Renter's Insurance / Insight / Opinion / Rants / Recomendations?

[bradg33]

Be aware that this is a policy to protect the club, but probably does not adequately protect you. Do you think that if you injure someone that they will only sue for $100,000?

They'll probably sue for more than $100k, but depending on the circumstances, they'll likely settle for insurance limits.

 

[Skyrys62]

The 'loss of use' is scary to me as well.
That's where an additional policy may pay off.
Where I am taking lessons and soon to be renting, they tell me $500 deductible, that's it.
Earlier, they said $10,000 deductible. I refused to solo fly the plane after my first solo.
Don't know if that had any bearing on the change or not, but even the CFI was astounded. He was responsible for the 10k deductible if a student crashes while he is in the plane.
I'll ask to see the paperwork before I fly solo for sure.

 

[bradg33]

The 'loss of use' is scary to me as well.
That's where an additional policy may pay off.
Where I am taking lessons and soon to be renting, they tell me $500 deductible, that's it.
Earlier, they said $10,000 deductible. I refused to solo fly the plane after my first solo.
Don't know if that had any bearing on the change or not, but even the CFI was astounded. He was responsible for the 10k deductible if a student crashes while he is in the plane.
I'll ask to see the paperwork before I fly solo for sure.

Remember that virtually nobody working a flight school desk actually understands the insurance policy. It would be extremely rare for a flight school policy to actually provide COVERAGE to a student/renter. Most only provide coverage to the flight school itself (or leaseback owner). The student/renter is an approved pilot, but is entititled to ZERO coverage under the policy. If you get in an accident, and the plane is damaged, the insurance company can write the school a check and then sue you to recover (subrogation). If you get in an accident and injure someone else or damage a third-party's property, those people can sue you for their injuries and you will have no coverage under the school's policy. This is where renter's insurance becomes important.

 

[MassPilot]

Be aware that this is a policy to protect the club, but probably does not adequately protect you. Do you think that if you injure someone that they will only sue for $100,000?

Honestly thanks to my ridiculously high student loan payments I do not have much in terms of assets. My guess is they would probably settle for the $100,000 settlement from insurance rather than fight for more which they'll have a very hard time collecting. However I did come to the conclusion earlier in this thread that it's still probably a good idea for me to get renter's insurance.

 

[Clip4]

Be aware that this is a policy to protect the club, but probably does not adequately protect you. Do you think that if you injure someone that they will only sue for $100,000?

The policy does not protect the club much either. The $100K coverage per person covers both the club and the members. If a member injures someone, the club may be sued too - along with everybody else that can be sued. The deep pockets the attorneys are after isn't the club or the members. They will take what they can get from the club's insurance and move to other plaintiffs, who likely have more coverage.

A fairly recent owner fatal accident I am aware of kinda spills the beans. A mechanic with no insurance performs an annual inspection and does not complete a manufacturer recommended inspection of the exhaust. The owner a few weeks later flies the plane, gets smoke in the cockpit, lands, and does a cursory inspection of the plane finding nothing. The plane then loses power on takeoff crashes and burns killing two.

The uninsured mechanic, who bore the blunt of the blame and was disciplined by the FAA for this event, had a lot of attorney fees, but paid zero. Everyone with insurance paid a lot. Go figure.

 

[Skyrys62]

If you get in an accident, and the plane is damaged, the insurance company can write the school a check and then sue you to recover (subrogation). If you get in an accident and injure someone else or damage a third-party's property, those people can sue you for their injuries and you will have no coverage under the school's policy. This is where renter's insurance becomes important.

This is one of those things that irritate me. And when I hear reasons why GA could be dying out, this one needs to be included.
I'm willing to wager that the cost of insurance is billed to me as a renter/student, but then no real protection provided. So I have to get renters insurance, and in effect am paying twice.

 

[paflyer]

Holy cow, if you're going to fly, get the insurances. It's maybe $300/yr. A dollar a day.

