Insurance (non) coverage of engine failure

Discussion in 'Flight Following' started by bkspero, Feb 8, 2019.

  1. bkspero

    bkspero Pre-takeoff checklist

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    I got my new insurance policy yesterday and it contains a clause that I missed in previous years (it's there) that seems like a very broad exclusion. Would others please comment on their policies? If this type clause is common, then I guess I will have to accept it. If it is uncommon, then I can look for a different underwriter next year. BTW, this is a USAIG "All-Clear" Aircraft Policy.

    The clause is under what is not covered, and it reads:

    Wear and tear. We won't cover loss or damage to your aircraft caused by and confined to wear and tear, deterioration, mechanical or electrical breakdown or failure. Damage caused by breakdown, failure or malfunction of any engine component, accessory or part will be considered mechanical breakdown of the entire engine, and is not covered.

    The bolded section is my emphasis, and it is the sentence of concern. I understand (I think) the concept of betterment....meaning that the insurance company will not compensate me for a new engine when mine has, for example, 1200 hrs on a 2000 hr TBO. And I understand that an insurance company will not pay for a part that breaks. But as I read that clause, it seems to be saying that if any part of the engine fails leading to massive engine damage, then the insurance company will not pay for any of the repair.

    For example, if I experience a valve failure and the pieces rattle around in the cylinder for a while until they break through the piston and fall into the case, I can understand that insurance would not pay for the valve repair, but would have expected it to pay for a teardown of the rest of the engine and any necessary repairs to damage caused by the valve pieces. But as I read this clause, the engine becomes an uncovered write off if it is lost due to breakdown of any part.

    In a broad reading, failure of an engine driven fuel pump that leads to a forced landing and a prop strike also seems to fit this exclusion. The prop strike damage would have been caused by the failure of an engine accessory (the fuel pump). Is that what others have experienced from their insurance company? Am I reading this too broadly?
     
  2. dennisc172

    dennisc172 Pre-Flight

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    I think you are right. I had the unlucky chance to have this tested in real. Due to a mechanical failure inside the engine it 'exploded' and splitted in 2, at 1200ft. I landed safely without any further damage.
    The insurance did not cover anything as it was only engine damage and the emergency landing didn't make any extra damage. This also causes that the insurance would not do a "rough landing check" or recover the plane. I rented the plane and gladly didn't had to pay any costs. Ofcourse, this can be a little different depending on your insurance (and country.., this was in the Netherlands).

    By the way, I think this works the exact same with a car, but then they will probably tow you away on expenses of the insurance.

    I found this: https://insurance.aopa.org/about/news/2018/may/03/insurance-mechanical
     
  3. Gerhardt

    Gerhardt En-Route

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    Clauses like that are going to be found in almost every policy. (I'd say every policy, but there may be one out there.)

    I'm not sure why you'd expect them to pay for the teardown of the rest of the engine due to a mechanical failure. Your car insurance wouldn't pay for that and most people don't give it a second thought.

    That's a little too broad of an interpretation. The prop strike would be treated as just that - a prop strike, but they're not going to pay for your fuel pump.

    I wouldn't let that clause bother me in the least.
     
  4. JOhnH

    JOhnH Touchdown! Greaser! PoA Supporter

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    When the engine in my C172 came from together several years ago, the insurance did not cover anything mechanically related to the engine failure. But it did cover the damage to the leading edge when a stop sign along the side of the road we landed on jumped out in front of us and dinged the wing.

    Me: $33,000
    Insurance company: $5,000
     
  5. Stewartb

    Stewartb Final Approach

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    I had a rod break in flight. It blew a big hole in the case. Plane survived but was stranded on a glacial river. No covereage for the motor but I had chosen to add recovery of the aircraft to my policy. The insurer didn't want to have to plane helicoptered back so instead they paid transportation costs to take a new motor and mechanics to the plane to make the plane airworthy to fly home. I paid 100% of all parts costs. I was lucky to have had the recovery coverage, thanks to a good agent.
     
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  6. Ravioli

    Ravioli Final Approach

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    I had a prop strike. Insurance paid for the tear down inspection and reassembly but I had to pay for the parts and labor that were not directly inspection related.
     
