Insurance requirements for tenants of new general aviation hangars at Austin-Bergstrom International Airport in Texas are "draconian" and might threaten federal funding, says the Aircraft Owners and Pilots Association.
"We've seen nothing that supports these requirements," said AOPA Vice President of Regional Affairs Bill Dunn. "In our experience, we have never seen insurance requirements anywhere close to what Austin wants." One pilot told AOPA that only two of the coverage requirements for a T-hangar would cost "around $1,250 to $1,500 per year" in addition to other coverage.
"We strongly oppose these arbitrary and capricious requirements and insist that you immediately modify and restructure the insurance requirements for general aviation T-hangar tenants to be consistent with what is found at comparable airports," said a facsimiled letter from Dunn to airport management, the Texas Department of Transportation, and FAA officials.
The city is requiring aircraft liability insurance with "minimum bodily injury and property damage per occurrence limit of $1,000,000 for coverage bodily injury and property damage" ($1 million "smooth").
Other requirements include: medical expense coverage limited to $3,000 per person; premises liability for a minimum limit of $1 million; fire legal liability for a minimum limit of $50,000; city of Austin named as an additional insured party; 30-day notice of cancellation in favor of the city of Austin; waiver of transfer of rights of recovery against others in favor of the city of Austin; and $1 million auto insurance.
AOPA believes the current insurance requirements "create serious grant obligation compliance questions that could directly impact FAA Airport Improvement Program (AIP) funding of projects" at the airport.
Ten years ago the association started working with the FAA and airport administrators to obtain federal funds that contributed to construction of the hangars at the former U.S. Air Force base. AOPA's efforts, which included a complaint to the FAA regarding fixed-based operator exclusive rights at the airport, finally yielded 54 T-hangars for GA. But now AOPA is "extremely concerned about the onerous insurance requirements being imposed on potential hangar tenants by the city's risk management office," Dunn's letter states.
Dunn referred airport officials to a letter from Gregory L. Sterling, general manager of the AOPA Insurance Agency, who reviewed the city's insurance requirements. The city "has a duty, as a benefactor of public AIP funds, to ensure that it is open and willing to allowing its airport to serve general aviation," Sterling said.
"It is clear from the review of the requirements that in its zeal to insulate itself from litigation, the city has created a set of insurance requirements that are simply beyond the reach of the great majority of light aircraft owners. As such, they are prohibitive and discriminatory."
Dunn told the city, "In all of our experience representing our members throughout the nation, we have never seen such requirements being imposed on general aviation operators." He pointed out that "contractual liability" and "fire legal" apply to "commercial" operators and are not applicable to individuals.
"Implementing changes and giving serious consideration to the suggested insurance provisions outlined in Mr. Sterling's letter can avoid this controversy," Dunn told the city.
Sterling offered six insurance requirements that would concurrently work for GA users and satisfy the city's risk management department. He suggested:
The 380,000-member Aircraft Owners and Pilots Association is the world's largest civil aviation organization. Nearly two thirds of the nation's pilots are AOPA members, as are some 26,300 Texas pilots.
AOPA represents the interests of general aviation—all flying except scheduled airlines and the U.S. military. The 221,000 general aviation aircraft in the United States constitute 92 percent of the nation's civilian fleet. General aviation accounts for 60 percent of all hours flown, and 80 percent of all takeoffs and landings.