| Additional
Insured |
A person or entity, other than the policyholder, who is covered under
the liability provisions of the policy. Additional insureds are given
the same protection from lawsuits brought by others that the
policyholder is. Being added as a named pilot should not be confused
with being named as an additional insured. It should be noted
that the “limit of liability” discussed later is still the maximum that
the insurance company will pay to settle a claim. In other words, if
five people are each “additional insured” on the policy and each of the
individuals is listed as defendants in a lawsuit, the “liability limit”
of the policy will be split among the individuals.
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| Aircraft
Liability Coverage
|
This is one
of the two main insuring agreements found in an aircraft hull and
liability policy. Liability coverage protects those who are covered by
the policy against suits brought by others who claim that they have
suffered injury or that their property has been damaged. The claim must
result from the ownership, maintenance or use of the airplane.
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| Aircraft
Physical Damage Coverage |
Sometimes
called “hull coverage”, this is the other major component of an
aircraft policy. The hull insurance is intended to provide payment
toward the cost of repairing or replacing an airplane that has been
damaged. Most policies protect the aircraft on an “all risk”
basis, meaning that the aircraft is covered against any cause of loss
unless specifically excluded. Excluded items typically include things
like mechanical breakdown, ordinary wear and tear, confiscation or war,
loss of value and loss of use. You can buy coverage while the airplane
is not in motion on the ground, or ground and flight.
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| Guest
Voluntary Settlement Coverage |
This
coverage allows you to make an offer of settlement to passengers who
suffer certain injury, without admitting liability, and in return for a
release from further liability.
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| Hull
Insurance |
This is
coverage for physical damage done to the aircraft. It is not liability
coverage and is therefore triggered by a covered event, regardless of
the reason for the damage or loss. (See Aircraft Physical Damage
Coverage)
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| Industrial
Aid |
This refers
to
corporate-owned aircraft that are used for the transportation of
executives, employees, customers and guests, and which are flown by
full-time professional pilots.
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| Medical
Payments Coverage |
Pays for
first aid, medical, surgical, hospital and funeral expenses suffered by
passengers. This is typically meant to take care of minor injuries and
is available without respect to liability. The expenses involved with
serious injury will be usually be part of a suit for bodily injury, and
covered under the aircraft liability coverage.
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| Named
Insured |
This is the
actual policyholder(s) specifically named on the policy. Named
insureds are responsible for premium payment, have the authority to
cancel or make changes to a policy, will have a say in the claims
process, and are included on any claim checks that are issued.
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|
Non-Owned |
This
refers
to an aircraft that is not owned and insured by the pilot. The most
common use of this term is for an airplane rented by the pilot. This
concept also applies to an airplane borrowed from a friend or owned by
the company for which the pilot works (but not primarily as a pilot).
It can also apply to flying club airplanes, depending on how the club
is structured and how the club’s insurance policy is written. Many
flight instructors don’t give it a second thought, but they are
frequently acting as the pilot-in-command of a non-owned airplane when
they give instruction in a student’s airplane. |
|
Non-Owned Aircraft Liability |
Coverage for bodily injury and property damage to others for which you
may be liable, arising out of your use of a non-owned aircraft;
excludes any physical damage to the non-owned aircraft.
|
|
Non-Owned Aircraft Physical Damage |
Coverage
for the physical damage to the non-owned aircraft for which you may be
liable. This coverage is only available when purchased with liability
coverage. It can include “deductible liability” to cover the insurance
deductible on the owner’s or lessor’s aircraft that you rent or borrow,
up to $5,000 for each occurrence regardless of fault. |
| Open Pilot
Warranty |
A clause in
the insurance policy that lays out the requirements for pilots who fly
the
aircraft other than those specifically named in the policy. The fact
that a pilot is either named on the policy or meets the requirements of
the open pilot warranty means that the policyholder has coverage under
the policy, provided that the pilot's use of the airplane was within
the scope of the policy. It does not necessarily mean that the pilot is
covered by the policy's liability provisions. |
| Pleasure and
Business |
Pleasure and
Business aircraft insurance is coverage for non-professional,
non-commercial aircraft exposures. In other words, general aviation
aircraft, flown by the owner or authorized pilot, operated for pleasure
or incidental
non-aviation business use – specifically not for hire or compensation.
This means that
you cannot make a charge for the use of your airplane or helicopter,
although under some polices you may be reimbursed. The amount that you
can be reimbursed varies from one policy form to another, and we
recommend that you call us or your insurance provider to find out how
yours
reads.
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| "Smooth"
Limit |
Also known
as a 'level' limit, this type of liability coverage offers a single
amount to cover suits for bodily injury and property damage. The entire
policy amount can be paid to a single claimant if need be. This kind of
coverage is more expensive, but is more likely to fully protect you in
the event of an accident.
|
| Sub Limits |
The other
way to buy liability coverage. This provides an overall limit for
amounts that can be paid to all claimants, but typically will have a
maximum for bodily injury to any one person or any one passenger.
Usually, this 'per passenger' or 'per person' limit is fairly low,
often as little as $100,000 each.
|
| Subrogation |
A
legal doctrine under which your insurance company attempts, in your
name, to recover money it has paid under your policy. In aviation
insurance, the most common example of this is physical damage to your
aircraft caused by a third party, such as a fixed base operator.
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| Waiver of
Subrogation |
A
promise, in advance, by you and your insurer not to try to recover
damages from a party who causes damage to your aircraft. Make certain
that you discuss waivers of subrogation with your insurer before
agreeing to them, or you may void your coverage. Waivers of this sort
can be found in hangar agreements, and are sometimes requested by CFI's
or others who will be providing you with pilot services.
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