Non-owner insurance for Sport Pilots using drivers license medicals

Lon33

Lon33

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Lon
I have a Private Pilot certificate but my FAA 3rd Class medical expired so I fly under Light Sport rules with my drivers license as a medical.

I currently rent Light Sport Aircraft from FBOs whose insurance permits them to rent to me. But there is an LSA at an FBO whose insurance policy requires pilots to have an FAA medical, even to fly under Light Sport rules.

I have tried to find a non-owner policy that would fully cover that FBO (not just the deductible) as well as me, so the FBO's policy wouldn't be involved at all when I fly the plane. But I haven't been able to find such a policy.

Has anyone else had this problem and found a solution?
 
I'm just guessing here, but I suspect the FBO's insurer would cancel the FBO's coverage if they found out the FBO was violating the terms of their policy even if you had your own policy which made the FBO an insured. Have you discussed this with that FBO to see if they are even willing to do it if you find such a policy? Do you know if they've run this past their insurer?

In any event, this would be a significantly unusual policy, so you might have to go to nontraditional underwriters to get such a policy written -- think Lloyd's of London or the like.
 
I agree that if renting to me did violate the terms of the FBO's policy, the insurance company might cancel the policy. On the other hand, if the policy simply excludes coverage for flights by pilots without FAA medicals, renting to me wouldn't be a violation of the policy. My flights would simply be flights not covered by the FBO's policy. And that's why I've been looking -- without success -- for a policy that would cover the FBO, as well as me, when I fly the FBO's LSA.

I have spoken with the FBO's owner about all sorts of ways to get me insured, including my purchasing a supplement or rider to his policy from his own insurance company -- a no-go, according to the FBO's insurance agent. I haven't asked him what he would think of my getting my own policy that would cover him too, because I haven't been able to find such a policy. Before he can yes, or even no, he would need to see the actual policy I propose to cover him with. That's the reason for my post here -- to see whether anyone else has found an insurance company that issues such a policy.

By the way, your suggestion that I go to a nontraditional underwriter was a good idea, and Lloyd's of London was a good example, because Lloyd's has a reputation for insuring unusual and even odd-ball risks. In my case, though, Lloyd's is the problem, not the solution, because the FBO's owner tells me that his insurance company is . . . Lloyd's of London!
 
Lon33 said:
By the way, your suggestion that I go to a nontraditional underwriter was a good idea, and Lloyd's of London was a good example, because Lloyd's has a reputation for insuring unusual and even odd-ball risks. In my case, though, Lloyd's is the problem, not the solution, because the FBO's owner tells me that his insurance company is . . . Lloyd's of London!
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In that case, you may have hit the wall. But good luck in your efforts.
 
When I was active in flying club operation we had a thing called "breach of warranty" to cover students that lied to us any incidents that were due to things we didn't know about would cover us (and the aircraft owner). Of course, in order not to lose this coverage, we really had to not give a wink and nod to people who would want to cheat.

But even with this, as Ron points out, whatever YOUR policy is wouldn't matter. We'd still risk losing our coverage if we were to break the terms of the policy.

Further many FBOs and clubs don't own their planes, so not only do you have to convince the FBO that your policy would protect them in case you did something stupid, you'd also have to convince them to float it with the owners.
 
I agree with everything Flying Ron had to say about warranties. I'm not looking for something that would be a wink and a nod. I'm looking for something that would be completely above-board, legal and ethical. I also agree with what Ron had to say about getting the owner's approval. The LSA I want to rent is leased to the FBO, and I have spoken to the plane's owner. If he weren't willing to accept the kind of policy I'm looking for, that'd be the end of the matter, even if the FBO were OK with it. Because I haven't been able to find the kind of policy I'm looking for, I haven't been able to show the owner anything I'd like him to say yes to.

I'm not trying to trick or fool anyone or any insurance company. I'm looking for a solution -- even if it costs me money -- to the problem of insurance companies that won't allow pilots to fly LSAs under Light Sport rules unless they have FAA medicals, even though the FARs do not require FAA medicals.

