Renter's insurance after incident as student

  • Thread starter StudentPilot0525
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StudentPilot0525

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A little less than a month ago, I did a stupid thing and caused some minor damage to my flight school's airplane. It involved bumping into something while taxiing. I got fixated on something in the plane and lost situational awareness. The plane was repaired quickly, but the school would only communicate with my insurance and made it seem like they were going to come after me later if they "found" any more damage to the plane caused by the incident. So I was stupid and let insurance handle it. They paid the claim with no problem (after catching that the school was trying to submit some fishy charges). It ended up being about $2k. I know I should have paid out of pocket, but by the time I was even told the charges, the school had already signed the insurance settlement.

So I have been grounded for about a month, and I'm ready to get back to learning. However, my insurance is up for renewal in about a month. My application is in progress, so I guess they're deciding if they're going to renew or not. My broker said he "thinks I'll be okay" since I am not applying for a new policy, but after reading people's stories I don't know if that will be the case. The broker said if I was applying for a new policy, I would be denied. It looks like every insurer out there asks about claims within the last 3-5 years, so they probably would not be okay with one in the last month.

Do I have any chance at not being dropped by insurance or finding another policy? I've been slowly working on becoming a pilot for a year and a half and I hate to think that it's all over because I made one stupid mistake that wasn't even in flight.
 
What insurance did you have? Call them and ask. Staying with your current company is your best option.
 
Clip4 said:
What insurance did you have? Call them and ask. Staying with your current company is your best option.
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Global Aerospace. I have already applied for renewal and the application is in progress. I was just wondering what my chances are of them renewing it.
 
Cloudhound said:
What are the chances that you bump into something again while taxing?
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Not sure what you mean. I think I'm much less likely to after learning some valuable lessons, but are you saying the insurance will think it's likely to happen again?
 
StudentPilot0525 said:
Not sure what you mean. I think I'm much less likely to after learning some valuable lessons, but are you saying the insurance will think it's likely to happen again?
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I’m not going to speculate on your original question…your broker probably has the most accurate view of underwriters right now.

As far as “does the insurance company think it’s likely to happen again,” I suspect it’s more about watching you for a bit to ensure that you learned the right things from it.
 
StudentPilot0525 said:
Global Aerospace. I have already applied for renewal and the application is in progress. I was just wondering what my chances are of them renewing it.
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You will just have to wait and see. My guess is they will not insure you from the stand point of a yes answer to accident/incident or FAA violation is usually the end of the process for renters insurance.
 
Zeldman said:
This part caught my attention, but there are 2 sides to the story.
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They were charging for loss of use and tried to charge more hours than the plane was actually out of service. Plus they were charging for operating expenses not being incurred while the plane was on the ground, instead of lost profit.
 
RyanShort1 said:
That doesn't sound fishy at all. Operating expenses are how you pay bills...
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I'm just telling you what the insurance told me. They said they were only allowed to charge for the profit they would be making, not the gas or whatever they didn't have to pay for while the plane was on the ground. This is coming from the insurance adjuster, not me.
 
Chip Sylverne said:
You weren't stupid to let insurance handle the claim, that's why you have it. A $2k claim is nothing...I doubt you'll have any trouble renewing.
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Thank you. Several people have told me I was dumb for not just paying out of pocket, but I didn't know what the total was going to be until insurance was already done with it. Plus the original bill was apparently $1k higher and reduced after the insurance found issues with the charges. I truly hope I'll be able to renew, I just have no experience with this sort of thing and I've read so many stories about people being dropped/non-renewed for filing claims.
 
Insurance is a game to be played.

Insured files claim, insurance company ''adjust'' to lower pay out on claim. This keeps going back and forth until a settlement is agreed on.

Out of pocket payment would have been easier, but this is what insurance is for.

I would not lose sleep over the renewal.
 
I can't imagine a company dropping you over a 2K claim but insurance companies can be quirky. Let us know how you make out.
 
DFH65 said:
I can't imagine a company dropping you over a 2K claim but insurance companies can be quirky. Let us know how you make out.
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I will once I hear back. I'm mostly worried about it because I've only had this policy for a year, so I'm not someone they've made a bunch in premiums from yet.
 
Keep in mind at least with house insurance once they know about the claim it’s on your record even if you don’t take the money.
 
StudentPilot0525 said:
I'm just telling you what the insurance told me. They said they were only allowed to charge for the profit they would be making, not the gas or whatever they didn't have to pay for while the plane was on the ground. This is coming from the insurance adjuster, not me.
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True, the school is not going to get fuel reimbursed, but the school should get fixed expenses + lost profits.
 
