Insurance question

Jeanie

Jeanie

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Jeanie
I have a student who is going to use a friends plane for his training. What should we do about getting apropos insurance? I imagine I'll need separate insurance as a non owned CFI.
 
The friend either needs to make sure the Student qualifies for the Open Pilot Waiver on his policy (which a Student Pilot probably doesn't) or gets ths Student names as a pilot on that policy. The Student needs to obtain his/her own non-owned ("renter's") policy including hull and liability coverage. Alternatively, the friend can get the Student listed as a named insured (not just named pilot) on his policy, but with a Student Pilot, that will probably cost quite a bit extra. If you will be giving the Student training in the third party's airplane, you'll have to do all that (although having the Student listed for "dual only" on both his and the owner's insurance will help) as well as have your own non-owned hull and liability policy. Further, the owner's insurer will have to buy off on the idea of the owner's plane being used for training by a second party receiving training from a third party -- check carefully on that with the owner's insurer.

Finally, make sure that the Student is obtaining the airplane from the owner, not you. Otherwise, you'll be providing both the plane and the training, and then a 100-hour inspection would be required if the plane has over 100 hours since the last annual.
 
To try and say what Ron said in a different way, in the hope that it may help:

First, the owner needs to give permission for this. The owner also needs to let his insurer know that the student will be flying and you will be teaching, and ensure that HIS coverage isn't affected. This is usually done by naming you both as authorized pilots on the policy, but it doesn't afford either of you any protection.

Then, the student needs coverage. He can either provide full coverage for the hull and liability through a non-owned policy, or he can work with the owner to become a named insured on the owner's policy.

Finally, you as the CFI need coverage, either through your own non-owned policy coverage or becoming a named insured on the owner's policy.

Ethically, I think it's your obligation to point the need for coverage out to the owner and your student. Practically, your only obligation is to yourself. If you're in the airplane and you come to grief, you want an insurance policy that covers YOU. If the owner and student are still exposed after your warning, I don't think that's your problem any more.

If you've already got coverage for your airplane, you might see what adding on non-owned hull coverage will cost. It might be cheaper than a separate policy, but be sure it covers the same activities (instruction) as your owned airplane coverage does.
 
I can give you a first hand example of just the scenario you described. I let a friend use my Cardinal this summer to do his private pilot training in. He used another friend of mine, EdFred, as his CFI. I called my insurance carrier and had the student added as a named insured on my policy. He was a 0 time pilot named as a student and he only increased my annual premium $172. Ed met the open pilot clause on the policy so the insurance company said there was no need to add Ed as a named pilot. My policy has a clause that covers me in non-owned rental aircraft and I think Ed's does too, so I believe he was covered by the policy he has on his own plane. The student paid me the $172 policy increase, I charged him a minimal dry rental fee, Ed charged him a very reasonable CFI rate, and we now have a young, new certificated private pilot.

I think this is one of the best situations for getting new pilots certificated and I think you'll have great success with it.
 
pilot117 said:
My policy has a clause that covers me in non-owned rental aircraft and I think Ed's does too, so I believe he was covered by the policy he has on his own plane.
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That isn't a given. I have the same sort of thing on my insurance, but it does NOT cover me when I am instructing.
 
Call the owners insurance agent and find out. It depends on the policy and limitations the owner has in effect. You need to know specifically what the Open Pilot Warranty states and if there is a "No Subrogation" clause in effect. If there is a "No Subro" clause, then all you have to worry about is that everyone is covered on the open pilot warranty, and if not is added as a named pilot. If there is no "No Subro" clause, then it's probably wise to also have a "Non Owner" policy in effect to cover the individuals from subrogation.
 
And even if there's a no subro clause, that just covers against them coming against you for the insurers losses. You are still uncovered for liability if you kill Farmer Brown's prize bull in your off-airport landing, unless you are a named insured on a liability policy.
 
TMetzinger said:
And even if there's a no subro clause, that just covers against them coming against you for the insurers losses. You are still uncovered for liability if you kill Farmer Brown's prize bull in your off-airport landing, unless you are a named insured on a liability policy.
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Do you have something in writing from your insurer to back that with or are you speculating? I have never heard of that or seen a similar situation played out on a claim. As an adjuster, I have never seen liability severed like that in an accident.
 
OK - you own the plane.
Jeannie is flying the plane, and she's a named pilot but not a named insured.

Jeanie has a problem and lands off airport and kills farmer brown's prize bull.

Farmer Brown sues Jeanie (as the pilot), and you (as the owner), and probably Cessna and Lycoming too.

Your insurance will cover your liability as the owner, but not Jeanie, as she's not a named insured, only a named pilot. Your insurance will cover your hull damage, and depending on the subrogation clause, may or may not try and recover their loss from Jeanie.

Now, if she IS a named insured, she's covered too.

Bottom line is that unless you are a named insured on a policy somewhere, you're naked as far as coverage goes.
 
Henning said:
Do you have something in writing from your insurer to back that with or are you speculating? I have never heard of that or seen a similar situation played out on a claim. As an adjuster, I have never seen liability severed like that in an accident.
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I didn't know you were an aviation adjuster.

The aviation policies I've read say in writing whom they cover and whom they don't. And, as you said earlier, you really need to look at (and understand) the individual policy. Unlike auto insurance, which for policy reasons, tends to be fairly uniform, aviation policies are not.

