Tips for buying an aircraft and insurance
Whether you are buying your first aircraft or your tenth, you are probably excited and a bit nervous. It’s best to follow a checklist, and AOPA has an excellent free resource.
One of your first questions when buying an aircraft should be, “Do I qualify for insurance in that airplane?”
Most of the time, but not always, the answer will be yes. Although a new private pilot might be able to obtain insurance on a Beech 35 or Cessna 210, that insurance will come at a steep price and be subject to coverage limitations and quite a few training requirements. All insurance companies prefer, and many require, that the pilot be instrument rated before they will even “indicate” a rate for a new or low-time pilot on complex aircraft. That same pilot might find an “under 200 horsepower fixed-gear aircraft” much more palatable as a first airplane, and decide to hold off on the retractable-gear airplane for a year or so. Your insurance broker is a great resource for such matters, and can help guide you toward a cost-effective decision.
If you are buying the aircraft with a partner, or perhaps forming a club, the insurance discussion and quotations will be more complex. Your rates will be determined by the lesser experienced partners, and there will likely be additional charges for partnerships and clubs with more than three members. However, the insurance markets have proven to be very accommodating over the last few years, and it is likely you will find good coverage that meets the needs of the group.
The liability risk to you as the aircraft buyer is quite low during the demo ride; however, there is significant confusion in the aircraft sales brokerage community regarding insurance, with frequent policy lapses and violations. The current aircraft owner maintains pleasure and business use coverage on the aircraft while it is for sale, and for the sales broker carries nonowner insurance and worker’s compensation to protect himself and his pilots.
When you decide to buy that airplane, call your insurance broker right away. The broker will discuss your insurance options, including training requirements, have coverage bound, and send you a confirmation. Many brokers can now provide a digital copy of the binder, the application, and the actual policy for ease of storage and retrieval. Keep a copy of the sales agreement and the bill of sale for your records; ask your broker if your CFI and/or mechanic meet the pilot requirements of the policy; and be absolutely certain to comply with all the requirements of the insurance binder and policy.
Visit www.aopainsurance.org or call 800/622-2672 for information on how AOPA can get you the best deal for your insurance needs.