RyanShort1 said:
That doesn't sound fishy at all. Operating expenses are how you pay bills...
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So it is ok to charge for fuel and oil that was not used???? Or a per hour charge for the 100 hour, that is done on actual flight time?

Fixed costs, just as insurance price normalized over a typical year's flying, I can see that.
 
Pinecone said:
So it is ok to charge for fuel and oil that was not used???? Or a per hour charge for the 100 hour, that is done on actual flight time?

Fixed costs, just as insurance price normalized over a typical year's flying, I can see that.
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I can, of course, see the insurance company disputing fuel and oil, but then, too, a tight operation might have agreements to purchase X amount of fuel per week with the FBO in order to get a discount, and an airplane down for even a week might affect things. Margins in a significant percentage of flight schools are razor thin.
 
I wouldn’t lost sleep over whether your policy will get renewed or not and I wouldn’t try to jump the gun and get a different policy right after a claim is paid.

Doesn’t surprise me the flight school tries to get the most out of a claim, but recovery of profit makes more sense. Trying to recover operating expenses on a plane that isn’t flying? Their hourly rate may include an allowance for overall business profit, not just what the airplane nets on its own. Not sure, but they could have tried a claim that recovered the entire business profit built into the rental rate if they were savvy at their accounting. If the insurance company wanted a detailed breakdown that only included gas, oil, maintenance estimate, airplane insurance expense, etc. then the school would be losing revenue that covers overhead. They could make a claim against a customer over that, but don’t know if they’d win.

I would spend more time making sure you aren’t distracted during your ground ops (from starting to takeoff, or landing to shutdown). It ain’t over till it’s over is the key to a damage free flight.
 
TrueCourse said:
I wouldn’t lost sleep over whether your policy will get renewed or not and I wouldn’t try to jump the gun and get a different policy right after a claim is paid.

Doesn’t surprise me the flight school tries to get the most out of a claim, but recovery of profit makes more sense. Trying to recover operating expenses on a plane that isn’t flying? Their hourly rate may include an allowance for overall business profit, not just what the airplane nets on its own. Not sure, but they could have tried a claim that recovered the entire business profit built into the rental rate if they were savvy at their accounting. If the insurance company wanted a detailed breakdown that only included gas, oil, maintenance estimate, airplane insurance expense, etc. then the school would be losing revenue that covers overhead. They could make a claim against a customer over that, but don’t know if they’d win.

I would spend more time making sure you aren’t distracted during your ground ops (from starting to takeoff, or landing to shutdown). It ain’t over till it’s over is the key to a damage free flight.
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Like I said, I'm just reiterating what the insurance adjuster told me. I really don't know how that all works.

Talked to the insurance broker today and he still says they may renew me, and that since the policy isn't up for renewal until next month, they probably haven't even looked at it yet .

So for now, the plan is to go back and start flying again on Friday and hope for the best. If I get to keep going I'll be grateful and if I don't, at least I got to fly a little bit more.
 
I'm surprised that your policy covered it. Usually the school has insurance for their planes. I guess they had a high deductible (more than $2k) which is why they used your renter insurance. But you got the renter insurance to cover you in case of a bump like this. So not a bad idea to let them do what you were paying them to do - cover you for an accident loss.
 
I thought renter's insurance was one of those "zero or low underwriting" high-margin products, where it's priced such that you fog a mirror, you get coverage? even with a past claim? Kind of like those $250K life insurance ads you see out there.

Also sounds like the school was lazy and just said "we would've flown 10 hours in the downtime, so 10 x <rental rate> is our loss of use claim" which of course got the horse's laugh out of the insurer.

I'm pretty confident someone will write your policy. If not, your moves are to switch to a school with no renters insurance requirement, or just buy a plane and get your own hull insurance :) There are worse things.
 
WDD said:
I'm surprised that your policy covered it. Usually the school has insurance for their planes. I guess they had a high deductible (more than $2k) which is why they used your renter insurance. But you got the renter insurance to cover you in case of a bump like this. So not a bad idea to let them do what you were paying them to do - cover you for an accident loss.
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The renter's agreement says that after solo, students are responsible for all damage resulting from negligence or misuse. So they won't even use their insurance unless it was something out of my control.
 
