Are You Covered?

Because not all of us can afford to own and maintain an airplane of our own, the rental market has been healthy for years. But the climate is changing. Some major insurers have recently reduced coverage for certain activities or stopped insuring flight schools altogether. Others have raised rates anywhere from 40 to 100 percent in recent months, and many FBOs have concluded that they just can't afford the increased cost, reduced coverage, or increased liability that follows. As a result, many FBOs are getting out of the rental and instructional business. If you are a renter, you need to know how the changing environment affects you and how to protect yourself.

Flying with the confidence born of knowing exactly where you stand is important. If you're just starting out in life and have few resources, you may have little to lose if something goes wrong. But if you have accumulated assets over the years, you need to make sure that an airplane incident or accident won't ruin your life. It has happened.

The only way to make sure that it doesn't happen to you is to fully understand what your responsibilities are and how to fulfill them, to recognize the liability you assume when you rent an airplane, and to do everything you can to "fly right." These few principles coupled with a firm understanding of your rental contract are essential. Make sure to read the fine print. It might surprise you.

Subjects such as accident liability, what your coverage is, the terms and conditions of your rental, what you can and can't do in your rental airplane, how to ensure that the maintenance of your rental airplane is up to standards, and other pertinent subjects are all important. You have to investigate and understand them.

Check Out The Indicators

A few months ago I rented an airplane from an FBO some 500 miles from my home base. Before my trip, I investigated the airport, checked out rental sources, got some recommendations, and called ahead to schedule the type of aircraft that I thought I would be competent (both current and proficient) to fly.

At the appointed time and place, I arrived at the airport. The FBO looked good-modern facility, polished airplanes, courteous people, apparently efficient. I approached the rental clerk and filled out the obligatory (though very sketchy) paperwork certifying flight time, certificates, the date of my last flight review, and other information. So far, so good.

Then I met my checkout instructor, and we went to the airplane to fly-and more importantly to fill in the appropriate boxes certifying for the FBO's insurance policy that I had been satisfactorily checked out.

This was not the first time that I had rented an airplane at an unfamiliar location, and I believe I know the signs of a professional operation. So should you if you rent other peoples' airplanes.

I was somewhat surprised that I was not required to produce my logbook to verify the information I had put on the form, but of course, I was not the pilot in command on the checkout flight. No big deal. Even so, I noticed that no one asked to see any documentation regarding my status as a pilot.

The second time my eyebrow raised a little was on the check flight itself. Admittedly, I currently instruct in a lot of different airplanes, usually flying a minimum of two to four days a week, and I am a reasonably smooth pilot. So I don't exactly project the profile of a dangerous pilot.

Even so, I didn't think flying one closed pattern to a full stop-without any other discussion of the airplane, a written quiz for the record, or anything else-was adequate to demonstrate competence to rent a $100,000-plus airplane, load it with people, and go flying off into the murk with no operational restrictions whatsoever in the rental agreement. To my way of thinking, it certainly would not satisfy most insurance companies. Nonetheless, I was signed off.

Even the check pilot's rationale, "There's a big dust storm about 10 miles out, and it's coming this way," didn't justify a checkout that proved only that I could fly one pattern without crashing.

I scheduled the aircraft for a three-hour block the next day. Not one word was said about insurance. I signed the rental agreement and was "good to go" as far as the FBO was concerned.

If you find yourself in a similar position, it's important to remember that, while the FBO may not be worried-they're insured-maybe you should be. To make certain that you are prepared when you go to rent an airplane, you should develop a renter's plan, and it should start with insurance.

A Renter's Plan

The first step in every good renter's plan must be to ensure that you are protected when you fly. You might start off by asking yourself, "What would happen if the airplane I am about to rent is involved in an accident while I'm at the controls? What if I am judged responsible for that accident?"

Whether or not you are found to be responsible following an accident, there is a high probability that you will be sued anyway if any injury or damage to anyone or anything-including your airplane-has occurred as a result of the accident. So will everyone else associated with the airplane. Even your FBO's insurance company can sue you to recover the value of the damaged aircraft. More on that later.

The bottom line here is that you can be wiped out financially if you are at fault and are sued. Even if you are not found to be at fault, you will have to defend yourself if you are sued, and lawyers are expensive.

To help protect yourself from negligence claims, be sure that you stay proficient, follow the rules, conform to standard aviation practices, and use good judgment every time you fly. Evidence that you've done these things can help protect you in the event that you are sued.

Ask The Right Questions

Even if you "fly right," without adequate nonowned-aircraft or renter's insurance you could lose all that your hard work has built for you over the years. Renter's insurance is not difficult to get, and it's not particularly expensive. A few hundred dollars a year-less than most people pay for auto insurance-can protect you against liability, property damage, and aircraft damage claims. For an insurance estimate or to apply online, visit the AOPA Aircraft Insurance Agency at AOPA Online ( www.aopa.org/info/certified/ia-rent.html ).

