Insurance question:

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StraightnLevel

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StraightnLevel
As I'm working through my PPL, I am starting to look at what plane to purchase when I have the cert. Part of the plan has to be insurance, right?

Here's my question: Assuming that I own the plane outright (I hate the idea of borrowing money to buy toys or luxury items), what insurance do I need to carry? Not what SHOULD I carry, but what MUST I carry?

In a nutshell, if I can afford to wad it up and walk away from the smoldering wreckage, and I have other personal liability coverage, is there any legal or operational reason that I have to have insurance at all?


[For context, when I owned and drove a couple of race cars, I had to self-insure. There is no such thing as "hull coverage" for a race car; the only policy you can buy is limited to storage and transport.]
 
Must?
There is no FAA regulation requiring aircraft insurance.​
I have heard there is only one state that requires aircraft (Minnesota) but you want to check your state.​
The airport where you base your aircraft may require minimum liability coverage.​
If you have a loan + security interest on the airplane, your bank will require hull coverage to protect them.​

What "other personal liability coverage"? Most "other" policies specifically exclude aviation.
 
You don’t have to have any insurance on a plane most policies only go to a million , so if a court awards a plaintiff against you 10 million you only owe 9 million I carry liability as required by the airports I base at and at my age no one will give me hull coverage or in motion , it will cover the little issues but taxi into a G 5 and that won’t cover much I read a story about a crew that ran the wing of a G 550 into a post somewhere and it cost a million seven hundred K to fix it everything that moves is a risk financially, each one of us has to make that decision. Have fun
 
I know an airport authority in Las Vegas that tried to impose a $2M Liability insurance requirement on the aircraft tied down on their airfields. There was no insurance company that would issue a $2M policy to most GA light aircraft. Good luck... they had to change their policy back to the $1M that most insurance companies would provide.
 
So, it sounds like I need to ask a couple of local airports and FBOs what their requirements are. I'm within a short drive of several, so it's helpful to understand this as part of the selection process.

Thanks!
 
Most insurance companies will sell you liability ins. Don’t know of any that include aircraft in their umbrella policy
 
Other than where you keep the plane may require insurance as part of their lease agreement there are zero requirements to carry any insurance on personally owned GA part 91 private aircraft.

Check your exclusions of the personal liability coverage with aviation...every carrier has different limits on what is covered.
 
Anecdotes about multimillion dollar claims in non-revenue piston (and that very much excludes leasebacks/clubs, before the usual suspects come with their outlier horror stories) exceeding policy maximums are of course not implausible, but it doesn't make carrying ye old million dollar with sublimit policies placebo.

Most people own and fly under these "insufficient" policies without leading their dependents to destitution because of the specter of clipping some overpriced corporate jet's wing with their lawnmower or crashing into the town's proverbial only water treatment's facility. The nihilism about "underinsurance" is unwarranted imo.

Granted, I may be unknowingly speaking to a bunch of 10%ers who merely appropriate the 'upper middle' moniker for social self-preservation purposes; perhaps I'm too poor to understand an underinsured condition in the first place. I do think insurance has a perverse inflationary effect on the market. I often "wonder" what level of demand destruction would ensue if people couldn't recover the debt-issued "price" they trade all manners of artifacts for (housing, I'm looking at you buddy...).

I'm being rhetorical of course...but that's me as an aggrieved saver suffocating under a 70% consumption-by-GDP stampede of unrepentant heroin addicts, and I'm trying not to let the intrusive thoughts win :devil: :fingerwag:
/sarc(ish)
 
StraightnLevel said:
As I'm working through my PPL, I am starting to look at what plane to purchase when I have the cert. Part of the plan has to be insurance, right?

Here's my question: Assuming that I own the plane outright (I hate the idea of borrowing money to buy toys or luxury items), what insurance do I need to carry? Not what SHOULD I carry, but what MUST I carry?

In a nutshell, if I can afford to wad it up and walk away from the smoldering wreckage, and I have other personal liability coverage, is there any legal or operational reason that I have to have insurance at all?


[For context, when I owned and drove a couple of race cars, I had to self-insure. There is no such thing as "hull coverage" for a race car; the only policy you can buy is limited to storage and transport.]
Click to expand...
Assuming someone doesn’t steal it, hail doesn’t make it look like a golf ball, or a storm does destroy it on the ground.
 
You are not required to have insurance. Your airport, landlord, or someone else may require it. You can fly a little and get insurance once you have more experience too. That would significantly reduce your rates. I kind of feel like it’s a waste of money but then if I have a gear up or gear collapse, then it might be worth it. If I land off airport, who pays for relocating the aircraft? I guess that would be me and I don’t think it’s cheap. Yet I heard someone hired a helicopter once to relocate their aircraft and that was a few grand, that might be the cost of your first years insurance policy or your first two years.

With that being said, does fixed gear have a better chance of not having an issue?
 
