Aircraft Insurance Terms & Myths
We wrote about some terms that are often misunderstood about aircraft insurance, namely the difference between a "Named Insured and a Named Pilot." As a follow to that, we will cover some more aircraft insurance terms and myths that deserve clarification.
Make and Model hours - Myth – All hours in the same type such as single engine fixed wing would count as make and model. Truth – The hours have to be in the exact model such as AA-5 or AA-1. AA-5 time does not count for AA-1 time. Cessna 182 time does not count for Cessna 150 time even though the first aircraft is more complex. The insurance companies want to make sure that if a pilot does not have time in the specific model he is insuring that he will not only be rated appropriately, but receive a check out prior to solo. By stating that one has lots of make and model time when in fact they either have none at all or just a few, could void the insurance contract.
Grace Period – Myth – Your policy will still be good for another 10 – 30 days after expiration if you forget to renew it. Truth – There is no grace period with any of the policies. They expire on the date they say they do. If your agent has not heard from you regarding your wish to renew, he will not renew the policy unless he knows you pretty well and has insured you for some time in which case, he may take it upon himself to just renew your policy himself. Hopefully his client will be in agreement to renew once he hears from him since the agent is on the line for your premium. That is why agents do not renew policies unless they receive confirmation from their clients.
Naming owners as pilots – Myth – If several owners own an aircraft, and they are all pilots, some can be dropped as pilots to enhance the premium or make room for other pilots to be named. Truth – All owners of an aircraft must be listed as pilots unless they are non-pilots (either because they do not have a license or because they are out of medical). It is the belief of the insurance companies that if an owner is a pilot, he will hop into that aircraft and fly it whether he is a named pilot or not. An owner cannot choose not to be listed just to make room for someone else or to make sure that the open clause is not deleted which it will be if too many pilots are named. (When a policy reflects four or five named pilots, the insurance companies delete the open clause otherwise the policy would be covering somewhat of a “flying club”. ) The only way an owner could be omitted from the list of named pilots is to make him an excluded pilot. This will clearly not allow him to fly the aircraft at any time, and thereby leaving a space for another pilot. Sometimes pilots own more than one aircraft but do not wish to fly some of them. By being definitely excluded on the policies for the aircraft they will not be flying, the premiums can be adjusted accordingly, and there will be room for other pilots.