 

[JimNtexas]

I just reviewed our club's policy, which was obtain from Starr insurance. We have the $100K/person liability limit, which sucks big time. That's why I carry AOPA renters liability with it's $1million for non-involved people limit.

I'm also a little concerned about this issue:

This Policy does not cover any claim, damage, injury, loss, cost, expense or liability (whether in contract, tort,
negligence, product liability, misrepresentation, fraud or otherwise) of any nature whatsoever arising from or
occasioned by or in consequence of (whether directly or indirectly and whether wholly or partly):
a) the failure or inability of any computer hardware, software, integrated circuit, chip, computer component or
other information technology equipment or system (whether in the possession of the Insured or of any third
party) accurately or completely to process, recognize, exchange or transfer year, date or time data or
information in connection with:
- the change of year from 1999 to 2000; and/or
- the change of date from 21 August 1999 to 22 August 1999; and/or
- any other change of year, date or time;
whether on or before or after such change of year, date or time;​

 

[JGoodish]

In my state, by public policy, an insurer is prohibited from subrogating against an insured. I believe this is typical for most states.

I can't speak to specific state laws, because most of them appear to vary quite a bit with regard to insurance. In any case, the law likely only prohibits subrogation against the policyholder(s) and not others. For example, open pilot clauses typically don't protect those pilots, only the policyholders/named insured.

Insurance companies (at least in my state) may subrogate to policyholder(s) if there is compensation provided to the policyholder(s) outside of the policy; for example, if the policyholder were to recover a judgment for injuries which were covered under the policy. I've also seen cases where insurance companies have cut and run, and required litigation from the policyholder to force them to honor the terms of the policy.

I've rented from FBOs in the past, and their policies protected them, not me. Depending on how they're established and operated, club policies may be the same way. Arguing that someone is or should be covered--or protected from subrogation--without reading the full policy terms is not prudent, in my opinion.


JKG


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[paflyer]

I just reviewed our club's policy, which was obtain from Starr insurance. We have the $100K/person liability limit, which sucks big time. That's why I carry AOPA renters liability with it's $1million for non-involved people limit.

I'm also a little concerned about this issue:

This Policy does not cover any claim, damage, injury, loss, cost, expense or liability (whether in contract, tort,
negligence, product liability, misrepresentation, fraud or otherwise) of any nature whatsoever arising from or
occasioned by or in consequence of (whether directly or indirectly and whether wholly or partly):
a) the failure or inability of any computer hardware, software, integrated circuit, chip, computer component or
other information technology equipment or system (whether in the possession of the Insured or of any third
party) accurately or completely to process, recognize, exchange or transfer year, date or time data or
information in connection with:
- the change of year from 1999 to 2000; and/or
- the change of date from 21 August 1999 to 22 August 1999; and/or
- any other change of year, date or time;
whether on or before or after such change of year, date or time;​

 

[ZeroPapaGolf]

Holy cow, if you're going to fly, get the insurances. It's maybe $300/yr. A dollar a day.

Maybe for liability only. Actually covering the aircraft as well is going to be more like 1% of coverage limit. Using Avemco as an example, 100,000/1,000,000 plus $100k for the aircraft is around $1100 per year.

 

[paflyer]

Maybe for liability only. Actually covering the aircraft as well is going to be more like 1% of coverage limit. Using Avemco as an example, 100,000/1,000,000 plus $100k for the aircraft is around $1100 per year.

As a renter, you're not covering the hull directly, you're covering your liability exposure (which includes damage to the hull).

 

[PPC1052]

I can't speak to specific state laws, because most of them appear to vary quite a bit with regard to insurance. In any case, the law likely only prohibits subrogation against the policyholder(s) and not others. For example, open pilot clauses typically don't protect those pilots, only the policyholders/named insured.

Well, I am not sure what the law is in your state (nor which state you are in, for that matter.) So I cannot argue whether a carrier is prohibited against subrogating against those that are insureds, but not named insureds, in your state. I will just say that in my state, carriers cannot subrogate against any insured, regardless of whether they are a named insured or an additional insured.