An aside on the "open pilot warranty." What I think a lot of people miss is exactly what it is. It's a promise by the policy-holder to the insurance company that no one will act as PIC of the airplane without certain minimum qualifications. If the policy-holder breaks that promise with respect to a claim, the insurance company doesn't have to pay out. (There may be other policy provisions that change that result, such as "naming" a pilot with the insurer's approval).
 
Thanks everyone. I think I got it now.... I'll check it all out and go from there.
 
TMetzinger said:
OK - you own the plane.
Jeannie is flying the plane, and she's a named pilot but not a named insured.

Jeanie has a problem and lands off airport and kills farmer brown's prize bull.

Farmer Brown sues Jeanie (as the pilot), and you (as the owner), and probably Cessna and Lycoming too.

Your insurance will cover your liability as the owner, but not Jeanie, as she's not a named insured, only a named pilot. Your insurance will cover your hull damage, and depending on the subrogation clause, may or may not try and recover their loss from Jeanie.

Now, if she IS a named insured, she's covered too.

Bottom line is that unless you are a named insured on a policy somewhere, you're naked as far as coverage goes.
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Reality is they will go after the insurance that is in effect and leave it at that because it will be sufficient to cover even the most prized Bull. The insurance covers the "incident", that's everything including the bull. The insurance could come after Jeannie but there's a no Subro clause so they can't.

Then there is the matter that if you hit a ton of bull in a 152 hard enough to kill it, you're likely dead too.;)
 
midlifeflyer said:
I didn't know you were an aviation adjuster.

The aviation policies I've read say in writing whom they cover and whom they don't. And, as you said earlier, you really need to look at (and understand) the individual policy. Unlike auto insurance, which for policy reasons, tends to be fairly uniform, aviation policies are not.

An aside on the "open pilot warranty." What I think a lot of people miss is exactly what it is. It's a promise by the policy-holder to the insurance company that no one will act as PIC of the airplane without certain minimum qualifications. If the policy-holder breaks that promise with respect to a claim, the insurance company doesn't have to pay out. (There may be other policy provisions that change that result, such as "naming" a pilot with the insurer's approval).
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"All Lines" adjuster last time I renewed. I do homeowners, property and marine casualty as well. I never did medical or workmans comp. Did a few liability claims but I didn't do much more than some ground work for higher ups and write the check on those.
 
Henning said:
Reality is they will go after the insurance that is in effect and leave it at that because it will be sufficient to cover even the most prized Bull. The insurance covers the "incident", that's everything including the bull. The insurance could come after Jeannie but there's a no Subro clause so they can't.
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Henning is stating facts without basis and making assumptions not stated. First, even if the loss is not staggering, if a third party is involved, they may well go after everyone involved. The biggest issue is that unless you are a named insured, you have no paid legal defense, and that can run tens of thousands of dollars even if you win. Further, in the "bull" scenario, it would not be easy to prove liability of the aircraft owner who is not piloting the aircraft at the time. No doubt the owner's insurer will spend some of their legal defense money on behalf of the owner trying to shift the blame to the pilot, who is now having the finger pointed by the attorneys for both the plaintiff and the owner -- and that runs up the cost of the pilot's legal defense. Finally, without a "waiver of subrogation" clause, subrogation is entirely possible. Only if there is an explicit "waiver of subrogation" clause is this remedy for the insurer barred.

All in all, Jeanie would be financially unwise to do this without her own non-owned/instructional liability policy.
 
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Right, I'm only talking about what happens, not what is theoretically possible. The only time an insurance company tries to collect "blood from a turnip" is if you p- them off. Otherwise they want the file closed. I can't count how many good subro actions I've submitted to the subro guys in legal just to have them look at it and throw it away, "Not worth pursuing". The have legal departments on staff yes, but they're busy. Unless the person they are subrogating against is insured for it or is wealthy, it's rare on these small (less than $100k) claims to see subro over money because it's a loser for them. They know that unless the figure is trivial (again a waste of their time) you will be driven into bankruptcy and they will have wasted all that time and money. They typically only do that if you p- them off.

That said, I have nothing against non owner policies, but not having one won't keep me from flying.
 
Henning said:
Right, I'm only talking about what happens, not what is theoretically possible. The only time an insurance company tries to collect "blood from a turnip" is if you p- them off. Otherwise they want the file closed. I can't count how many good subro actions I've submitted to the subro guys in legal just to have them look at it and throw it away, "Not worth pursuing". The have legal departments on staff yes, but they're busy. Unless the person they are subrogating against is insured for it or is wealthy, it's rare on these small (less than $100k) claims to see subro over money because it's a loser for them. They know that unless the figure is trivial (again a waste of their time) you will be driven into bankruptcy and they will have wasted all that time and money. They typically only do that if you p- them off.

That said, I have nothing against non owner policies, but not having one won't keep me from flying.
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I guess Henning has no assets to protect, but I suspect Jeanie does. Further, subrogation only involves what the owner's insurer paid to the owner. If the jury finds the pilot negligent, the plaintiff is going to have a finding against the pilot, too, no matter what is collected from the owner's insurer -- and not all states are "joint and several."

Also, whether the owner's insurer subrogates against Jeanie or not, who pays Jeanie's legal bills when the bull owner sues her along with the aircraft owner and everyone else? The most important reason for having non-owned aircraft insurance is not to pay damages to the plaintiff, but to pay a lawyer to defend you. No doubt Henning considers himself competent to act pro se in such matters, but I know I'm not, and I doubt many here are, either. In fact, I'll bet the first thing Skip and Adam and the other "Esquires" on this board would do in such a situation is retain an attorney specializing in this field.
 
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