Renting a friends plane?

[AdamZ]

What is required for a pilot to rent his/her plane to friends? Lets say an owner has a plane he does not fly a lot. He is interested in letting two of his friends fly the plane for an hourly fee.
Of course he will need the Insurance companies blessing. I assume they will have to be named insureds on his/her policy. But will he/she have to comply with any specific FAA rules, inspection rules etc.
If someone is listed as a named insured on the owners policy can the carrier come after them if they ding the plane? Will they still need additional renters insurance or is being a named insured enough? Thanks !

 

[Ed Guthrie]

What is required for a pilot to rent his/her plane to friends? Lets say an owner has a plane he does not fly a lot. He is interested in letting two of his friends fly the plane for an hourly fee.
Of course he will need the Insurance companies blessing. I assume they will have to be named insureds on his/her policy. But will he/she have to comply with any specific FAA rules, inspection rules etc.
If someone is listed as a named insured on the owners policy can the carrier come after them if they ding the plane? Will they still need additional renters insurance or is being a named insured enough? Thanks !

1. No FAA requirements above and beyond the usual for part 91.
2. "Named insured" means the renter shares coverage up to the policy limit as well as dispersement approval with the owner. Any person (pilot or otherwise) who is a "named insured" is effectively an insured entity. The owner is crazy if this is indeed how the policy reads (renter pilot is named insured).
3. "Named pilot" means the pilot is an approved pilot. IOW, the policy is in effect if a named pilot is at the controls (subject to #8 below).
4. "Open pilot warrant" means the policy is in effect if the pilot meets the minimum experience & certificate requirements stated (subject to #8 below).
5. A "named insured" is protected by the policy if either a "named pilot" or pilot meeting the "open pilot warranty" is flying the plane.
6. The "named pilot" or a pilot meeting the "open pilot warranty" is/are on their own with respect to personal liability.
7. Tell the renters to purchase a non-owned aircraft policy.
8. The policy may or may not exclude rental operations. Read carefully.

 

[EdFred]

#1 Make sure you are insured.
#2 You DO NOT RENT it from your friend. If you happen to leave an gift of an appropriate (cash) amount, that's the best way. Don't think the IRS won't hit him for income tax if he "rents" it to you. I, whenever possible ,always pay anyone I consider a friend with in cash.

 

[Bill]

Ed's top 8 deleted

Ed, as I understand it, if I were the renter, and were anything but named insured on the policy, I would be subject to subrogation if I were to ding the aircraft, correct?

And, as you said, an owner would have to be crazy to put a non-owner on his policy as named insured, so I guess a renters/non-owned aircraft policy with hull value sufficient to cover the aircraft would be the only way to go.

 

[Steve]

The policy on my IAR has no "open pilot" clause. In order to get checked out in it (for insurance purposes) I added a couple of CFIs as "named insured" to cover them until I was insurable as PIC. I suspect even being listed on the policy would not stop any litigation by an injured third party.

Ed, as I understand it, if I were the renter, and were anything but named insured on the policy, I would be subject to subrogation if I were to ding the aircraft, correct?

And, as you said, an owner would have to be crazy to put a non-owner on his policy as named insured, so I guess a renters/non-owned aircraft policy with hull value sufficient to cover the aircraft would be the only way to go.

 

[poadeleted20]

Ed, as I understand it, if I were the renter, and were anything but named insured on the policy, I would be subject to subrogation if I were to ding the aircraft, correct?

Not Ed, but that is correct unless the policy has a "waiver of subrogation" clause, which most don't and usually costs extra. And, of course, that is in addition to any liability to third parties injured as a result (e.g., passengers, people on the ground, etc).

And, as you said, an owner would have to be crazy to put a non-owner on his policy as named insured, so I guess a renters/non-owned aircraft policy with hull value sufficient to cover the aircraft would be the only way to go.

Maybe not the only way to go, but certainly the financially safest for both renter and owner.

The policy on my IAR has no "open pilot" clause. In order to get checked out in it (for insurance purposes) I added a couple of CFIs as "named insured" to cover them until I was insurable as PIC. I suspect even being listed on the policy would not stop any litigation by an injured third party.

Nothing can stop litigation by an injured third party, but proper insurance can help you deal with it without losing your assets.

 

[Henning]

1. No FAA requirements above and beyond the usual for part 91.
2. "Named insured" means the renter shares coverage up to the policy limit as well as dispersement approval with the owner. Any person (pilot or otherwise) who is a "named insured" is effectively an insured entity. The owner is crazy if this is indeed how the policy reads (renter pilot is named insured).
3. "Named pilot" means the pilot is an approved pilot. IOW, the policy is in effect if a named pilot is at the controls (subject to #8 below).
4. "Open pilot warrant" means the policy is in effect if the pilot meets the minimum experience & certificate requirements stated (subject to #8 below).
5. A "named insured" is protected by the policy if either a "named pilot" or pilot meeting the "open pilot warranty" is flying the plane.
6. The "named pilot" or a pilot meeting the "open pilot warranty" is/are on their own with respect to personal liability.
7. Tell the renters to purchase a non-owned aircraft policy.
8. The policy may or may not exclude rental operations. Read carefully.

Exactly. If you are renting from this guy at a good rate, expect to have to carry a non owners liability policy or you may check your homeowners policy if you have one, especially a Deluxe, Delux Plus or H.O.3. It may cover your personal liability off premisis. Look on your Dec page and see if you have any "XX" coverage, and see in the policy what it excludes. Some states are pretty permissive with this one, it's amazing what the states write into this.