I've rented from FBOs in the past, and their policies protected them, not me.

Very possibly true.

Arguing that someone is or should be covered--or protected from subrogation--without reading the full policy terms is not prudent, in my opinion.

100% agree. Hopefully, you are not attributing such an argument to me because I have not so argued.

 

[ZeroPapaGolf]

As a renter, you're not covering the hull directly, you're covering your liability exposure (which includes damage to the hull).

So if you have an accident that results in the total destruction of the $100k 182 you're flying, how much hull coverage do you need? We've established that the club's policy will subrogate against you for their loss. Unless I'm missing something here, you need enough to potentially cover the whole value.

 

[bradg33]

So if you have an accident that results in the total destruction of the $100k 182 you're flying, how much hull coverage do you need? We've established that the club's policy will subrogate against you for their loss. Unless I'm missing something here, you need enough to potentially cover the whole value.

The Club's insurance may subrogate against you. As I understand it, subrogation in aviation insurance isn't particularly common absent gross negligence or worse. But you're otherwise correct; you need a renter's policy that'll cover $100k in hull damage to cover that 182.

 

[Skyrys62]

So yes, paying twice.

 

[Clip4]

So if you have an accident that results in the total destruction of the $100k 182 you're flying, how much hull coverage do you need? We've established that the club's policy will subrogate against you for their loss. Unless I'm missing something here, you need enough to potentially cover the whole value.

We have not established that a club's policy will subrogate. Do you have any real examples of this happening where the member was an insured and the circumstances?

 

[ZeroPapaGolf]

We have not established that a club's policy will subrogate. Do you have any real examples of this happening where the member was an insured and the circumstances?

If it's an option to them, you have to assume they will take it. Otherwise you're hoping that a corporation will accept a loss out of the goodness of their heart. Maybe they will, maybe they won't, but that's a risk to be taken seriously unless you are uncollectably destitute.

 

[Clip4]

If it's an option to them, you have to assume they will take it. Otherwise you're hoping that a corporation will accept a loss out of the goodness of their heart. Maybe they will, maybe they won't, but that's a risk to be taken seriously unless you are uncollectably destitute.

Then you should quit paying your homeowners and auto insurance too because they will never pay.

Juries exist for a reason and they are not going to side with an insurance company trying to screw its policy holders or escape their contractual obligations. The only way an insurance company can suborgate is to go to court.

 

[ZeroPapaGolf]

Then you should quit paying your homeowners and auto insurance too because they will never pay.

Juries exist for a reason and they are not going to side with an insurance company trying to screw its policy holders.

Last I checked, I am the policyholder on my own policies. This discussion is about aircraft where you are NOT named on the insurance policy. Obviously they're not going to subrogate against the policyholder, that's silly.

 

[Clip4]

Last I checked, I am the policyholder on my own policies. This discussion is about aircraft where you are NOT named on the insurance policy. Obviously they're not going to subrogate against the policyholder, that's silly.

You wrote this "We've established that the club's policy will subrogate against you for their loss."

So you think a flying club, who has been paying premiums on behalf of its members, is going to allow an insurance company to suborgate against a member and not take the insurance company to court for breach of contract?

 

[ZeroPapaGolf]

So you think a flying club, who has been paying premiums on behalf of its members, is going to allow an insurance company to suborgate against a member and not take the insurance company to court for breach of contract?

I would suggest you start on page 1 of this thread as we've already covered these points thoroughly. If you have a differing viewpoint, the forum and this thread would likely benefit from you explaining your reasoning with statements rather than questions.

 

[Datadriver]

Call a broker. They represent multiple companies. I have found better deals using brokers than what aopa was able to put together.

+1. A good broker will put out on the wire your requirements and then receive multiple quotes. He then will tell you the quotes from the different sources.

 

[Clip4]

I would suggest you start on page 1 of this thread as we've already covered these points thoroughly. If you have a differing viewpoint, the forum and this thread would likely benefit from you explaining your reasoning with statements rather than questions.

