Is your Aviation Insurance Policy a Time Bomb?

Many uninformed aircraft owners view their aircraft insurance no differently than their auto, homeowners, or commercial business insurance.  They consider it a necessary evil of doing business and put little energy into working with their aviation insurance broker to fine tune the details of their coverage. That’s a huge mistake; one that hopefully will not come back to bite them. Unfortunately, the only available test to discover if your policy was constructed properly is to actually have a loss.  That’s when the counter on the time bomb may hit zero and the aftermath - could be disastrous to you or your company.

Policy Forms Non-Standard

A little understood fact about aviation insurance policies is that they are all written on non-standard policy forms.  To the layman, this means every insurance company writing aviation coverage has a different policy form. Some are MUCH broader than others.  The aviation insurance broker has to have detailed knowledge of the insured’s needs and be intimately familiar with each aviation insurance company’s policy wording and coverage offerings in order to craft a policy as bullet-proof as possible.  There are many changes an insurer will make to broaden coverage under their insurance contract, but you have to know to ask for them. Coverage being granted or denied has literally come down to the difference of one word between one insurance company’s policy vs another’s.

Call in the Bomb Squad

We have reviewed numerous aviation insurance policies sent to us from clients who were previously with another insurance broker who didn’t understand aviation, and it is simply astounding how many are poorly or improperly constructed. Truly, time bombs that may never be discovered.  So, what steps can an aircraft owner take to tilt the odds in their favor?  Your mission should be to seek the most professional experienced aviation insurance broker you can find to represent you or your company in the insurance marketplace.  Second, if your current broker isn’t asking questions and seeking updated current information each year at renewal, you probably want to consider moving to one that does. Last, clout in the insurance market. While big is not always better, a broker with a large book of business with insurers will normally have more success negotiating on behalf of their client, than one with a small book. Simple logic but true.

In the end, because aviation has such a stellar safety record, even if you have a policy that IS a time bomb, odds are in your favor it will not go off – unless you are one of the unlucky ones that has your number called with an unexpected aircraft accident.  Thus, steps taken now may salvage your financial future.  You can take action or ignore it, at your own peril. An AssuredPartners Aerospace broker would be happy to be your SIC in helping navigate around the “weather”.  Visit ap-aerospace.com/own or call 800-622-2672 today to speak with one of our experts.