by the ins Co or third parties.

Someone here mentioned previously that they have an endorsement on a non-commercial policy that allows them to do limited dual instruction like BFRs and IPCs. I don't believe it extended to student solo flights.
 
Theboys said:
Don't know what your plane is worth but commercial runs us around 3 times non commercial which I don't think is terrible. They will want to fly it solo and it's really the only option. As named I'm pretty sure they already have to be a pilot or part owner at least.
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I wish I could get a commercial policy at only 3 times as much.
I'm looking at older model 4 seat trainers, maybe 30k-50k range. Insurance for me is well under 1000. Same planes, a commercial policy is in the 5000-6000 range. Maybe I'm seeing sticker shock from comparing apples to oranges. I guess the proper comparison is 5000-6000 vs whatever it would cost to insure a student pilot for private use.
 
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I guess the proper comparison is 5000-6000 vs whatever it would cost to insure a student pilot for private use.
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Yup.

The other option to keep cost down is to buy a 2-seat trainer like a AA1-B or C150. How much do you weigh ?
 
weilke said:
Put the plane in an LLC. Sell the student a $2000 membership interest in the LLC and carry a note at nominal APR. They are now co-owners of the plane and can be named on the policy. Write the operating agreement in a way that allows you to buy back their interest whether they want to sell or not.

You can name additional pilots on the policy whether they own a share or not. But that just means the insurance protects you if they ball it up, it doesn"t protect them against demands by the ins Co or third parties.
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That first idea sounds a bit questionable, but I guess it's not that much different from a club or partnership.

If I can name students additional pilots on a policy, I might be able to find a way to make that work. Anyone know how many people I could have as additional pilots before the insurance company objects? And are they going to get annoyed if I change names around later?
 
\__[Ô]__/ said:
That first idea sounds a bit questionable, but I guess it's not that much different from a club or partnership.
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Well, formally it is no different from any other shared ownership. But yes, if done the way I described, I would be concerned about questions if a student pilot wrecks the plane. Also, some private use policies specifically exclude primary flight instruction by a owner.

4-5 named pilots. Beyond that you get into 'flying club' or commercial insurance.
 
weilke said:
4-5 named pilots. Beyond that you get into 'flying club' or commercial insurance.
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Our insurance allows 4 people to be named insured with an open pilot policy. As soon as we tried to add a 5th they wanted to take away the OPP and get ready to switch us to a commercial policy. We didn't end up adding the 5th person.

I agree getting a small 'club/partnership' going and just have your students buy in and out with a small nominal fee.
 
coloradobluesky said:
I think I saw where AVEMCO had "CFI owned aircraft" insurance that may let you instruct in your airplane. Call and ask.

https://avemco.com/secure/cfi-owned-aircraft-insurance.aspx
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That.

Or roll with having them get renters, if they screw up solo you're covered, if you biff it with the student or your plane chits the bed, well, yeah.

Figure the largest chance of failure is that of the solo student/renter, as most accidents are on the PIC.


Play the odds and run the numbers, see what makes the most $$ sense for you, that's what the insurance industry does.
 
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