Lets start by explaining how aircraft insurance typically works for a pilot who usually rents aircraft. One of the most overlooked, but most important aspects of renting an aircraft from a commercial flight school or aircraft rental operator are the pilot’s protections or more importantly exposure in regards to the aircraft’s insurance policy.
Aircraft insurance provides coverage for two areas. Damage to the aircraft (hull) and other property, and liability coverage for the insured party (the person or person’s who are the named insured on the policy).
Another area of importance to an aircraft renter is the deductible. These are usually broken down into “non-motion” and “motion”. This is the amount the aircraft renter must pay before the insurance company pays anything.
This is an area where many commercial flight schools and aircraft rental operations will save money. The larger deductibles shift more of the exposure from the flight school/operator and insurance company to the aircraft renter. It’s common for deductibles to be in the $5,000 or higher range at many flight schools and rental operations.
The biggest area of concern however, when it comes to aircraft insurance for an aircraft renter is “subrogation”. This allows the insurance company, “to substitute (one person) for another with reference to a claim or right”. In other words, whomever is responsible for the damage to the aircraft and other property can be sued by the insurance company to recover their loss unless you are the insured party (i.e. the commercial flight school, rental operator, or owner)
To summarize, if you are an aircraft renter involved in an aircraft incident/accident and, as the pilot, you are deemed at fault, the insurance company can and will sue you to recover the funds they paid out for the cost to repair the aircraft and any funds that were paid out for a liability claim. This is why when you rent an aircraft from a commercial flight school or rental operation you would need to purchase renter’s insurance to cover you should you be subrogated against. Remember, it is the aircraft owner that is the insured party, not you the aircraft renter.
However, if you are a member of a flying club and you are one of multiple members who are all owners of the aircraft in your club then you are the insured party, or what is called the named insured. This is the case at the Sleeping Giant Flying Club. All of our members are owners and therefore the insured party, because they are all members of record.
Therefore, if there is an insurance claim for damage and/or a liability claim (i.e. personal injury law suit) our insurance company will not only pay for the claim and the defense in court, but they also cannot “subrogate” or sue you, because your are one of the aircraft owners and listed as the named insured.
Thus you do not need to obtain a renters insurance policy because you are not a renter and as such you are barred from any subrogation by the insurance company – you are their policy holder. This is a huge advantage in the area of financial exposure.
Your exposure is only limited to the deductible. Our deductible, at the time of writing this, is $200 ($300 for N8019L) for a non-motion claim and $200 ($300 for N8019L) for a motion claim. If there is a claim, our Board of Directors will review the incident and determine what percent of fault is the member's -- if any -- and may assess them for that percentage of the deductible.(Deductible may change without notice. The amount listed on this web page may or may not be current)
NOTE: The exposure limitation shown above assumes the club member did not violate any By-law or operating rule of the club or FAR's. If damage occurs to a club airplane while the member is operating outside of the clubs governing rules/laws or FAR's, the member may be subject to additional or all repair charges.
To most pilots, who typically rent aircraft, the added cost of the renters insurance far exceed's the cost of the monthly membership dues in our club. Our monthly dues not only help provide this far superior insurance coverage, but also clean aircraft, housed in hangars next to our office and maintained by our dedicated “in-house” maintenance staff to name a few.