Title insurance

Discussion in 'Flight Following' started by texasag93, Nov 14, 2017.

  1. texasag93

    texasag93 Line Up and Wait

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    What should I take into consideration for buying title insurance on an airplane?

    I am told to by my insurance agent.

    I am told that it probably is not necessary by my broker.

    Any opinions in the POA braintrust?
     
  2. wrbix

    wrbix Pattern Altitude

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    Told to buy insurance by your insurance agent - imagine.

    Get ye to a new insurance agent.
     
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  3. texasag93

    texasag93 Line Up and Wait

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    He is not the one selling it.
     
  4. Let'sgoflying!

    Let'sgoflying! Touchdown! Greaser!

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    I have never heard of this for small a/c.
     
  5. simtech

    simtech Pattern Altitude

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    No, but his brother in law is.
     
  6. brien23

    brien23 Cleared for Takeoff

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    I bought a plane with a lean on it that was so old the bank no longer existed and the bank that bought that bank had no records of the loan. It was a lean that could not be removed. He the seller tried to have the new bank send a letter that they had no claim to the aircraft the FAA would not except that and the lean stays. The seller of the plane offered to pay for a title insurance policy so we bought the plane. That was over 20 years ago, what price is peace of mind worth.
     
  7. midlifeflyer

    midlifeflyer Final Approach

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    Thankfully, undischarged liens are not common but they are not unusual either. I've seen a few posts about them very recently. It probably could have been removed but insuring the title over it was likely easier and cheaper.
     
  8. midlifeflyer

    midlifeflyer Final Approach

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    Tell him to have his brother in law pay for it.

    Seriously, title insurance for light, relatively inexpensive, aircraft is a pretty controversial topic. Even some lenders don't require it, choosing instead to rely on a title company's title report (even though not guaranteed) that there are no undischarged interests in the FAA record. In situations like @brien23, where they found something old, it might be a good idea, but the seller should be paying for it. I'd never dissuade someone from paying for it, but it really is an individual risk of a problem vs the cost of peace of mind evaluation.
     
  9. Let'sgoflying!

    Let'sgoflying! Touchdown! Greaser!

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    An insurance co would cover the risk posed by an unreleased lien? Surprised.
     
  10. James331

    James331 Touchdown! Greaser!

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    God, we're living in a society to scared of everything, between the media blasting us with basically saying there are terrorists/nazis/gunmen/whatever around every corner, people going on webmd and thinking they are going to die, TSA and other security theatre around every corner, it's no wonder people feel they need to insure ever tiny facit of their life.

    No, you don't need "title insurance"

    Save your money.

    Want "title insurance" go buy the $5 FAA records CD and look at the title history for yourself, if you can pass a FAA written you should have the mental firepower to look at the PDF yourself.
     
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  11. midlifeflyer

    midlifeflyer Final Approach

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    It’s done. Even in real estate title insurance. Depends on the lien. Not all are created equal. For example, current enforceability may be so questionable there is very little risk associated with ignoring it. A buyer might not be willing to take that risk but an insurer might find it quite acceptable.
     
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  12. idahoflier

    idahoflier Pre-takeoff checklist

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    I purchased an aircraft last summer and while I didn't look hard I couldn't find a company selling a light aircraft title insurance. I did use an escrow service and they included the $5 title search...
     
  13. AggieMike88

    AggieMike88 Touchdown! Greaser!

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    Now offering reverse discounts.
    Wouldn't one of the title companies, such as Aero-Space Reports, Inc. in OKC, provide some form of fiduciary assurance that no surprises or hiccups will occur?
     
  14. idahoflier

    idahoflier Pre-takeoff checklist

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    I used Aero-Space Reports and they didn’t have a title insurance product available for a C172.
     
  15. brien23

    brien23 Cleared for Takeoff

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    I found a PA-23 for parts at a local airport and made a offer, sent for the CD found outstanding loan on it. Called the loan company found that they wanted to come get the aircraft as the only payment was the first one and nothing after that. I told them that the aircraft had no engines and missing lots of things they were willing to sell me the loan for 5 cents on the dollar. Told the person we were going to buy it from about the existing loan. The plane disappeared from the airport and he the seller never returned any of my calls. Title search you can do it yourself if you miss something it's on you if you pay for the service and they miss something you might have some recourse, title insurance peace of mind.
     