I know that I'm not the only pilot who has this problem. I've read complaints by other certificated pilots (on this board or perhaps another) about not being able to rent LSAs without an FAA medical. But those posts were just that -- complaints. I was convinced there is a solution, because earlier in my career (I'm a lawyer and law professor), I evaluated risks for the underwriters at a major insurance company, and no matter how threatening the risk was, there was always a work-around that would enable the company to issue a policy. The insurance was not aviation insurance; it was liability insurance for movie and TV production companies (where the risks were lawsuits for defamation, invastion of privacy, copyright and trademark infringement -- that sort of thing). But in that line of insurance, I never encountered a situation in which the underwriters' response was "no insurance, no how, no way." And "no, no, no" is the only response I've gotten, so far, in my quest for an aviation policy that would cover me -- just me -- when I fly one particular and identified by tail number LSA. I find this strange, and it will become even stranger when the FAA or Congress permits pilots to fly planes that are bigger than LSAs with just a drivers license medical.
 
Lon33 said:
I also agree with what Ron had to say about getting the owner's approval. The LSA I want to rent is leased to the FBO, and I have spoken to the plane's owner.
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The fact that the plane is leased, not owned, by the FBO complicates things further. If that plane is financed, the bank involved would probably also have to approve along with the actual owner, and you'd probably have to make the bank a payee on the hull portion of the insurance (at least to the outstanding balance on the principal). I imagine the owner would also have to be an insured along with the FBO, probably for both hull and liability.

All things considered, it's a pretty complex problem, and I would not get my hopes up that this will work, but I do wish you good luck in your endeavor.
 
Lon33 said:
By the way, your suggestion that I go to a nontraditional underwriter was a good idea, and Lloyd's of London was a good example, because Lloyd's has a reputation for insuring unusual and even odd-ball risks. In my case, though, Lloyd's is the problem, not the solution, because the FBO's owner tells me that his insurance company is . . . Lloyd's of London!
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Lloyd's is a market and a regulator, not an insurance company. I admit to knowing next to nothing about GA insurance, but I wouldn't assume that it's impossible to get a policy with the terms you want via any Lloyd's agent just because your FBO didn't.
 
It sounds to me that it would be a whole lot less trouble to just get your medical renewed...unless of course you have reason to believe you'd not pass.
 
patmike said:
What's wrong with the place you currently rent from?
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Ah . . . Good question -- exactly the kind of question a trial lawyer would ask. :) The answer is: there's nothing wrong with the FBO from which I now rent. I rent there happily and frequently (or as frequently as the weather permits). The FBO from which I would like to rent, but can't, has a newer and better equipped plane that rents for less. If flying were the only issue, I'd shrug and forget about that plane and its FBO. But the no-insurance-for-sport-pilots issue has me so puzzled -- based on my experience as an insurance underwriter lawyer -- that I can't help but look for a solution, even though I don't need a solution in order to keep flying, quite happily.
 
StinkBug said:
It sounds to me that it would be a whole lot less trouble to just get your medical renewed...unless of course you have reason to believe you'd not pass.
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Getting a medical renewed is never without trouble and expense. And even if I did get my 3rd class medical back, I'd still rent LSAs simply because I prefer them to the C172s I was flying. Also, for me, it's become the principle of the thing. I know that insurance companies are permitted to insure only the risks they're willing to take, and are permitted to decline to insure risks they aren't willing to take. I don't challenge that. But I do wonder why a company that's in the business of risk-taking would decline to issue insurance that covers pilots who are authorized to fly by the FAA -- an agency that's never been considered a "softy." There are other parameters available to insurance companies, quite apart from excluding coverage altogether: higher premiums and greater deductibles come immediately to mind.
 
Lon33 said:
Getting a medical renewed is never without trouble and expense.
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Compare the cost of a Third Class medical every two years with the annual cost of the sort of insurance policy you want, and I think the Third Class medical is going to win hands-down unless you have some really difficult medical certification issue.
 
