The Real Cost of Aircraft Insurance - Pilot Institute

Finding the right airplane insurance is a confusing process that causes headaches. aircraft insurance quotes are confusing at best and misleading at worst.

Insurance for a small aircraft will cost around $1,500 to $2,000 per year, but the amount of coverage and cost will vary significantly depending on the type of policy, aircraft, flight, and pilot.

Reading: How much is plane insurance

To simplify the aircraft insurance process and avoid being caught off guard by expensive premiums, this article will explain the true cost of aircraft insurance and give you the knowledge to shop with confidence.

what is plane insurance?

Unlike auto insurance, there are no federal or state regulations requiring aircraft insurance. however, this does not mean that you should not obtain aircraft insurance.

Aircraft insurance is a general term used to refer to any insurance policy related to an aircraft, including property related to the use of the aircraft, such as hangars or airports. aircraft insurance policies will cover some or all of the costs associated with an accident. this includes damage to the aircraft itself, injury to passengers, and property damage.

also, fixed base operators (fbos) and some airports require you to have aircraft insurance to use their facilities.

which planes can be insured?

While certain aircraft insurance companies will only insure certain types of aircraft, you should be able to find a company willing to insure almost any type of aircraft.

The following are examples of aircraft most commonly insured by aircraft insurance companies:

single and multi-engine aircraft
helicopters
jet aircraft (turbine)
seaplanes
drone
homemade planes
experimental aircraft

types of aircraft insurance

renters insurance

An aircraft owner’s insurance policy, such as those purchased by rental facilities or flight schools, will not cover any damage you may cause by renting an aircraft from them and therefore you will be responsible for any associated costs with an accident.

so, if you don’t own and are instead leasing the aircraft you want to fly, you’ll need to purchase non-owned aircraft insurance, also known as renter’s insurance.

for example:

You are a student pilot taking flying lessons on someone else’s plane.
You are a flight instructor providing instruction on a client’s aircraft.
rent or borrow a plane.

You can expect an annual premium of between $100 and $500, depending on the amount of coverage, your level of experience, and the type of flight you fly.

hangar insurance

Hangar insurance will cover any damage to a hangar or aircraft within a hangar. If you rent space in a hangar, you may need to purchase hangar insurance in the event your aircraft sustains any damage while in storage.

If you own a hangar, you may want to purchase hangar insurance to avoid paying for damage to your aircraft while it is in storage.

international responsibility

international liability is a component of aircraft insurance that covers damage caused outside of the united states. With international liability added to your airplane insurance, you’ll be able to fly internationally while still being covered by your insurance company in the United States.

Some countries do not allow an aircraft to enter their airspace without international responsibility. Most insurance companies offer a standard insurance package worldwide, but some countries may have more specific insurance requirements.

If you plan to fly to the following regions, please contact your aircraft insurance carrier to ensure your international liability covers specific regional insurance requirements:

the European Union
hongkong
germany
mexico
italy

insurance on board

Onboard insurance is self explanatory. Onboard insurance covers any damage sustained while the aircraft is in motion. On-board insurance is usually the most expensive component, as most plane accidents occur during this period.

land hazard hull insurance (grh)

land risk hull insurance (grh) is divided into two categories:

no movement
motion

Still Ground Risk Hull Insurance insures the aircraft against any damage sustained while the aircraft is on the ground and not moving. this includes, but is not limited to:

vandalism
hail
lightning
theft

Ground movement hazard hull insurance covers damage sustained while the aircraft is in motion but still on the ground, such as during taxiing or takeoff.

civil liability insurance

civil liability insurance covers damage to third parties or their property. this type of insurance is often required by law in many states.

The civil liability insurance does not cover any damage caused to the aircraft or the passengers.

passenger liability insurance

Passenger Liability Insurance covers the injury or death of any passenger. The passenger’s civil liability insurance will financially compensate the victim in the event of injury or the family in the event of death.

combined single limit (csl)

You may see the term combined single limit (csl) on your insurance policy instead of passenger or public liability insurance. csl insurance is a combined airplane insurance policy that includes passenger and civil liability insurance.

crew coverage

crew coverage is insurance that covers the crew members of an aircraft, including pilots and cabin crew. crew members generally receive this type of insurance from their company. it is intended to relieve crew members of any financial responsibility in the event of an accident.

how much does airplane insurance cost?

the amount of coverage

Insurance coverage refers to the percentage that the insurance company will cover in the event of a loss. for example, an insurance policy that does not include comprehensive coverage will only pay a portion of the costs involved in an accident.

The cost of your airplane insurance will largely depend on the amount of coverage you need. Getting the least expensive policy that only covers the bare minimum may not be the best option for you.

