Non-Owned Coverage Question

COPilotDA40

Filing Flight Plan
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DenverPilotDA40
I am looking to get a non-owned policy. I've looked at AVEMCO, AIG, and STARR. All three say that the coverage is excess, and both AIG and STARR only cover up to the property damage coverage or 5k, whichever is less for the deductible on other policies. If the flying club has a policy, and the deductible is over 5k, would it even make sense to have a non-owned policy? Seems like it wouldn't cover anything.

I talked to one broker and they said it would, but reading the actual policy language makes me think otherwise. Any experience would be appreciated.
 
You need to fully understand what you're insuring and what other coverage YOU might have. Are you a named insured on the flying club policy or just an approved pilot (or flying under an open pilot warranty)? Big difference in terms of coverage, including liability coverage. When you're buying renters insurance, you're really buying two things: (1) liability coverage to protect YOU from a lawsuit stemming from an event, and (2) hull coverage to, effectively, cover any subrogation claim that might be made against you buy the aircraft owner's insurance company.

Remember, the policy held by the owner of the aircraft protects only the owner of the aircraft and any named insured. Approved pilots are typically not automatically named insureds. The primary benefit of being a named pilot is that the OWNER remains covered if you're flying the plane; it doesn't extend actual policy coverage to you.
 
I am looking to get a non-owned policy. I've looked at AVEMCO, AIG, and STARR. All three say that the coverage is excess, and both AIG and STARR only cover up to the property damage coverage or 5k, whichever is less for the deductible on other policies. If the flying club has a policy, and the deductible is over 5k, would it even make sense to have a non-owned policy? Seems like it wouldn't cover anything.

I talked to one broker and they said it would, but reading the actual policy language makes me think otherwise. Any experience would be appreciated.
I haven't looked at any of those policies in a while and things change, so take this only as a general explanation.

If I recall correctly, the "excess insurance clause" is like most - if there is other insurance available to you, it goes first. That's generally a reference to insurance you purchased or on which you are an insured with respect the claim. Simple example: the typical umbrella policy is excess insurance. If you cause a car accident, your umbrella isn't involved unless the damages exceed the liability limits of your regular auto policy. The FBO policy? It is insurance available to the FBO. It is not insurance available to you.

Again, I haven't looked at the specific policies you are looking at (and I wouldn't give you a legal opinion on it even if I did), but deductible coverage is generally no-fault deductible coverage. Remember that insurance generally covers liability - you have to be at fault. Same for non-owned policies. If you damage the airplane you are liable and your non-owner policy pays. If you are not liable for the damage, the insurance doesn't.

Many rental FBOs have rental contracts which say that, in case of damage, the pilot who had possession of the airplane is responsible for the deductible, regardless of fault. You fly for a $100 hamburger and wen yo come back to the plane, there's a huge dent in the wing. It's not your fault but it is your problem, at least for the deductible. So a number of policies have added "no fault deductible coverage." Nice, but they are going to limit it.

From what you describe, it sounds like, if you were not at fault, it would cover you for the $5K deductible on the club policy (it's insurance available to the FBO, not to you). If the FBO policy had a $10,000 deductible and it wasn't your fault, your policy would only cover $5K of the $10K. OTOH if the damage were your fault, the overall non-owed policy limits kick in.

You need to have someone who knows how to read a policy read the for you. Be wary of what brokers may tell you. I had a guy who had an accident with a non-owned airplane and was told by three different people working for the brokers it wasn't covered. All three were wrong.
 
Three things to bear in mind:

The hull is only part of the coverage. Most folks buy the hull limit to cover the deductible of the FBO's policy they're renting from.

The liability is there to cover the big claim if you hurt somebody on the ground when you're PIC. No matter what the owner or FBO has, they're coming after you too.

Finally, along with the policy comes a lawyer. That's worth the cost of poker alone if the shtf.
 
Interesting, thanks for the responses.

Generally do folks get hull coverage to cover the full value of planes they are flying or just the deductible? Full hull coverage seems prohibitively expensive for non-owned policies. It is also concerning that liability is limited to 100k per seat. I can't find a non-owned policy that has a smooth limit or any excess policies that would cover more than 100k.
 
Of course, non-owned prices are going to rival owned prices. The risk is more or less the same. You can expect to pay thousands per year.
My regular policy also covers me on flying other's airplanes up to my declared hull value.
 
Interesting, thanks for the responses.

Generally do folks get hull coverage to cover the full value of planes they are flying or just the deductible? Full hull coverage seems prohibitively expensive for non-owned policies. It is also concerning that liability is limited to 100k per seat. I can't find a non-owned policy that has a smooth limit or any excess policies that would cover more than 100k.
It depends. Assuming you are in a situation in which you could be responsible for more than the deductible (that's a function of the deal with the flight school/FBO), some folks do a mental calculation: what is the most likely hull damage and what is the risk of that happening?

As an example, I might decide that the risk of totaling the airplane is pretty low, so I am not going to pay for hull coverage for full fmv. OTOH, I might figure that the most like hull incident is a bad landing and a prop strike and have enough to cover an engine tear down/repair.

Of course, if you are lucky enough to be renting from a place where, no matter what, the only hull cost you are responsible for is the deductible, you can cover just it or self-I sure.
 
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