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Aircraft insurance limits: How much should I carry?
Aircraft insurance limits: How much should I carry?
Safe pilots know their limits—limits on airspeeds, weight and balance, winds and weather, even personal limits. Knowing your insurance limits and what they mean is just as important.
Buy as much coverage as you can reasonably afford. Your liability coverage protects you from bodily injury and property damage claims. In today’s litigious society, legal award amounts have skyrocketed. That’s why buying the highest limit you can is important.
Know what liability “sublimits” are. Due to budget or underwriting requirements, the majority of aircraft owners fly with some type of bodily injury liability sublimit. Simply put, a sublimit reduces coverage to an amount less than the “each occurrence” limit. The sublimit amount is applied on either a “per person” or a “per passenger” basis. A “per person” sublimit reduces your coverage for bodily injury to any person in the aircraft or on the ground. “Per passenger” sublimits offer more coverage by limiting the restriction to passengers only. Finally, there are still a few aircraft policies that contain old-fashioned “family” sublimits that reduce your coverage for injuries to family members. Ask your insurance broker or company if you have these and how to get rid of them.
Know the current value of your aircraft. In contrast to most auto policies that pay total losses based on the vehicle’s “market value,” aircraft insurance is written on an “agreed/stated value” basis. Also known as your “insured value,” this is the amount you will receive in the event of a total loss, less any deductible. But what value is right for your airplane? Too low and you run the risk of being underinsured. Too high and you pay higher premiums and can run into “cost to repair” problems.
So check your aircraft’s current market value carefully when setting your insured value at each year’s renewal, and since values in the used aircraft market are constantly changing, look for a policy that offers InflationGuard value protection, which automatically increases your insured value in response to increases in its market value. This can help keep you from being under insured.
Select an experienced aircraft brokerage you know and trust. At the AOPA Insurance Agency, personal aircraft insurance is all we do. We’re the world’s largest light aircraft insurance agency—and the only one that offers the built-in expertise of AOPA’s 60-plus-year commitment to general aviation. Take control of your aircraft insurance and find out why more pilots place their trust in the AOPA Insurance Agency than any other brokerage. We invite you to call us at 800/622-2672 and experience firsthand our special brand of “member” service. Put the power of AOPA to work for you today. Get a free quote.
March 31, 2008
March 31, 2008
