Little question on buying a block rate, but mainly just excitement

bigred177

bigred177

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bigred
While I was hanging out at KGTU today, I started shooting the bull with one of the flight school owners about how much better low wings are than high wings :aureola: and he started telling me about a guy who has a Cherokee 180 for sale. We went to go talk to him and ended up working out a better deal than I could have imagined. He works for an A&P-IA, is very busy with work/life, and has not had a chance to fly his plane much. He doesn't like sitting there watching it rot but doesn't REALLY want to sell it. So we talked for awhile about it and came up with a block rate I could buy from him so his plane flies and I don't have to own it. We agreed to $45/hr dry, after working the numbers, I don't think I could operate one for less than that even owning it.
The plane has about 900 hrs on the engine and just came out of annual 2 months ago. It sits in a tie down so it's a little weathered but a nice looking plane.
I am pretty sure I am going to start out buying 10 hrs or so, but I was thinking I'd get y'all's opinion on all of it. He is calling his insurance company tomorrow to see about getting me on as an insured, but is there anything I need to do to protect both of us?
 
You might consider non-owned (renter) aircraft insurance to cover yourself should you do something to the plane and the insurance company decides to subrogate. Depending on how he "gets you on as an insured", it will probably protect his interest in the plane, but won't protect you.

If you're only looking at 10 hours at a time, you don't have too much skin in the game. If you're buying larger chunks, as you may later (because it sounds like a great deal!), make sure it's spelled out how you log the time (Hobbes or tach? where is the in/out time written?) and what the procedures are for early termination (he sells the plane while you have unused hours, you move out of state, etc.) and how you negotiate for the plane when you both want it (hint: it's his plane! :))
 
It could be awesome... but yes, get it all in writing, and either get your own insurance or have him add you to his policy.

Don't forget hull coverage... if he is not insuring against damage to the aircraft itself, you might have to take responsibility for that.
 
Sounds like a great deal; as regards in surance, Grant's cautionary note is well-advised.

If you are genuinely added as an additional insured (not difficult to do), then you'll be protected and the carrier cannot subrogate against you. Beware of mere assurances that you "meet the open pilot warranty" or the like;unless you see an "additional insured endorsement," presume the insurance does not protect you.
 
This is a typical non-equity type arrangement. I have one with another member here on the POA in a C172. I have a dry rate similar to what you have posted, and I maintain the fuel level after each flight that I make. I have my own set of keys to the plane, which allows me so much freedom compared to a rental line. I didn't 'buy' block time upfront, but since I am in a longer term commitment, we negotiated a minimum number of hours per year, and I would just pay as I flew each month.

I have been named pilot on their insurance policy, and I paid the premium difference to be added as named pilot. (small $) Note, that does not insure me, only helps protect them in their insurance agreements of the LLC. Since I was not buying equity ownership in the LLC, insurance wasn't giving me 'named insured' by the LLC insurance. I then have my own renters insurance with an agreed upon Hull coverage and Liability, which I already had and needed to maintain if I rented from the flight school anyway.

We keep a log in the plane which records tach time, hobb time, fuel before flight, fuel after flight. At the end of each month, I tally my time and copy the sheet, sending it with payment to the owner. We also have a page for maintenence squalks, VOR Checks, and W&B in this binder.

For scheduling, maybe it's a simple phone call, but that could be bothersome after a while to him if you are flying more regularly with this access to a plane. We have a yahoo calendar, which we can log onto from anywhere with internet and sign the plane out on the calendar. Easy to view for each person, and without calling back and forth all the time.

Finding an arrangement like this allows you to build more time in a regular plane, and if he doesn't fly often, works out great for you. Personality of the arrangement is also quite important, so if you both get along well, you are already ahead of the game. Soon, you'll find you are taking care of it like it is your own baby,.. cause even though your name isn't on the title, it's your butt in the seat.

Good Luck, It's a blast!
 
SCCutler said:
If you are genuinely added as an additional insured (not difficult to do), then you'll be protected and the carrier cannot subrogate against you.
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Just make sure it is named INSURED and not named PILOT. There is a difference.