The FAA and the insurer's interests aren't quite aligned though - the FAA has a 'public protection' mission. It doesn't much care if you kill yourself crashing a single-seat ultralight into a tree and requires no training or medical to that. The FAA training and medical standards go up (broadly) with potential for harm to third parties and ability to carry passengers - especially paying ones.

Whereas to the insurer, an $100k LSA wreck is just as bad as a $100k 172 wreck. Actually, I wouldn't be surprised if the average rental LSA is worth a lot more than the average rental spam can..

Just speculating. Definitely not saying this rationale actually makes any sense on either part. :)
 
Lon33 said:
I currently rent Light Sport Aircraft from FBOs whose insurance permits them to rent to me.
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Ask that FBO for the name of their insurer and the policy they purchased, then ...
But there is an LSA at an FBO whose insurance policy requires pilots to have an FAA medical, even to fly under Light Sport rules.
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... take that info to the second FBO and suggest they look into switching. Tell them that their current insurance policy makes it impossible for ALL sport pilots operating under a driver license to rent ANY of their planes. If they don't need that extra business (and you are a genuine prospect, at least) then they can save everyone a lot of hassle by advertising that sport pilots need not apply.
 
Lon33 said:
Getting a medical renewed is never without trouble and expense.
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I'm aware of what's involved, as I just got a first class a couple months ago. Compared to what you are describing it was utterly painless. Actually, it was utterly painless compared to most anything. Took under 45min and cost less than an hour of airplane rental. I guess if you fear not being able to pass your medical it's another story, but unless that is the case you seem to be someone searching for a problem for your solution.
 
Lon33 said:
But the no-insurance-for-sport-pilots issue has me so puzzled -- based on my experience as an insurance underwriter lawyer -- that I can't help but look for a solution, even though I don't need a solution in order to keep flying, quite happily.
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Kind of puzzling to me too. You haven't said so but do they provide training for sport pilots,and do they require their students to have a medical? If not during training are the students required to get a medical after they get their certificate and become a renter? If they require a medical for both their policy defeats the purpose of a sport pilot certificate. So why would anyone go there for either?
 
patmike said:
Kind of puzzling to me too. You haven't said so but do they provide training for sport pilots,and do they require their students to have a medical? If not during training are the students required to get a medical after they get their certificate and become a renter? If they require a medical for both their policy defeats the purpose of a sport pilot certificate. So why would anyone go there for either?
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No, they don't provide sport pilot training. At the instance of their insurance company, they treat the LSA as though it were a 4-seat Cessna or Piper, and provide training and rent only to those who have 3rd Class medicals or better. The attraction of the plane -- they hope -- is that it's new, has a glass panel with twin displays, and is less expensive than their 4-seat planes. I'm attracted to it because it's new, has a glass panel with twin displays, is inexpensive . . . and because it's an LSA. Alas, the LSA part doesn't help me.
 
Jim Logajan said:
Ask that FBO for the name of their insurer and the policy they purchased, then ... take that info to the second FBO and suggest they look into switching.
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Yes, this is exactly what I've done. Unfortunately, changing insurance companies is a bigger deal than changing underwear. So even if the FBO is willing to do so, it'll have to wait until its current policy expires. It's like turning around a huge passenger ship: it can be done, but it takes a lot of energy and time.
 
Lon33 said:
Yes, this is exactly what I've done. Unfortunately, changing insurance companies is a bigger deal than changing underwear.
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Is the no-medical insurance any more expensive than the insurance which requires a medical? One of the reason some schools require a medical is because their insurance is cheaper that way and that keeps their prices more competitive.
 
Ron Levy said:
Is the no-medical insurance any more expensive than the insurance which requires a medical? One of the reason some schools require a medical is because their insurance is cheaper that way and that keeps their prices more competitive.
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I agree that cost is a likely explanation. I don't know what no-medical insurance would cost an FBO, or what medical-only insurance would cost for an otherwise identical policy. No-medical policies must be affordable, though, because two sport pilot flight schools in my area have such policies, and - more to the point - a third school that has just one LSA and a lot of bigger planes has a policy that allows it to rent its LSA to pilots who have drivers license medicals but not an FAA medical. Of course, "affordable" leaves open the possibility that no-medical policies are more expensive than medical-only policies. And if that's so, the FBO from which I would like to rent will have to decide not only whether it's willing to change insurance companies, but also whether my business (and the business of other drivers license only pilots) will offset the additional cost.
 
