What kind of owner's insurance do I need?

Amsirahc

Amsirahc

Filing Flight Plan
Joined
Oct 2, 2019
Messages
26
Location
Gallia County, OH
Display Name
Display name:
Amsirahc
Hello all, I just bought my first airplane! WOO! It's a 1967 Piper Cherokee in fairly good condition that's been used as a rental/trainer for a short while, and I am wanting to do a couple things with it:
  1. Continue to rent it out (I have permission from the airport). The goal being to rent it out at-cost since we operate in an economically depressed area, but enough to cover the insurance/fuel/maintenance as much as possible.
  2. Allow a CFI to continue using it for training, and eventually use it as a trainer myself when I become a CFI (probably around next summer).
I checked with AOPA and they said to expect commercial premiums between $5k-$7k, but I want a second opinion (no offense). Seeing as I'm not going to be a CFI for a while, do I need to cover the plane for training, or would the CFI's own insurance cover them as a borrower?

Since there are way too many insurance options out there, what are my best options for the lowest operating cost? Any recommended insurance companies I should look into?
 
"At Cost" is going to be pretty close (if not over) the market rate for rentals. Nobody is making killer profits on these things.

The cost of insurance for renting out my plane was three times what it was for me and my wife as low time pilots. The price scales pretty linearly with your hull value. $5K sounds like a bargain actually.

If you don't rent it out, you can get insured a lot cheaper for using it personally and when you are instructing.
 
flyingron said:
"At Cost" is going to be pretty close (if not over) the market rate for rentals. Nobody is making killer profits on these things.

The cost of insurance for renting out my plane was three times what it was for me and my wife as low time pilots. The price scales pretty linearly with your hull value. $5K sounds like a bargain actually.

If you don't rent it out, you can get insured a lot cheaper for using it personally and when you are instructing.
Click to expand...

Yeah, I realize it's way cheaper to just use it personally, but the mission is to allow others to continue using it while not going completely broke in the process. Just wondering if there are better ways to go about it. I appreciate your input though.
 
If you want to not go broke, forget it as a way to mitigate your personal costs. If you want it to be successful, you are going to have to operate it as a business. For training aircraft like this, the key is availability. Nobody is going to be a regular renter of a plane that is either booked out for the owner or down for maintenance. You have to get in line behind everybody else for plane use and keep on top of the maintenance so the plane is always ready to rent.
 
flyingron said:
If you want to not go broke, forget it as a way to mitigate your personal costs. If you want it to be successful, you are going to have to operate it as a business. For training aircraft like this, the key is availability. Nobody is going to be a regular renter of a plane that is either booked out for the owner or down for maintenance. You have to get in line behind everybody else for plane use and keep on top of the maintenance so the plane is always ready to rent.
Click to expand...

Oh, I have no issues with scheduling. There's only a handful of pilots that rent around our area anyway, so unless there's a huge boom between now and summer then I will be good in booking it for what I need as well. I don't intend to use it as an overnight cross-country plane. Just going to be finishing out training and helping others finish theirs since it will be the only plane at the airport available for rental for a while. It may get 100ish hours per year of usage if it's lucky right now, but once I become a CFI I intend to change that and start advertising. There's another CFI that can only be there every couple weekends or so now that will be using it to train the existing students, so that's why I wondered about the insurance. If they have CFI insurance (if that's a thing), do I need to cover the plane for instruction use or can I just get a commercial rental policy and bump it later when I need to cover me as a CFI? Might it just be easier to suck up the $5k-$7k now and not have to worry about that later?
 
Form a flying club around the airplane?
 
If the OP wants a personal plane to share and instruct in, I like the idea of finding 3 partners, forming a flying club and having the club own and operate the plane. You could become club instructor when you finish your CFI You could build a ton of hours and create the ability for a few others to be part of the plane. If you are AOPA member, they can help you, I believe.
 
flyingron said:
That really doesn't change anything if you have more than a small fixed number of members.
Click to expand...

True, but if it really is only a small number of renters, they could save a lot on insurance if everyone is a named-insured on a more limited personal/business use policy. You would need to ask the insurance company how often the named-insured could be switched out during a year though, to keep it from having to be on a full commercial-rental policy.
 
Jeff Oslick said:
True, but if it really is only a small number of renters, they could save a lot on insurance if everyone is a named-insured on a more limited personal/business use policy. You would need to ask the insurance company how often the named-insured could be switched out during a year though, to keep it from having to be on a full commercial-rental policy.
Click to expand...

It used to be for 5 or less partners this was the best way to go. I think 5 was the maximum number of partners the insurance would allow without going to a club insurance policy. We had a local club that operated that way. It was just a 5 way ownership in a C-150. I trained a few pilots in the plane. They would buy a 1/5th share from someone that wanted out, do their training in the plane, get their pilot certificate. Fly it for a while then sell when they wanted to move up to their own plane or renting bigger airplanes. It worked well for a number of years until they put a new engine in it and all was good, they had set aside an engine reserve for it. But then the new engine had a major issue that required another major tear down of the engine. The partners didn’t want to pony up the money to tear down the engine again, so one of the partners bought them all out, replaced the engine and finished most of his training in the plane before selling it and buying a Citabria.

Have to be careful with trying to use CFI or renters insurance instead of ponying up for Full fledged commercial Hull coverage. The problem with Non-owned CFI or renters insurance is it protects the CFI or the Renter. CFI insurance typically won’t cover a hull loss if you are instructing in your own plane. The other issue is these insurances only cover the CFI or renter, NOT the Owner. So if the plane has an engine failure and the CFI/renter does a beautiful job of setting the plane down in the best possible location but still totals the airplane. Or a deer runs out in front of the plane and collides with it. The CFI/Renters insurance is likely going to claim the damage is not the CFI or renters fault and might more likely spend money defending the CFI/Renter if you try to sue them, rather than just paying for the damage/repair. Or course the Owner should have Liability coverage for the school bus of kids that they hit during the emergency landing. But would want to read the liability policy very carefully to make sure it would pay when renting the plane out or providing instruction in it.



Brian
CFIIG/ASEL
 
brcase said:
Have to be careful with trying to use CFI or renters insurance instead of ponying up for Full fledged commercial Hull coverage. The problem with Non-owned CFI or renters insurance is it protects the CFI or the Renter. CFI insurance typically won’t cover a hull loss if you are instructing in your own plane. The other issue is these insurances only cover the CFI or renter, NOT the Owner. So if the plane has an engine failure and the CFI/renter does a beautiful job of setting the plane down in the best possible location but still totals the airplane. Or a deer runs out in front of the plane and collides with it. The CFI/Renters insurance is likely going to claim the damage is not the CFI or renters fault and might more likely spend money defending the CFI/Renter if you try to sue them, rather than just paying for the damage/repair.
Click to expand...
A great point.

In an owner policy, hull is like collision in car insurance. No fault protection for damage to the aircraft. In a non-owner (commonly referred to as "renter") policy, the coverage is property damage insurance for damage to the aircraft legally caused by the non-owner.
 
This discussion made me look up our policy.

- C-172M w/ 94K hull and 100k/1M
- +5 partners (PPL thru ATP held by members)
- Non-commercial policy
- Student pilot exclusion

$3600

I’d hate to see the premium if we struck the student pilot exclusion.
 
You must log in or register to reply here.
Back
Top