Don't ask me how I know.
 
Also be aware that insurance companies are accustomed to adding named pilots to policies, and do it without much fuss if you meet the smell test. Adding additional insureds, however are a different story, so be prepared for more pushback from the carrier before you get it done.
Greg Bockelman said:
Just make sure it is named INSURED and not named PILOT. There is a difference.

Don't ask me how I know.
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Thanks everyone for your replies. They are extremely helpful.
At ~80 hrs, with 60 in type, do you think the insurance company will make too big of an issue about being a named insured? If they do, would it be better to just be a named pilot and then get my own non-owner policy through AOPA or the like? If so, how much are those usually? I've never dealt with that before.
 
bigred177 said:
At ~80 hrs, with 60 in type, do you think the insurance company will make too big of an issue about being a named insured?
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Are we talking about a Cherokee 180? I wouldn't think so.

If they do, would it be better to just be a named pilot and then get my own non-owner policy through AOPA or the like?
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Well, that would be YOUR policy and in some ways may provide you better piece of mind.

If so, how much are those usually? I've never dealt with that before.
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I can't really answer that question. It depends on how much hull value you want to purchase. IOW, how much coverage you want. Seems like a ball park figure is $100 a year but I just don't know.
 
You can get prices for non-owner insurance at AOPA and Avemco websites. It depends on liability and hull limits.
 
Greg Bockelman said:
Are we talking about a Cherokee 180? I wouldn't think so.



Well, that would be YOUR policy and in some ways may provide you better piece of mind.



I can't really answer that question. It depends on how much hull value you want to purchase. IOW, how much coverage you want. Seems like a ball park figure is $100 a year but I just don't know.
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Much much more if you're also opting for hull coverage.

http://www.aopaia.com/popuprates_renter.cfm
 
bigred177 said:
Man. Well I sure hope I can just get on his insurance as an insured.
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That would obviously be your best bet. Remember, however, that you'd likely have these same insurance problems with whatever you're renting. If you busted up their plane the insurance company would pay for the plane to be fixed and then go after you for their losses (unless the FBO had a no subrogation policy). Being a named pilot in a non-equity deal like this pretty much puts you in that same situation. Non-owner insurance and/or being a named insured eliminates the risk of subrogation.
 
bigred177 said:
Man. Well I sure hope I can just get on his insurance as an insured.
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Even if you get status as named insured make sure you can cover the deductible. An inexpensive renters policy (as mentioned above) may help with that.
 
Ok, I talked to the insurance guy today. The insurance is through Falcon, when I asked him about the named insured vs named pilot he told me the only difference is that the named insured is the actual owner, and named pilot is everyone else. He told me coverage applies to the named pilots the same as the named insured. The only time they would subrogate against me is if they believed I intentionally damaged the plane.

I asked him if that was in writing anywhere and he is calling the underwriter to see if it is referenced anywhere in there.

Just thought I would see y'alls thoughts on this.

It would be $200 to become a named pilot for the coverage they say above.
 
If the $200 includes the waiver of subrogation, it will almost certainly be cheaper than a comparable non-owned policy and provide better protection.

You will want that subrogation waiver bit in writing of course. :D
 
Haha yea, that's what I'm waiting to hear back on at the moment. The cheapest I could do the non-owner for was almost $400 for the right coverage.
 
Something I do when I borrow an airplane from someone for a period of time, is to pay for an increase in their hull coverage of $10,000 or more. I pay this premium increase out of pocket. This provides 3 things:

1. It covers the deductible if you total the aircraft.

2. It gives you significant cash and prizes to hand the owner whose aircraft you just totalled, which may save you from a nut-punching you otherwise deserved.

3. It prevents a heated argument, in case the person you borrowed the plane from was foolish in under-insuring his plane AND lending it to you, who then totalled it. :D

Might be worth the extra few bones. I find that it is, but then, I like to keep the friends who loan me planes, and it indicates to them your willingness to have some skin in the game.