  16. Lindberg

    Lindberg Pattern Altitude

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    You can insure anything, even risks that are 100% likely to occur. The insurance company will price the premiums accordingly.
     
  17. brien23

    brien23 Cleared for Takeoff

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    Only a fool would buy a aircraft for tens of thousands of dollars without a title search. Should you have a title search company do the search you may have some recourse if they miss something if you do it yourself it's on you. I doubt you bought your plane without a title search or are you of the latter.
     
  18. texasag93

    texasag93 Line Up and Wait

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    The escrow company did a title search. The airplane had one lein on it and it was paid off when the escrow was transferred. The same person owned it for the last 19 years.

    I did not get the title insurance.
     
  19. brien23

    brien23 Cleared for Takeoff

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    Title insurance is good if you find something in the title search that could affect you down the road. If you had a title search done and it came back clean then I would not buy the insurance, it's your call to buy it or not. If some shop puts a lean on the aircraft, I have known an IA that did that knowing the person that ran up a 5K bill was selling it and sent the lean in. You can always go after the person who sold the plane to you as not telling you about any outstanding debt. I almost bought a Hiller that a dealer sold the guy, I was buying it from. He thought everything was fine till I did the title search that came back with a loan to the dealer on the helicopter that was never clear and still their. This stuff happens and when it's 20 years old trying to make things right sometimes takes a lot of work if they can ever be set right. Just a note if you buy a plane from Canada good luck on their system of loans tied to aircraft.
     
  20. James331

    James331 Touchdown! Greaser!

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    I bought a aircraft with another zero on the end of that, and I did a title search, I ordered the CD and went over it, found a couple, got them cleared.

    Again if you have the mental firepower to find enough money to buy a plane and become a pilot, you should be smart enough to be able to flip through a PDF

    Do you also get weight and balance insurance? What if you miss something

    What about writing a check insurance, what if you mess up and accidentally make a $5 check out for $250,000?

    I mean the insure everything under the sun concept just gets silly after while right??
     
    Last edited: Nov 16, 2017
  21. brien23

    brien23 Cleared for Takeoff

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    So you paid $5. for the CD and did the title search yourself. Just what part of only a fool would not search the title, pay for it to be done or do it yourself it is still a title search. My point was that if a title search company missed something you might have recourse against them as if you do it yourself you have none. My example was a loan over 20 years old from a bank that was bought out several times and a chain of ownership was in the CD with a release from the last bank. Problem was they the last bank had no record of the loan and only released all interest in the loan. The FAA registration would not except that,, as any one of the banks could have sold the loan, and it could still have been out their. Title insurance would have somewhat protected me from someone showing up and trying to repo the plane. Some people would have seen the release from the bank and assumed the loan was paid off, I am just saying you might be a legal eagle and able to catch something like that most people are not. Hope you did not miss something and the Airplane Repo people show up and your plane is on the next tv show of Airplane Repo.
     
    Last edited: Nov 19, 2017
  22. brien23

    brien23 Cleared for Takeoff

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    Unfortunately, situations also arise in which the seller’s actions are intentional and result in the aircraft buyer not receiving title to the aircraft. If the seller forges the bill of sale or if the aircraft is subject to judicial proceedings (such as bankruptcy, receivership, probate, conservatorship or dissolution of marriage), and the court has not authorized the sale. Title insurance, the bottom line is that you as an aircraft buyer need to proceed with caution and perform due diligence when purchasing an aircraft. Although this may seem like added cost in the short term, in the long run these steps can save you the large expense, and possible loss of your aircraft, that can result from title defects or third-party claims against your aircraft.
     
    Last edited: Nov 19, 2017
  23. SCCutler

    SCCutler Administrator Management Council Member

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    Don't be. Properly underwritten, its free money for the title insurer.