StraightnLevel said:
Well, that's what hangars are for.
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True, but then what if someone flies into your hangar, sets fire, or natural disaster destroys the hangar. Given T hangars are connected there is risks from the other tenants.
 
hindsight2020 said:
Anecdotes about multimillion dollar claims in non-revenue piston (and that very much excludes leasebacks/clubs, before the usual suspects come with their outlier horror stories) exceeding policy maximums are of course not implausible, but it doesn't make carrying ye old million dollar with sublimit policies placebo.
Click to expand...
All sorts of things can happen and big cases can definitely take place against a piston driver, but the two main purposes of insurance in a liability claim are payment of defense costs and being in a position to throw easy money at the problem. A plaintiff lawyer with even a good liability claim is often faced with a choice between (a) receiving the "inadequate" policy limits now or (b) spending time, out of pocket money, energy, and other resources to win and then more time, out of pocket money, energy, and other resources to collect against a private party who will probably be bankrupt by then.
 
mandm said:
You are not required to have insurance. Your airport, landlord, or someone else may require it. You can fly a little and get insurance once you have more experience too. That would significantly reduce your rates. I kind of feel like it’s a waste of money but then if I have a gear up or gear collapse, then it might be worth it. If I land off airport, who pays for relocating the aircraft? I guess that would be me and I don’t think it’s cheap. Yet I heard someone hired a helicopter once to relocate their aircraft and that was a few grand, that might be the cost of your first years insurance policy or your first two years.

With that being said, does fixed gear have a better chance of not having an issue?
Click to expand...
Issue with what? Rates? Yeah, sort of. If one looks at the breakdown of an aviation insurance premium, one often discovers the liability portion is cheap but the hull expensive. So much of the driving force is hull. $250,000 hull damage claim is a $250,000 hull damage claim, but the underwriting for unintentional gear up landings can be expected to be a bit different than for an airplane where that can't happen.
 
midlifeflyer said:
All sorts of things can happen and big cases can definitely take place against a piston driver, but the two main purposes of insurance in a liability claim are payment of defense costs and being in a position to throw easy money at the problem. A plaintiff lawyer with even a good liability claim is often faced with a choice between (a) receiving the "inadequate" policy limits now or (b) spending time, out of pocket money, energy, and other resources to win and then more time, out of pocket money, energy, and other resources to collect against a private party who will probably be bankrupt by then.
Click to expand...

Bingo. Agreed, which is why I said it doesn't make it placebo.
 
Clip4 said:
Until a tornado take the hangar and the plane.
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We don't see many tornados in Wisconsin.

Insurance companies are profitable because they charge more than the likely risk-adjusted cost of claims. A lot more. Your premiums pay for the claims, staffing, processing, profits, commissions, and all of the other overhead costs of having that company in existence.

This is why the great majority of large companies are self-insured, and pay the insurance companies for the service of processing claims, but not to carry the risk.

I can sort out the value of insuring against all of the non-flight risks and decide whether that is worth insuring. Actual flying risk, though, is another matter. If I am totalled along with my plane, I don't need hull coverage, and it won't impact my family's well-being significantly. If I walk away from a crushed beer can, it's no different from the race car that I wrote off at Road America in 2012. It stings a bit in the wallet, but that's a risk I can live with.

Liability is where the real question lies (at least for me).
 
hindsight2020 said:
Granted, I may be unknowingly speaking to a bunch of 10%ers who merely appropriate the 'upper middle' moniker for social self-preservation purposes;.....
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You might be over-estimating what it means to be a 10%er. And the "downgrade" from top 10% to upper middle is only about $250k of net worth.

Wealth In America: The Numbers​

Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth.​
​
Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million.​
​
Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.​
finance.yahoo.com

Are You Rich? Here's What Americans Think You Need To Be Considered Wealthy

In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2...
finance.yahoo.com finance.yahoo.com


Here's how it breaks down by class:
QUINTILE​
DEFINITION​
MEDIAN NET WORTH
Bottom 20%​
Poverty Class​
$6,030
Next 20%​
Lower-Middle Class​
$43,760
Middle 20%​
Middle Class​
$104,700
Next 20%​
Upper-Middle Class​
$201,800
Top 20%​
Wealthy​
$608,900
These are the 5 sections that are defined by the US Census Bureau.


I'm pretty certain that far more than 10% of POA members fall into that top 10% category. The definition of "rich" is mostly a matter of opinion, and opinion polls in the US put it at around $2.2M net worth. I suspect we have quite a few on this forum that fit that category (and some well above it).

So when you say
hindsight2020 said:
The nihilism about "underinsurance" is unwarranted imo.
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I don't think it's nihilism at all; for many pilots, it's a realization that they have significant assets that they could be putting at risk if they don't carry sufficient insurance.


However, you're correct when you say
hindsight2020 said:
Most people own and fly under these "insufficient" policies without leading their dependents to destitution....
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but that's because it's very rare for a crash of a small private plane to cause millions in damages. Most crashes only damage the plane and it's occupants, with little or no damage on the ground.

I agree that most of us are not underinsured, but it's because the likelihood of damages that could attack those assets is low.
 
StraightnLevel said:
... it's no different from the race car that I wrote off at Road America in 2012. It stings a bit in the wallet, but that's a risk I can live with.
Click to expand...


When I was racing, the mantra was "Don't put any more money on the track than you can afford to hold between your fingers and touch with a lit match." I take a similar attitude toward my airplane.
 
StraightnLevel said:
Liability is where the real question lies (at least for me).
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it is for a number of people. I had a friend years ago who only bought liability and accepted the risk of losing the airplane, even though it was being used to train his grandson how to fly, which at least in theory increased the risk of loss.
 
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