Aircraft Insurance Basics

Named Insured vs Named Pilot

What is the difference between a “named insured” and a “named pilot”?  Please note that these are not “one and the same”. The named insured is the person – or persons – named in Item #1 of your policy.  This name will appear on the declarations page as Item #1.  The Declarations Page is the first page of your policy and “declares” who the entity is who is protected by the policy their address, the dates of the policy, the aircraft model and N#, the insured value of the aircraft, the liability limits, who the approved pilots are, and the parameters of the “Open Pilot Clause” which allows you to loan your aircraft to other pilots.  (Sometimes, the policy is a “named pilot only” policy and does not allow you to loan out the aircraft to anyone else.) 

The Named Pilot is nearly always the same person named in Item #1.  This will not be the case if Item #1 is a corporation or LLC or a non-pilot.  The policy is written to defend the person or persons named in item #1.  This is why those persons are called “named insureds”.  Named pilots are the pilots authorized to fly the aircraft.  If there is an open clause (such as Private with at least 300 total hours and at least 25 in the make and model) the pilots meeting those parameters are also authorized pilots. 

Most policies extend their coverage to also defend named pilots or pilots meeting the open clause.  Please note that each policy is different and must be read and examined to see how this situation is addressed.  You should refer to “who is protected” in your policy definitions.  An example from one policy reads (abbreviated) The named insured, named pilots, and pilots meeting the Open Pilot Clause are protected/defended under our policy as long as they are permissive users of the aircraft and do not fall within the specific exclusions listed: (For brevity again we have recapped these as) employees, aviation business activities (such as CFI’s, aircraft brokers, mechanics, etc.) student pilots using the aircraft under a rental agreement for which a charge is made, and renter pilots.  The policy from another company reads (abbreviated): the named insured and any person while using the aircraft with the permission of the named insured.  These would include the named pilots as well as the pilots meeting the open clause.  Once again, with this policy excluded are any persons engaged in the manufacture, maintenance, repair, or sale of aircraft, aircraft engines, parts, operation of any airport, hangar, flying schools,  and employees. Individuals who fall in this list of exclusions should be carrying their own insurance. Therefore if anyone feels they are at risk of not being protected in another’s aircraft, it is important that they purchase renter’s/non-owner insurance.  CFI’s especially need to be cognizant of this critical matter.

The companies offering renter’s/non-owner insurance also offer a special policy for the CFI’s which is similar to malpractice for physicians.  The premium is a bit higher, but no CFI should instruct without it.  Your agent can easily obtain such a policy for you.   Sometimes CFI’s wish to be added as additional insureds and in addition be given a waiver of subrogation. (This waiver prevents the insurance company from going after the CFI if the aircraft is damaged during instruction.)  The companies that are willing to do this may agree to do so for a fee around 10% of the premium.  Some of the companies have a list of the larger approved schools which they will add at no charge.  Some companies also add the CFI as additional insured at no charge. Some companies do not wish to do this at all.    Keep in mind that the insurance companies do reserve the right to subrogate against CFI’s and even named pilots if they feel that these individuals were grossly negligent.  This is very rare.  This is why some CFI’s will not instruct in your aircraft without first receiving a Waiver of Subrogation just mentioned above. Remember that not all companies will offer this to the CFI with the argument that he should have his own insurance in place.  What the companies are willing to do differs, so be sure to check with your agent especially if you have been switched to a new company

Related Article: Aircraft Insurance Terms & Myths
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