I just addressing a baseless statement you made. I will tell you that aircraft insurance companies have treated claims in the 3 clubs I have been in over the last 30 + years very well. The reason is simple, when you **** off 100+ pilots in a club, word gets around.

 

[denverpilot]

So you think a flying club, who has been paying premiums on behalf of its members, is going to allow an insurance company to suborgate against a member and not take the insurance company to court for breach of contract?

Absolutely. They may be legally barred from becoming involved in order to get paid. And they may find the club uninsurable the second they sue one of only two or three aviation underwriters.

Someone said that claims are usually handled well, and in all instances I've seen, including some I thought were flat out insurance fraud, the insurers paid out just fine. But the statement that "work gets around" between the pilots also holds true with the underwriters. If a club or organization won't play ball -- they'll likely find themselves uninsurable.

It's even worse in the glider world. There's literally one underwriter. One. Singular. No competition. In fact, if your organization isn't a member of SSA you won't get even that coverage.

It's a small *insurer* pool. **** them off by being a huge PITA as a club or organization, the organization will probably find they have no coverage, quick.

 

[Clip4]

That is total non-sense. When an insurance policy includes coverage for others, the named insured has legal standing to bring forward a case or join an existing one if the insurer is not fulfilling the terms of his policy. And punitive damages apply and juries are rather quick to award them when a insurance company appears to be trying to screw people.

I will agree that the pool for many flying clubs is small, but that is because market for club insurance is small. Club insurance is also rather profitable.

I know of one flying club that found themselves paying a very high rate after one of their members geared up a plane and the same guy totaled another within 90 days in a landing accident. The insurer did not subrogate against the member. Their carrier dropped them at renewal, but they still found insurance. And their previous insurer took them back in 24 months.

Gliders are a higher risk activity, a super small market and probably only does have one insurer. But even then, if the glider club is not going to enforce the policy it is paying for, there is no reason to buy it.

The last issue is what does a club member do when he is paying for insurance as part of his dues, totals a $100K 182, and an insurance company subrogates? The answer is simple, he hires and attorney and sues both the insurer and the club for not meeting the terms of their agreements. The club doesn't get to walk away and say sorry we aren't going to enforce our policy because we might not be able to get insurance.

 

[denverpilot]

The last issue is what does a club member do when he is paying for insurance as part of his dues, totals a $100K 182, and an insurance company subrogates? The answer is simple, he hires and attorney and sues both the insurer and the club for not meeting the terms of their agreements. The club doesn't get to walk away and say sorry we aren't going to enforce our policy because we might not be able to get insurance.

Might win, might not.

Probably won't be allowed to rent from any local club who heard about it ever again, too.

There's legal, and then there's a real world where clubs simply don't have the cash to deal with lawsuits and don't have everyone properly covered.

In smaller places where there's only one club or FBO for a good distance, you may be done flying if you don't buy an aircraft, after suing the club.

Not saying it's right, but it's reality.

It'd be a very rare renter who'd have the kind of coin they'd need to do anything like you suggest, above. Never seen it happen. Usually before it gets to subrogation, all the parties sit down, with or without lawyers, and negotiate a settlement anyway.

Very few who could retain a lawyer long enough to go through the above, are renting anyway. They bought an airplane long ago.

 

[Skyrys62]

This is probably a stupid question, but are there insurance policies that include (or a rider policy) that covers engines?
One of the biggest fears of buying for a lot of folks seem to be the large unexpected cost of an engine rebuild.

 

[denverpilot]

This is probably a stupid question, but are there insurance policies that include (or a rider policy) that covers engines?
One of the biggest fears of buying for a lot of folks seem to be the large unexpected cost of an engine rebuild.

Haven't seen one, but pricing would be awful. They'd just figure out the price of a new engine in a crate and charge you more per month than that would cost prior to TBO. Wouldn't be anything better than an engine slush fund per hour. Plus, they'd have to assume you'd fly off the hours really really fast with no worries about engine cost.