Lon33 said:
No, they don't provide sport pilot training. At the instance of their insurance company, they treat the LSA as though it were a 4-seat Cessna or Piper, and provide training and rent only to those who have 3rd Class medicals or better. The attraction of the plane -- they hope -- is that it's new, has a glass panel with twin displays, and is less expensive than their 4-seat planes. I'm attracted to it because it's new, has a glass panel with twin displays, is inexpensive . . . and because it's an LSA. Alas, the LSA part doesn't help me.
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Well that's kind of dumb. Train in an LSA for private.
 
patmike said:
Well that's kind of dumb. Train in an LSA for private.
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It's become fairly popular. To which do you think modern PP customers would be more attracted? A clapped-out 1979 Cessna 152 or a brand new Evektor SportStar with all the goodies listed above, not to mention a lot more head, shoulder, elbow, and hip room?
 
Ron Levy said:
It's become fairly popular. To which do you think modern PP customers would be more attracted? A clapped-out 1979 Cessna 152 or a brand new Evektor SportStar with all the goodies listed above, not to mention a lot more head, shoulder, elbow, and hip room?
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I have to agree with most LSA's being roomier. I took my first discovery flight in a 172 and the instructor and i were shoulder to shoulder. My second was in a Flight design CTLS which was so much more comfortable. I think the problem would be the availability of LSA's after one get's his ticket. I'm not sure of the numbers but I think the more conventional airplanes out number the LSA's by quite a bit. I know that because being a sport pilot I have the opposite problem, not enough LSA's in my area.
 
That certainly was what Cessna was banking on for the groundcatcher. Didn't happen enough to support their slavish obsession with short term share price.
 
Ron Levy said:
I'm just guessing here, but I suspect the FBO's insurer would cancel the FBO's coverage if they found out the FBO was violating the terms of their policy even if you had your own policy which made the FBO an insured. Have you discussed this with that FBO to see if they are even willing to do it if you find such a policy? Do you know if they've run this past their insurer?

In any event, this would be a significantly unusual policy, so you might have to go to nontraditional underwriters to get such a policy written -- think Lloyd's of London or the like.
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No, this would not be an issue, it's not uncommon at all in fact in the leasing industry. His insurance becomes primary and the FBO insurance is not in effect for that contract. BYO Insurance into a lease happens all the time.
 
Lon33 said:
No, they don't provide sport pilot training. At the instance of their insurance company, they treat the LSA as though it were a 4-seat Cessna or Piper, and provide training and rent only to those who have 3rd Class medicals or better. The attraction of the plane -- they hope -- is that it's new, has a glass panel with twin displays, and is less expensive than their 4-seat planes. I'm attracted to it because it's new, has a glass panel with twin displays, is inexpensive . . . and because it's an LSA. Alas, the LSA part doesn't help me.
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Yeah, call an insurance man on this, what you want to get done can get done. It may require a formal lease agreement with the FBO, but this is as easy as writing the current rental deal down and signing it into an At Will relationship.
 
Henning said:
No, this would not be an issue, it's not uncommon at all in fact in the leasing industry. His insurance becomes primary and the FBO insurance is not in effect for that contract. BYO Insurance into a lease happens all the time.
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And that's covered in the terms of the lease. It's not covered here.
 
Henning said:
He's asking how to get insured in the plane as an LSA flying as an SP. . . .
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Yes, that is what I'm asking. I've spoken with the agency that gets me my current (ordinary) renters' insurance, and was told that the insurance I want isn't available. I also emailed a detailed description of what I want to an agency that had what looked like an expensive ad in a pilot magazine (not just a little classified ad); and I got no response whatsoever.

Henning, is there an agency, broker or insurance company you'd recommend? If so, feel free to PM me about it.
 
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