If, for some reason, you choose not to have renter's or nonowned-aircraft insurance, it's more important than ever that you understand your FBO's in-surance as it relates to you. But what questions should you ask? It is not enough, as one renter responded on a recent insurance survey, to say, "I don't own a plane and don't carry renter's insurance because the school I rent from is very reputable...and I trust their insurance is adequate."

Far too many pilots believe they are protected adequately by their FBO's insurance when that might not be the case. To determine whether or not your school or FBO's insurance is adequate to cover your needs (i.e., protect you and your family if you crash, damage the airplane, injure your passengers or people on the ground, or cause other property damage), ask the FBO the following questions before you fly.

1. What is the name of your insurance company? Is your policy in force at this time, and may I see a current certificate of insurance?

In the words of one insurance executive, "You would be surprised at how many small FBOs continue to operate after having their policies cancelled." Without your own insurance, you can guess who is left holding the bag in the event of a mishap.

2. What limits of liability do you carry? Does your policy provide liability insurance to me as a renter? What are the limits of that liability?

AOPA and other aviation Web sites contain informed articles about liability limits. It is not unusual for a nonowned-aircraft rental policy, available to renter pilots for less than $500 a year, to contain liability coverage of $1 million per accident and $100,000 per person. Depending on your resources, that might be enough-or it might not. The point is, if you don't have your own insurance, find out how much of the FBO's insurance applies to you.

3. Do you carry full aircraft damage coverage? What is the deductible? Does your current insurance policy provide a "waiver of subrogation" to renter pilots? Can I see that in writing?

Most pilots have never heard the word subrogation. It simply means that, after the insurance company pays the FBO because you crashed its airplane, the insurer then can turn around and sue you for what it paid the FBO.

While one FBO owner said that subrogation seldom happens in practice (he'd had three "total loss" claims in the last five years), one prominent aviation insurance company's Web site notes that, "It is common practice for insurers of flight schools to 'subrogate' against renter pilots to recover their payment for damage over the deductible." Take your pick as to who's correct.

Note that liability insurance and hull insurance are two different things. Liability protects you against injury or damage to persons and property on the ground. Hull insurance protects against loss of the airframe.

4. If I damage your airplane and it is my fault, what do you expect me to pay for the damage? What does your insurance company expect me to pay? Do you expect me to pay for loss of income while the aircraft is repaired? What if your aircraft is damaged while I'm flying it and it's not my fault?

5. If I hurt somebody or damage someone's property, how will your insurance protect me? What will your insurance company pay on my behalf?

At the very least, you will know the answers to these questions and can logically assess the risks that you face with a specific rental.

A Word About Maintenance

When I walked up to the counter at the FBO that day and asked to see the maintenance records for the airplane, all I got in return was a blank stare. In more than three years, the clerk said, there had never once been a request from a pilot to see maintenance records-and the clerk had no idea where they were.

So I asked to speak to the maintenance chief on the phone. He told the clerk how to punch up the records on the computer...and voila. There they were: the annual inspection, the 100-hour inspection, the status of compliance with airworthiness directives, and the inspections of required equipment. You have no way of knowing whether the airplane is airworthy without specifically checking all of these things.

Think of it as another sort of insurance. By spending a few minutes reviewing the maintenance logs, you pro- tect yourself from poorly maintained airplanes and the liability of illegally operating an unairworthy aircraft. Remember, as pilot in command you are responsible for making sure that the airplane you fly is airworthy. But don't look for a clear-cut definition of airworthy in the federal aviation regulations (FARs). There isn't one.

Airworthiness for a single-engine general aviation airplane is a combination of things, most of which are discussed in FAR Parts 43 and 91. In addition to a thorough preflight inspection, there are other things that you as the operator need to check. Here's your checklist:

• Documents certifying/describing airworthiness, registration, operating limitations, weight and balance, and (if planning to fly the aircraft outside the United States) a radio station license;
• Record of annual inspection (FAR 91.409);
• Record of 100-hour inspection (FAR 91.409);
• Record of other checks required by the aircraft manufacturer (i.e., 50-hour and other aircraft specific checks);
• Record of altimeter testing within the preceding 24 months (FAR 91.411);
• Record of pitot static system testing within the preceding 24 months (FAR 91.413);
• Record of transponder test and inspection within the preceding 24 months (FAR 91. 413);
• Emergency locator transmitter (ELT) checks and battery time limits; and
• Record of compliance with applicable airworthiness directives.

The FAA has a pamphlet on owner responsibilities, inspections, records, and other things you must check. It is titled Plane Sense, FAA-H-8083-19.

If you devote the time and headwork needed to understand your responsibilities, protect yourself from misfortune, and follow the rules, you should be able to enjoy a safe, fun flying career. It pays to know what you must do and to do it thoroughly.