Flying club insurance

Spring is here, and now is the time to set up that flying club and start flying more. Get your friends together, decide on an airplane, and get the ball rolling. AOPA has everything you need to get started, including help with club organization, aircraft financing, and insurance.

Let’s take a quick look at the basics of flying club insurance. Most clubs have from three to 25 active pilots per airplane, the aircraft are generally equity owned, and they set up under a holding company. LLCs are the most common legal entities and, in addition to the legal and tax advantages, registering an aircraft under an LLC also means the club will not have to re-register every time the club membership changes. Diving the equity and the status of the members as active, inactive, social, or family members will vary from club to club. (The new AOPA Insurance Club Policy does not charge for inactive members, and encourages social and family memberships.) What is important is that each member be an “insured” under the policy, that they be provided cross-liability protection, and that there are no family member liability coverage limitations or exclusions. The next question is how much liability insurance the club should carry. I recommend that the club have sufficient insurance to meet the requirements of that club member that needs the greatest protection. Clubs often find that such coverage limits are not easily available, especially when the club includes lower time pilots. However, working with a large U.S. aviation insurance company, AOPA has recently developed an innovative means to increase the protection of those individual club members needing higher liability coverage limits. Also the new club policy includes very broad territorial limits (United States, Canada, Mexico, Bahamas, Central America, and Islands of the West Indies); coverage is now available for some multi-engine aircraft, and for the first time, “for profit” clubs can obtain this same broad protection.

Flying club insurance rates are influenced by many factors, but the most important include the make and model of aircraft, the insurance coverage limits needed (including aircraft value and liability limits), the number of members per aircraft, the ratings, experience and claim-experience of members, aircraft location (hangared or tied down), and what additional expanded coverage is needed (clubhouse or hangar protection, aviation event and contest coverage, extra equipment and tools, etc.). Clubs operating retractable-gear or high-performance aircraft, or needing significant expanded coverage (such as insurance protection for a club-owned private airfield), should expect to pay higher insurance premiums.

The most commonly requested club quote is for three to four pilots, with a Cessna 152, Cessna 172, or Piper PA-28. For example, consider a Cessna 172, $50,000 hull value, hangared, three pilots with the lowest time pilot a 100 hour private pilot. Based on liability limits of $1,000,000 each occurrence / $100,000 per passenger and full ground and flight hull insurance, this new club would pay about $818 the first year or about $23 per member per month. If the club adds a fourth partner, the rate drops to $21 a month.

Remember, your insurance broker is your partner. He will try to answer any questions you might have, and needs you to respond completely and honestly to any questions he might have for you. More information is available online, or by calling AOPA Insurance Services at 800/622-AOPA (2672).