  7. MIFlyer

    MIFlyer Line Up and Wait PoA Supporter

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    Did they pay for and arrange recovery and transportation of it back to an airfield


    Sent from my iPad using Tapatalk
     
  8. tawood

    tawood Pattern Altitude

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    Mine has the following, which seems similar but gives examples (copied directly from policy):


    Wear and Tear. We will not cover damage to your aircraft caused by and confined to freezing, deterioration, corrosion,


    erosion, mold, mildew or any other form of wear and tear. However, if the wear and tear results in damage that would

    otherwise be covered by this policy, we will cover the resulting damage.

    Example: Corrosion found on a control surface such as an elevator would not be covered. However, if the elevator fell


    apart and caused the aircraft to crash, we would cover the crash damage but not the elevator.

    Example: Your aircraft engine fails and the wing becomes damaged during the resulting off airport landing. The engine


    failure is not covered, but the resulting damages to the wing would be covered through this policy.
     
  9. Gerhardt

    Gerhardt En-Route

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    About the only aircraft policy I've ever had issues with is Pathfinder. They require all repairs to be made by the manufacturer - and the cost of transporting the aircraft to Torrance, CA is on the insured.
     
  10. bkspero

    bkspero Pre-takeoff checklist

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    Sounds like it is common and nothing I can affect. Makes the decision easy. Thanks, all.
     
  11. JOhnH

    JOhnH Touchdown! Greaser! PoA Supporter

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    Spun Out
    No. I was about 15 miles from my home airport so my A&P came out. He was friends with the repair shop owner at the airport closer to the landing, so he arranged for him to come out in his pickup truck with a tow bar and tow the plane to his shop. My A&P did all the work at that shop, and there was no charge for the tow or use of facilities. Apparently, they help each other out like that occasionally.

    The biggest problem (other than writing the check afterwards) was that the gates to the airport were designed to let cars through. Not airplanes. They had to send a cherry picker over to pick the plane up and lift it over the fence.
     
  12. kmacht

    kmacht Pre-takeoff checklist

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    It’s insurance, not a warranty. Would you expect your car insurance to fix your motor if it dies while driving your car? Your airplane policy is no different.
     
  13. MIFlyer

    MIFlyer Line Up and Wait PoA Supporter

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    wow! wild ride
     
  14. Tom-D

    Tom-D Ejection Handle Pulled PoA Supporter

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    Wouldn't it be nice if you could wear the engine out, and then the insurance company pay for the overhaul.
     
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  15. Dana

    Dana Line Up and Wait

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    No problem. The premium would be the overhaul cost, amortized over the typical life of the engine...
     
  16. jsstevens

    jsstevens En-Route PoA Supporter

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    FTFY
     
  17. Bill Jennings

    Bill Jennings Touchdown! Greaser! PoA Supporter

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    So, if you're engine costs $30k, that would probably be amortized over 10 years, so $3k/yr + profit.
     
  18. Geosync

    Geosync Filing Flight Plan

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    Like others have said, it's like an auto policy. Insurance doesn't cover your car engine breaking down. If you have a prop strike it only covers related damage, not the wear and tear found when the engine is open. Imagine if insurance did cover non-related damage though. Everyone would have a prop strike at TBO and the insurance companies would go out of business!
     
  19. alfadog

    alfadog En-Route

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    I think you missed the part where it says "confined to".
     
  20. weilke

    weilke Touchdown! Greaser! PoA Supporter

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    If you chew up a runway light, the insurance pays for a 'sudden stoppage inspection' , they don't pay for an overhaul. Unless you pay for the additional items spelled out in the overhaul manual, the shop won't enter it as an overhaul in your engine log. There is no betterment from a SSI (there is however betterment if you buy a new 15k prop rather than replacing 3 blades for 25k, go figure).
     
  21. Stewartb

    Stewartb Final Approach

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    In the case an insurance claim is approved and paid it's generally "adjusted" to represent the value of the loss, not the cost of replacement, right?
     
  22. DutchRoller

    DutchRoller Ejection Handle Pulled

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    It’s insurance, not a warranty.


    Edit. Just noticed kmacht beat me to it.