$0.02

- Mike
 
schmookeeg said:
If the $200 includes the waiver of subrogation, it will almost certainly be cheaper than a comparable non-owned policy and provide better protection.

You will want that subrogation waiver bit in writing of course. :D
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+1000
 
I'm really learning a lot reading this thread. I am close to getting my cert, and am concerned about being able to fly afterwards, with daily minimums at my FBO that make a even weekend trip too prohibitive. How would I go about finding an arrangement like what has been discussed here?
 
Alright, so after talking with the agent again, he said that the underwriters don't usually grant a waiver of subrogation unless its like a CFI getting named on the policy for flight instruction. He then told me that I was covered under the policy from the definition of "insured" in the policy which I have attached. I specifically asked him about purchasing non-owner protection and he said for this aircraft no, I am covered.

I then called a different agent for Falcon and asked his opinion on the waiver and he told me the same thing. Also, that the named insured only deals with the owner. He said that the only reason the insurance would subrogate was if they found me to be negligent and they want to keep that right by not giving me a waiver. This agent then recommended getting a non-owner policy to cover myself. :mad2:

So it sounds like I either need to be a partial owner in the plane to be a named insured, or buy non-owner coverage. Which at $200 to be a named pilot and the at least $300-$400 for a non-owner policy, this is getting spendy.
 

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If you meet the owner's "Open Pilot Warranty", then the $200 is not necessary. What IS necessary is the non-owner coverage, since a subrogation waiver is not being offered.

For every NTSB report that you read which ends in "Pilot Error", that is a potential subrogation lawsuit by the insurance company against the pilot for the full value of all damages, both hull and liability, as well as legal fees.

I'm sure that in practice, these subrogation suits do not get pressed very often because the amounts are less than the cost of the lawyer, or the defendant has no real assets to pursue -- but the option is very real, and a lawsuit judgement lasts a VERY long time.

So I would start thinking in the $500-$800/yr non-owners policy range. (I don't know how much hull this plane is worth) This will give you coverage on any plane which you meet the Open Pilot Warranty on, anywhere, and is coverage for you and your actions alone (damage from mechanical failures are still covered by the owner's policy -- so make sure he has one).

At a minimum, I would get the hull value of the aircraft covered in full by the policy, and then pick a reasonable liability amount -- enough to cover that proverbial busload of nuns.

$0.02
 
Thanks, I'm pretty sure I don't meet the open pilot warranty. I only have about 75hrs and 60 in a Pa-28.

The owner has it insured for $25,000 and that is his asking price for it should it sell. With an AOPA non-owner policy, it looks like $237/mo for hull and $80 for $25,000 per pax and $250,000 per incident, or $108 for $50,000 per pax and $500,000 per incident. They don't have an option for $25,000 hull coverage. So, $317-$345 to go through AOPA. Maybe someone else is cheaper? I don't know the aviation insurance companies. So around $600 to have the ability to pay him to fly his plane around.
 
If you don't meet his open pilot warranty, the $200 is the friendship fee to add you as an allowed pilot to his policy, and you'll want to do this. (this allows the mechanical coverage for your flying the plane)

I believe avemco and aopa are the only two games in town for non-owner coverage, and their prices are mirror images of one another. You may be able to call them and get the $25,000 hull value even if it is not quoted on their website.

Seems like a deal to me -- assuming you're planning to fly more than 15 or 20 hours yearly. The good news is, once you get some time, the $200 part will probably become unnecessary :D Way less restrictive than an FBO or even club arrangement.
 
You're looking at this all wrong. Whatever it costs you in extra insurance is much less than if you were purchasing a plane, or even part of a plane. The extra insurance cost you are looking at is only 4 or 5 hours worth of rental, right?

Do you have access to half the amount he's asking? Maybe you could become a partner, then everything would be split down the middle... Insurance, top, annual, etc., etc., etc.
 
Right, which is why I'm pumped and going to do it. But my amazing deal is now just a good deal :sad: :lol:. What is a typical amount of time to become an open pilot on an insurance policy?
 
wpierce said:
You're looking at this all wrong. Whatever it costs you in extra insurance is much less than if you were purchasing a plane, or even part of a plane. The extra insurance cost you are looking at is only 4 or 5 hours worth of rental, right?

