A number of aviation insurers were hit hard by last year's hurricanes and, while the start of the 2006 hurricane season is still several months away, one insurance company is taking steps now to limit its future losses.
Aviation insurer Global Aerospace recently announced that it will now reimburse its light aircraft insureds up to $500 for the cost of relocating their aircraft out of a hurricane warning or watch area. Along with this new coverage, however, comes a potentially expensive catch: There will be a significant increase in the deductible insureds must pay if they choose not to relocate the aircraft and it sustains damage.
"Global's standard ground damage deductible is only $50," said AOPA Insurance Agency Executive Vice President and General Manager Greg Sterling. "However, under the new provisions, this amount will jump to 5 percent of the aircraft's insured value while based in an area falling under a hurricane warning or watch. That's $5,000 for the owner of a $100,000 aircraft - 100 times higher than normal."
While high windstorm deductibles have been commonplace in insurance policies covering property in hurricane-prone areas for years, Sterling noted that this is the first such move made by an aviation insurer.
No other companies had announced similar moves, but at least one other insurer, AIG Aviation, offers similar hurricane relocation coverage without the big increase in deductible.
"Aircraft owners always should read and understand their insurance policy," Sterling said, "but now it is more important than ever for owners located in hurricane-prone areas."
For more information on hurricane coverage, contact the AOPA Insurance Agency, Inc. at 800/622-2672.
February 9, 2006