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The path to ownership: Buying insuranceThe path to ownership: Buying insurance

It all starts with a phone call to your insurance broker. You’re buying or have bought an airplane, and you need insurance for it. To prepare for the call, gather some facts and figures about your new airplane.

You need to share with your insurance broker the airplane’s N number, its make and model, and the value you want to insure it for. If you don’t know how much insurance or the types of coverage you want, don’t worry: The broker will share industry norms with you to help you decide.

You’ll also need to provide the broker with information about the pilots of the airplane. For each pilot flying this about-to-be-insured airplane, the insurance broker needs to know name, date of birth, occupation, certificates and ratings, total hours flown, the date of last flight review, and the date of last medical.

With this information, the broker can receive quotes from different insurance companies. Then all you have to do is pick the quote that suits your needs the best.

One more detail about the pilots flying the airplane: You will be asked to distinguish between those pilots regularly flying the airplane (“named pilots”) and those pilots who may from time to time fly the airplane. Let’s say there’s a family of three brothers who are all pilots. Two of them own the airplane; the airplane is registered in their names, and they live in the same town. The third brother comes to visit occasionally and he may fly the airplane during his visit. The third brother is not a “named pilot.”  He is part of the “open pilot warranty.” The open pilot warranty covers those pilots who may occasionally fly your airplane.

As you decide which policy is best for you, consider what type of liability limit you want for your airplane. In an incident such as an emergency landing, property damage and bodily injuries fall under a policy’s liability limit. A standard policy would include $1 million combined single limit to include bodily injury and property damage and could be limited to $100,000 each passenger or each person. For a combined smooth limit, the $1 million coverage the claims for property damage and all bodily injury would not exceed $1 million. For a combined limit that is limited to $100,000 per passenger, the passenger maximum would be $100,000 for each passenger and the remainder of the $1 million would be combined with bodily injury outside the aircraft and property damage. For a combined limit that is limited to $100,000 per person, any bodily injury inside or outside the aircraft would be a maximum of $100,000 per person and the remainder of the $1 million would be for property damage.

Imagine having to make an emergency landing in your airplane. You spy a golf course below with a long fairway where you’re able to land the airplane. Unfortunately, during the landing a golfer is clipped by a wing, your passenger suffers a neck injury, the fairway is torn to shreds, and your aircraft is damaged. Now you have to deal with claims for the golfer, your passenger, and the golf course. The aircraft damage will be handled under your hull coverage, but the property damage and bodily injuries fall under your policy’s liability limit.

With a smooth limit, you have the entire limit amount to address all three liability claims. This means if you insured at $1 million smooth, you have the full $1 million to cover the claims. Policies with smooth limits are typically more expensive, but as we look at policies with a sublimit you’ll understand why. 

With a per passenger sublimit, coverage for the passenger is reduced to the limit listed on the policy. For instance, if you insured at $1 million with a per passenger sublimit of $100,000, the golfer and the course would be covered under the $1 million, coverage for the passenger would be limited to $100,000. 

With a per person sublimit, your coverage amount would be limited not only for your passenger, but also for the golfer since each is a “person.” For instance, if you are insured at $1 million with a per person sublimit of $100,000, the course would be covered under the $1 million, the golfer and the passenger would be limited to a maximum of $100,000. Because per person sublimits are the most restrictive—and there’s almost never a related premium savings—they should be avoided if at all possible. AOPA Insurance does not offer a per person sublimit.

With a family sublimit, the amount of coverage provided for injuries or the death of a family member is reduced. This can reduce your coverage for family members to as little as $12,500, regardless of what amount of liability coverage you purchase. This sublimit would be found in the details of your policy. Rest assured that any policy you obtain through AOPA Insurance will not limit your coverage with family sublimits.

So when do you contact an insurance broker? There are two extremes: One is when you’re about to take off to fly your new airplane home and realize you need insurance, and the other is when you’re simply looking for the type of aircraft you want to buy. However, you want to be in the middle—far enough along in the process to be able to provide the insurance broker with the required information. The good news is once you have provided the information to the broker and received the quotes, it just takes a phone call to start your coverage.

The path to ownership can be confusing, especially for first-time buyers. AOPA Insurance will guide you through the insurance-buying process, answer any questions, and make sure you are an informed and confident buyer. AOPA Insurance knows airplanes and speaks your language.

No matter what you fly or for what reason, AOPA Insurance has the right policy for you. For more information or to request a free quote on aircraft insurance, please call AOPA Insurance Services at 800/622-2672 or visit aopainsurance.org.  Don't forget, AOPA members may qualify for a 5-percent discount. 

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