Do you have access to half the amount he's asking? Maybe you could become a partner, then everything would be split down the middle... Insurance, top, annual, etc., etc., etc.
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I would love to do this. Unfortunately, I'm leaving for school for three more years and won't be in town much. So I don't want to have funds tied up when I'm not around to enjoy them. I plan on it with him or someone else though the second I get back.
 
bigred177 said:
Right, which is why I'm pumped and going to do it. But my amazing deal is now just a good deal :sad: :lol:. What is a typical amount of time to become an open pilot on an insurance policy?
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For a Cherokee 180? I'd expect something like 100-250 total time / 5-25 make/model at the worst, but who knows, they may be clamping down on the Open Pilot qualifications.

I've also seen simply "any holder of a private license", in the case of low-time owners. I think it depends on how much the owner has squeezed out of his policy in the pursuit of a low premium.

Most policies for common GA planes already have an "Open Pilot Warranty", and the owner of the Cherokee can give you details about that for this specific plane -- so you'll know what target to aim for at his renewal.
 
Does anyone have any experience with AOPA, Falcon, or Avemco for their non-owner policies? Looks like these are my options.
 
Also, I have decided to go ahead and do it. So any of you guys who are in a similar situation or a partnership who have a contract they wouldn't mind sharing with me it would be greatly appreciated. And any other helpful advice/pointers y'all have :). The advice on here is very good, I need all I can get.
 
Well it's done!!! We got everything worked out today and got me a set of keys! We were going to try to go fly but as you can see in the pic the weather wasn't exactly VFR. We did do some taxiing around and runups just to get here woken back up. It's been a solid two months since she's flown. Going to try and put some time on her this week and hoping I can go on a nice little XC this weekend. :) More pics to come when the weather is better. And the other two wheel pants are going back on Wed. for those who were wondering.


CIMG0023.jpg
 
Nice looking Cherokee. I hope you enjoy flying her.

You might want to check the nose strut inflation spec. It looks just a little over inflated. It'll make night ops just a bit more challenging with that condition since the light will be pointing mostly at the stars...
 
We're working with the struts right now. They're angry from sitting. We had to play with them and are keeping an eye on the back ones. The front comes down when you start moving, but with no one in the front and my big butt stepping on the step in the back it comes back up.
 
P.S. Thanks to everyone here for your advice in helping me get this put together.
 
schmookeeg said:
For a Cherokee 180? I'd expect something like 100-250 total time / 5-25 make/model at the worst, but who knows, they may be clamping down on the Open Pilot qualifications.

Most policies for common GA planes already have an "Open Pilot Warranty", and the owner of the Cherokee can give you details about that for this specific plane -- so you'll know what target to aim for at his renewal.
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I looked through the policy today, they want a MINIMUM of 300 hrs. Which I think is a little bit of a reach for me at 75 hrs to get that by the renewal in June. He said he was going to do some shopping around when he renews again so maybe I can get him to get a lower time on the open pilot deal.
 
So what kind of policy did you end up going with? I may be finding myself in a similar situation this summer.
 
I went through Avemco and did liability and $25k hull coverage on a non-owners policy. Plus paying the difference to be added as a pilot on his insurance.
 
Gotcha. I've lived a sheltered aviation life. All of my time has been in USAF Aero Club airplanes where one does not need insurance to rent. A good idea to have it, but not required. That is about to change for me in the next few months. I'm gonna poke around the locals airports hoping to fall into a deal as sweet as yours seems to be.

With that said, anybody looking for a non-equity partner based in the DC area? Anybody????
 
I wish you luck. It takes a long time. I've been actively looking for better than about 7 months and finally found this one.
You might try the guys that have theirs posted for sale in the FBO. Someone my not want to sell it but has to cause he can't keep it on his own. So you may be able to come in and help out. Never hurts to ask.
 
Glad to see it worked out,... get used to flying her, then go on some adventures with the freedom it provides. Congratulations. :yesnod:
 
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