Ask Jim -Your Aviation Insurance Questions AnsweredAsk Jim -Your Aviation Insurance Questions Answered

October 2015October 2015

JimDisclaimer: The following material is provided for informational purposes only and does not constitute legal advice. For questions concerning your specific circumstances, consult a local attorney. 

PETER:  Do you know where I could buy insurance with “smooth” liability?  I’m concerned that if the worst should happen and my aircraft hurts someone that the 100K per person provision would not be enough coverage.

JIM:  Peter – great question. Some brief background for our readers in regard to what is known as a smooth liability limit. Your liability limit includes bodily injury to passengers, bodily injury outside the aircraft, and property damage. With a smooth limit, you have the entire amount of liability to address all three claims. A majority of policies have a per passenger sublimit of $100,000, $200,000, etc. – meaning if the passenger was injured, their maximum coverage would be limited to the sublimit. In the case of a smooth policy, a passenger would potentially have access to the full policy limit. 

There is one important side note – be aware of a difference in per passenger vs per person sublimits. They sound similar, but are vastly different and the differences can be significant.  Using a $1M policy with a $100,000 sublimit as an example - say there was an accident and both a passenger and a lineman were injured. With a per passenger submit, the passenger could have up to $100,000 in coverage, and the lineman could have up to $900,000 (if there were no claims for property damage). With a per person sublimit, both the passenger and lineman could only have up to $100,000 in coverage.  

This one word makes a lot of difference & AOPA does not offer per person sublimits. 

Please feel free to call us, or any brokerage, and tell them you would like to shop for smooth limits. Smooth limit policies are typically more expensive and are not available for all aircraft and pilots – your broker will be able to help you with what options are available.

DENIS:  Hi Jim, I am a private pilot currently up to date with the third class medical. My question is if my medical is past due and I have a non-medical incident, such as an off runway landing, damaging my aircraft would my insurance company be obligated to pay the claim?

JIM:  Hello Denis – this question truly is related to the terms of a contract. When someone purchases insurance, the insurance policy is in fact a contract – one which transfers risk in exchange for premium. In order for the insurance company to assume the risk, the contract must be followed. In some cases, aircraft insurance may have a pilot currency clause – stating something to the effect that a medical and biennial flight review are required. Not every insurance carrier has this clause, but if yours does and you are out of medical, the insurance carrier does not technically have to pay.

Jim is always ready to assist and answer your questions about aviation insurance. Email your question, and it may just be highlighted in an upcoming Ask Jim Edition and you will receive a complimentary hat.

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