What is your rental insurance philosophy?

DFH65

DFH65

En-Route
Joined
Jun 29, 2013
Messages
2,609
Display Name
Display name:
DFH65
What would you do in this scenario:

Joe flys Cessna 172 most of the time valued at about 50K maybe a little less. For the sake of this discussion the only assets he has are a home, vehicles and 401K. Total net worth maybe half a million dollars.

Joe's flying is mostly local with typically one passenger on occasion two. Lets say poor Joe has a pretty bad accident the passenger payout at most is going to be $200,000 (probably not enough) and that leaves $800,000 for any damage Joe did on the ground and other things. If the plane is a complete loss it would be covered.

So I guess if Joe flew into a house and it burnt to the ground the $800K would come in handy. If he put it in a field or the trees probably doesn't need anywhere near that much and where Joe flies he would have to try to hit house.

What would you recommend for Joe.

Tell Joe to don't be so selfish and cheap get all the insurance you can buy.

Tell Joe to be reasonable find some middle ground after all the insurance companies are betting you won't mess up.

Tell Joe to go cheap insurance is a suckers bet. He doesn't have much anyway and they probably can't take his house or his retirement so what else can they do? The owners insurance is going to pay something and they probably wont go after Joe anyway.
 
"your rental insurance philosophy"
Understanding Joe is ultimately going to make a decision?
 
I'd tell Joe to work on his off-airport landing technique. The best insurance is prevention. Or abstainance. Wait- that's the one that makes the heart grow fonder.
 
Depends. Is this "Joe" the guy who flew a Pawnee into his ex-wife's house, then casually exited the airplane, went down the stairs, walked out the front door, grabbed the garden hose, and pulled it inside and put the fire out?
 
Lachlan said:
I'd tell Joe to work on his off-airport landing technique. The best insurance is prevention. Or abstainance. Wait- that's the one that makes the heart grow fonder.
Click to expand...

That, I've seen insurance screw folks over left and right, there is a reason many religions view it as a form of gambling.

I'd also need to know where Jo flys, if he's normally low level of the LA basin, that's one thing, if he's more country that different.

What's the condition and MX like on the plane, that's a HUUGE factor.

What's Jos aviation background, TT, IFR, backcountry skills, etc.

Based on the above my answer would range from no insurance to possibly getting some GOOD insurance. There are many companies who don't pay out, remember insurance is looking for reasons NOT to pay by default.
 
DFH65 said:
Cessna 172 most of the time valued at about 50K

Total net worth maybe half a million dollars.

typically one passenger
Click to expand...


The biggest financial risk is not the $50k plane. Not even close. The biggest risk is that Joe kills the passenger, and the passenger's family sues Joe Joe's estate. If possible,Joe should choose a policy with a per-passenger limit as big as Joe's net worth, because that's how big his estate will be.

Joe can improve upon the situation by carrying only passengers who are close relatives, because their estates hopefully won't sue.

The risk of hitting a house is nothing compared to the risk of killing a passenger.
 
Last edited:
NoHeat said:
The biggest risk is that Joe kills the passenger, and the passenger's family sues Joe

The risk of hitting a house is nothing compared to the risk of killing a passenger.
Click to expand...

Ha! The biggest risk is that Joe merely maims the passenger beyond repair. How about a nice burn injury case for you? Yeah, that's much worse then just killing the passenger.
 
They could sue after all anyone can sue for anything. I understand however that it is very difficult to get someone residence and their 401K unless what they have in it is deemed excessive. Which Joe's is not.

The max available is a policy with a limit of $200,000 per passenger and that about doubles the cost compared to $100,000 per passenger if you end up with a burn injury case 100,000 isn't going to do anything. I imagine most of the rest of the policy will be eaten up by lawyers trying to agree to a settlement.

Interestingly enough the Non-owned insurance rates went up about 10% this year over last.
 
How many pilot seriously injure a pax?


I'd wager FAAAAR more folks never injure anyone, you guys say what if something happens? I say what if something DOESNT happen? Because it's way more likely that nothing is going to happen to your pax.
 
I explain to the rental pilot, to the best of my ability, as to why they would want their own insurance. This includes first off explaining to them that our insurance policy (which does cover renting the aircraft) is designed to protect us, not them. From there I explain things that could happen where this basic fact could really hurt them. After that, I make sure to tell them I'm not a lawyer and I definitely cannot fully explain insurance or their risk to them and advise them to talk to an attorney.

I do not verify that my rental pilots have rental insurance nor do I require it. It's my opinion that it's completely their own decision they need to make based on their own financial picture.

Of course, not all of my competitors understand insurance at all and tell rental pilots stupid things. Just because you as the operator have a commercial insurance policy that permits rental and instruction does not mean that the insurance will protect the rental pilot to any degree. In most cases it absolutely will not. My insurance company will be my friend but will not be a friend to my customer.
 
