Airplane partnership insurance

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Ananth V

Filing Flight Plan
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neuronsnglia
Our airplane partnership (1972 Piper Cherokee 180) expanded from 4 to 6 members, and the insurance premium quadrupled. Apparently, the insurance companies treat up to 4 (sometimes 5) pilots as a partnership and hence low risk, whereas 6 or more pilots cause it to be treated as a flying club (in the same category as clubs that rent aircrafts etc) and hence higher risk...Anybody have experience with a similar situation? Any solutions? Thanks!
 
Have 5 chip in and buy out the 6th.

Here is an oddball solution:
Insure the plane for 5 people and have the 6th one buy Avemco non-owned coverage. The Avemco policy specifies that if you own less than 1/5th of the corporation that owns the plane it is not considered 'owned' and therefore covered by their policy.
 
Im no expert, but it sounds like the plane needs to be owned by an LLC with the members each owning a share. Every man carries a deductible policy like a renter, maybe? It’d be cheaper than paying a $2400 policy and might be worth paying for some professional advice from an accountant and attorney.
 
Be very careful about using 'renters' insurance to get around the high partnership premium.

Renters or non-owned insurance doesn't generally work the same way as owned insurance and could lead to a situation where there is no coverage at all.

Non-owned policies are typically written to provide coverage for the user's negligence. For example, if I rent a Citabria and ground loop it, a non-owned policy such as through Avemco will cover the damages due to my error.

BUT, let's say you rent your airplane out and the engine fails and the pilot executes a forced landing in a field and there is damage to the airplane…..the non-owned policy may not cover if it is determine that the damage was not the result of negligence on the part of the renter. Or (as in a case that appeared in the thread on POA) a deer runs in front of the airplane on the runway, the non-owned policy will not cover - it becomes the responsibility of the airplane owner's policy to cover.

And (as we saw with the deer accident) that can become a real issue when the insurance company finds out the airplane was being operated by a renter and the owner's policy is not a commercial policy…….

So, to properly cover a renter, you need a commercial policy for the rest of the partners which is probably going to cost at least as much as the premium to insure all 6 partners.
 
I don't think there are any underwriters that will write a policy for 6 named pilots without calling it a "club." My partnership of 5 has "regular" insurance, but our underwriter options are limited because many stop at 4 named pilots. In theory, if you're comfortable with the way the policy is worded as far as who the "insured" is ("XYZ LLC and its members..."), you could see if your underwriter will give you 4 named pilots and an open pilot warranty, under which the other 2 could fly (assuming they meet the qualifications). That starts to tip-toe into a pretty grey area, though.
 
We have 14 members and 2 aircraft. Our premium is ~6k.

The lawyer in our group explains it this way: "The premium is defined not on the experience of the current pilots, it is based on the assumption that the next new pilot will be minimally qualified."

Our lowest time member is at 180hrs. The minimum to fly one of the planes is 100TT and complex endorsement. Next lowest is me at 400hrs and then it goes up and up and up from there.

So, ask the insurance companies if you can set higher minimums and how that could effect the premium.

But the number you mentioned seems to be about right. You didn't say, but our hull coverage is ~$80k each IIRC.
 
Similar to Ravioli, our club has 16 members, 2 aircraft, C182P and BE35. Our premium is ~6.5k. Members range from 250-300hr recreational pilots to full time ATP's

But due to past incidents with the Bonanza, we had to raise the time required to qualify to operate it. Now 300hrs PIC. Most members qualify, some of our newer ones are working on it. While the time requirement can sound high to outsiders, it was good business sense, as previous premiums were 13k when we had a much lower time requirement.

It also helps to have an agent who will work very hard for you. Ours really went to bat for us to get that major reduction and get the policy bound.
 
I have been told the same over the years. We have 4 named pilots, and on occasion have gone up to 5. There has been a surcharge of about ~10% for the fifth pilot when we've done that, so we try to keep it at 4. And at 4 and below, the rate is totally based on the lowest time pilot.
 
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