 

[Skyrys62]

yeah.... kind of thinking there might be a way to pro-rate it based on hours or something.
but, it would probably get manipulated and scammed by one side or the other so bad it would be a disaster. Like so many other things put in place to help people.

damn that sounds negative. is it beddy-bye time? lol

 

[starglider]

Remember that virtually nobody working a flight school desk actually understands the insurance policy. It would be extremely rare for a flight school policy to actually provide COVERAGE to a student/renter. Most only provide coverage to the flight school itself (or leaseback owner). The student/renter is an approved pilot, but is entititled to ZERO coverage under the policy. If you get in an accident, and the plane is damaged, the insurance company can write the school a check and then sue you to recover (subrogation). If you get in an accident and injure someone else or damage a third-party's property, those people can sue you for their injuries and you will have no coverage under the school's policy. This is where renter's insurance becomes important.

100% correct and also, IMHO, 100% BS that flight schools do this. I get it for renters/advanced students who presumably know the ropes and whose experience and skill the school may not know. But it my mind, it's just abhorrent that flight schools allow their insurance companies to subrogate against their own solo students (and instructors). If it only costs me $300/year, that means the school could probably have me covered for half that given their volume and negotiating power. $10k for a PPL, and they'll hang the student out to dry if he botches up a landing? I wonder how many solo students out there are completely uncovered, 100% liable for the hull value of the aircraft they're flying.

That said, I've never seen a flight school NOT behave this way. Along with charging on Hobbs and a million other little things, it's just the way that they all seem to do "business."

 

[denverpilot]

That said, I've never seen a flight school NOT behave this way. Along with charging on Hobbs and a million other little things, it's just the way that they all seem to do "business."

It's because the second anyone does anything "right" in the rental biz, the guy up the hangar row undercuts them by $5/hr on their rental rates and all the pilots go over there.

Similar issue in the airline ticket biz.

Race to the bottom.

Everyone is getting what they'll pay for. If a place did this "right" they'd only cater to the "higher end" renters.

Aircraft rental is extremely price sensitive, but pilots seem to know when they've gotten a little too low and which rental place on the field is down there. And they sense that place probably isn't doing all the maintenance they could...

And then the place has a wreck, goes under as that business name, and the principals behind it all pop the thing back up with a new business name on the field, sometimes moving office space, sometimes not, just buying new signs, while the other name disappears into bankruptcy.

Honestly I see at least one 182 on the field renting out for significantly less than we can operate ours for and I think to myself that we don't carry commercial insurance and that aircraft does, something is getting missed. A couple of others are renting for only a few bucks more an hour than our long term numbers have averaged to be, so there's no way they're covering all the expenses on those, either.

As a renter, one can only hope the owner DOES have decent money and WILL maintain things properly on that kind of rental on a leaseback, because you can tell they aren't covering costs with the leaseback alone. You hope they're just defraying the costs a bit with the leaseback and wanted the aircraft to fly a bit more.

 

[Clip4]

Might win, might not.

Probably won't be allowed to rent from any local club who heard about it ever again, too.

There's legal, and then there's a real world where clubs simply don't have the cash to deal with lawsuits and don't have everyone properly covered.

In smaller places where there's only one club or FBO for a good distance, you may be done flying if you don't buy an aircraft, after suing the club.

Not saying it's right, but it's reality.

It'd be a very rare renter who'd have the kind of coin they'd need to do anything like you suggest, above. Never seen it happen. Usually before it gets to subrogation, all the parties sit down, with or without lawyers, and negotiate a settlement anyway.

Very few who could retain a lawyer long enough to go through the above, are renting anyway. They bought an airplane long ago.

Honestly, have you ever been involved in an aviation insurance claim involving a club? As an officer of various clubs over the last 37 years, I have and the insurers are not try to outright screw people. You are discussing a situation that does not exist in a flying club where the members are named as insureds. The reason is simple, insurance companies are legally not allowed by law to sub against named insurers.