DFH65 said:
What would you do in this scenario:

Joe flys Cessna 172 most of the time valued at about 50K maybe a little less. For the sake of this discussion the only assets he has are a home, vehicles and 401K. Total net worth maybe half a million dollars.

Joe's flying is mostly local with typically one passenger on occasion two. Lets say poor Joe has a pretty bad accident the passenger payout at most is going to be $200,000 (probably not enough) and that leaves $800,000 for any damage Joe did on the ground and other things. If the plane is a complete loss it would be covered.

So I guess if Joe flew into a house and it burnt to the ground the $800K would come in handy. If he put it in a field or the trees probably doesn't need anywhere near that much and where Joe flies he would have to try to hit house.

What would you recommend for Joe.

Tell Joe to don't be so selfish and cheap get all the insurance you can buy.

Tell Joe to be reasonable find some middle ground after all the insurance companies are betting you won't mess up.

Tell Joe to go cheap insurance is a suckers bet. He doesn't have much anyway and they probably can't take his house or his retirement so what else can they do? The owners insurance is going to pay something and they probably wont go after Joe anyway.
Click to expand...

the purpose of insurance is to defer risk one cannot afford or does not wish to take. I'd say if joe doesn't want to lose his 401k (a vehicle and home might be immune to a lawsuit) he should insure himself to cover the value of those assets at risk. that, or place those assets in a trust which might them untouchable.
 
rk911 said:
the purpose of insurance is to defer risk one cannot afford or does not wish to take. I'd say if joe doesn't want to lose his 401k (a vehicle and home might be immune to a lawsuit) he should insure himself to cover the value of those assets at risk. that, or place those assets in a trust which might them untouchable.
Click to expand...
401Ks in most cases are protected from bankruptcy and lawsuits. This was a Supreme Court decision however they left the door open by stating that they are only protected to the point of what is "reasonably necessary" which a judge will decide. This also varies by state some states offer complete protection. I find it hard to believe that anything under a million or so dollars wouldn't be considered reasonably necessary for retirement these days but we live in a weird world. In the state Joe lives there appears to be complete protection for both the employee sponsored retirement accounts and his home up to $150,000 in equity (his house is about that) for a married couple.

The liability is the cheap part anyway. Let's talk hull. Plane is worth the above mentioned 50K. In this case the owner doesn't carry hull insurance.

Does Joe carry full hull insurance just in case?
Does Joe carry say 50-75% figuring there will be some salvage or the lawyer from the owner would settle for that? Assuming Joe could come up with the money if they didn't?

Again comment on your personal philosophy understanding everyone's situation is different.
 
[QUOTE="DFH65, post: 2067875, member: 15923". Let's talk hull. Plane is worth the above mentioned 50K. In this case the owner doesn't carry hull insurance.

Does Joe carry full hull insurance just in case?
Does Joe carry say 50-75% figuring there will be some salvage or the lawyer from the owner would settle for that? Assuming Joe could come up with the money if they didn't?
.[/QUOTE]

$50k is not much hull to insure. It depends on Joe's ability to write a check. Some pilots can write a $50k check at any time, some can't. If he can't, then he needs coverage for the portion he can't pay.

Liability is different.
 
James331 said:
How many pilot seriously injure a pax?

I'd wager FAAAAR more folks never injure anyone, you guys say what if something happens? I say what if something DOESNT happen? Because it's way more likely that nothing is going to happen to your pax.
Click to expand...

Insurance is exactly for the stuff that almost never happens. If it's for something that's going to happen it's just called "buying stuff".
 
Still gotta look at the odds, God knows the insurance scammer industry does.

Heavy Winter time I don't fly, my plane is in a metal box, on a secured airport, with full ARFF.

Do I keep insurance on it, heck no, I'd have a better possible ROI taking those premiums and just playing black jack.

When I first bought my plane, she was new to me and I was new in the type, I also had just bought my home where I would be landing the plane and keeping it for a few days at a time, to the best of my knowledge no one had ever landed here before.

Did I buy insurance for that first year, you bet your arse I did, a very good policy too!

Now that it's flying season again and I've got some time in the plane, got some landings at the house, it's going to be a mixture of the two extremes.

It's just like gambling and playing the odds, you got quite a few cards on the table, do you take another hit?

You're only showing 9 and the dealer had 16, you take a hit?


Same stuff.
 
It is interesting that we drive our cars everyday most people with the minimum required insurance of 25/50/10 (or so). Think nothing of it understanding if you have a problem in a plane the outcome is likely to be worse.
 
If you don't have a couple hundred a year for insurance maybe you can't afford to fly. People carrying the "state minimum" auto insurance are going to be in for a rude awakening when they rear-end a new SL550.
 
You must log in or register to reply here.
Back
Top