WDD said:
I'm surprised that your policy covered it. Usually the school has insurance for their planes. I guess they had a high deductible (more than $2k) which is why they used your renter insurance. But you got the renter insurance to cover you in case of a bump like this. So not a bad idea to let them do what you were paying them to do - cover you for an accident loss.
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If it were car insurance I wouldn't even be questioning it, but I keep reading that no aviation insurance will cover you within 3-5 years of a claim. So if my insurance company decides to drop me, I won't be able to find anything else and I will have to quit my training. I'm worried they will look at a claim within the first year of the policy as too much risk and decline to keep covering me. My CFI uses the same company and said he can't imagine they'll drop me for such a small claim, but I have a lot riding on this. That's why I feel stupid for using the insurance.
 
schmookeeg said:
I thought renter's insurance was one of those "zero or low underwriting" high-margin products, where it's priced such that you fog a mirror, you get coverage? even with a past claim? Kind of like those $250K life insurance ads you see out there.

Also sounds like the school was lazy and just said "we would've flown 10 hours in the downtime, so 10 x <rental rate> is our loss of use claim" which of course got the horse's laugh out of the insurer.

I'm pretty confident someone will write your policy. If not, your moves are to switch to a school with no renters insurance requirement, or just buy a plane and get your own hull insurance :) There are worse things.
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I unfortunately can't change schools. I'm a sport student (for now) and this is the only school with an LSA in my state. I've also heard that it'll be impossible to get coverage on my own plane after this for at least 3 years.
 
StudentPilot0525 said:
Thank you. Several people have told me I was dumb for not just paying out of pocket, but I didn't know what the total was going to be until insurance was already done with it. Plus the original bill was apparently $1k higher and reduced after the insurance found issues with the charges. I truly hope I'll be able to renew, I just have no experience with this sort of thing and I've read so many stories about people being dropped/non-renewed for filing claims.
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Students by definition are high risk thus the high rates.

I'm no expert but having had a lot of interactions with insurance companies but my guess is if there are no other issues you should be fine although your rates may increase.
 
RyanShort1 said:
I can, of course, see the insurance company disputing fuel and oil, but then, too, a tight operation might have agreements to purchase X amount of fuel per week with the FBO in order to get a discount, and an airplane down for even a week might affect things. Margins in a significant percentage of flight schools are razor thin.
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Have you personally seen such an agreement????

Maybe so much per year. But per WEEK? A hurricane would blow that away.
 
Pinecone said:
Have you personally seen such an agreement????

Maybe so much per year. But per WEEK? A hurricane would blow that away.
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I'm pretty sure I saw an agreement about X amount of gallons per week or month meant a significant discount, which was negated if the volume was too low.
 
O2 Birddog said:
Students by definition are high risk thus the high rates.

I'm no expert but having had a lot of interactions with insurance companies but my guess is if there are no other issues you should be fine although your rates may increase.
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Actually students aren’t high risk at properly managed flight schools.
 
You don't need insurance to get it keep a pilot certificate. Don't sweat it; it is what it is.
 
Clip4 said:
Actually students aren’t high risk at properly managed flight schools.
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The lower your time is the higher the risk you are. That's why a pilot with thousands of hours will be cheaper to insure than one with fifty.

It's all based on how the numbers crunch out.
 
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Clip4 said:
True, but students don’t fly in IMC, night, or ultimately their own WX go no go decisions.

https://www.boldmethod.com/blog/lis...ight-causes-25-percent-of-fatal-ga-accidents/
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The bulk of accidents, over sixty percent occur in VFR daytime conditions with 68% of them on landing or approach and during the first year of flight.

BTW:

To help prevent accidents, the FAA has changed pilot training programs over the years. For one thing, all private pilot students get a brief introduction to operating the aircraft in IMC. The hope is that this limited amount of training and exposure will enable them to make a 180-degree turn out of dangerous IMC to return safely to VFR flight.
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https://aerocorner.com/blog/imc-in-aviation/

Is this no longer the case?
 
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Find another broker or call around yourself. Insurance companies are actually in the business of paying claims…no claims no way to justify rates…claims are part of the model…maybe your broker is worried about his loss ratio. My recent renewal I had multiple offers from different companies and have a total loss with multiple fatalities and lawsuits, two years ago on my disclosure…I am paying a little more but thats part of the deal…obviously I was not operating the aircraft, but I was the owner.
 
Actually, with insurance, if there are no claims, and never have been a claim or court judgement, they won't write insurance, as there is not way to predict the costs of paying a claim.

I ran into this for professional E&O insurance.
 
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