To make sure you’re getting the best value for your money, estimate how much insurance you’d need in a worst-case scenario and compare the price of the insurance premium. remember to take a long-term view, as the price of the insurance premium will be a recurring (and most likely growing) payment.

increase in costs after claims

You may be wondering if the cost (known as the premium) of your insurance will increase after a claim. Ultimately, it is entirely up to the insurance company. If the insurance company finds the cause of the claim to be someone else’s fault, they may not increase your insurance premium rate.

The insurance company is more likely to increase your insurance premium rate after a claim, no matter whose fault it was. the size of the increase will largely depend on the nature and magnitude of the accident.

tips to minimize aircraft insurance costs

It is extremely important to keep your aircraft insurance costs low. small savings each year will add up to huge cost differences later on. There are many ways to keep your airplane insurance costs to a minimum, though some are more difficult than others.

avoid claims

By far the most efficient way to minimize your insurance costs is to avoid claims. While this may seem obvious and pretty much defeats the purpose of paying for aircraft insurance, avoiding claims, especially small ones, will save you money in the long run.

Aircraft insurance companies are much more likely to increase your insurance premium if you file a claim. If your aircraft is involved in a relatively low-cost minor incident, you may want to pay for the damage out of pocket, especially if the damage was your fault.

for example:

You incur $200 worth of damages. her insurance premium is $2,000 per year. If you claim the $200 in damages, your insurance company may increase your premium to $2,400 per year. you can save money by paying for damages yourself in this hypothetical case.

Please note that this scenario varies significantly between aircraft insurance companies. Creating an open dialogue with a trusted insurance broker is critical to saving money in the long run.

use a hangar

Storing your aircraft in a hangar, rather than tying it up outside, will lower your insurance costs.

Storing your aircraft in a hangar protects it from outside elements such as weather, vandalism, and potential damage from movement on the apron. Also, renting or buying space in a hangar will reduce maintenance costs.

flight training

The more training you have received, the less insurance companies will interpret your risk of being involved in an accident. consequently, insurance companies will offer a lower premium the more advanced your qualifications are.

While it may be unrealistic to spend a lot of time and money to get a new license, such as a commercial pilot’s license, it may be worth spending time and money on additional training. Demonstrating a history of regular flight training in excess of what is legally required will go a long way in showing an aircraft insurance company that you are a lower risk.

Some insurance companies require you to complete specific flight training to be eligible for an aircraft insurance premium. be sure to ask about any additional flight training requirements or any flight training programs that may lower your insurance premium.

increase your hours

Like the amount of training you’ve received, the number of flight hours you have directly influences your risk factor for insurance companies. As a result, you can expect a lower premium the more flight hours you have. statistically, if you have more than 5,000 hours, your risk of being involved in an accident is reduced by 50%.

Also, the more hours you have on the model and type of aircraft you intend to insure, the lower your insurance premiums will be. For example, if most of your hours have been logged on a Cessna 172, your insurance premium will be lower if the plane you’re trying to insure is a Cessna 172, compared to a plane like a multi-engine Piper.

keep your faa record clean

Aircraft insurance companies will review the following two FAA records when applying for insurance:

your medical record
your flight record

If your FAA medical certificate has ever been revoked or required review, this will influence the calculation of your insurance costs. insurance companies view irregular medical history as a risk factor. Unfortunately, there’s not much you can do about it other than stay healthy.

One thing you do have more control over, however, is your flight record. If you have any accidents or incidents on your FAA record, or your license was revoked or suspended, aircraft insurance companies may believe that you are a higher risk pilot.

keep your flight record as clean as possible and be honest about any accidents or incidents you may have been involved in. accidents or incidents that were not your fault should be explained to the insurance company.

join an association

Joining an association or flying club may qualify you for discounts from certain aircraft insurance companies. these organizations charge a membership fee to access certain benefits and there are many to choose from. Do some research and find out if one of these associations is worth joining.

a note on honesty

You may be wondering if you could “misremember” details about your FAA record, experience level, or details about your aircraft to lower your insurance premium. While you may feel that some of the parameters included in your insurance premium calculation may be unfair, failing to disclose information or providing false information constitutes insurance fraud, a felony.

Honesty during the application or renewal process is paramount from a legal perspective, regardless of the cost involved.

conclusion

Aircraft insurance is highly variable and must be tailored to the specific needs of each individual. The key to receiving the best premium possible is to be prepared before you buy. make sure you know your insurance coverage needs and what specifics about you will influence your premium.

By understanding how aircraft insurance works, you will be able to identify which aviation insurance company best suits your needs. if you’re careful (and a bit lucky), you’ll never have to use them!