Question: At what point in private pilot training is it absolutely essential to purchase renter's insurance?
Jim: Excellent question! Let me briefly highlight what renter insurance covers. First and primary, renter insurance covers your legal liability related to bodily injury and property damage (to other than the aircraft you are flying). Additionally, it also covers your legal defense for claims brought against you. As an extra coverage option, you can elect insurance that covers the aircraft.
A couple of items come to mind. When I was training for my private license, by lesson 3 or 4 I was preflighting and fueling the aircraft on my own – even without my CFI on the airport. Had I damaged the aircraft – would I have been liable, most likely yes. And looking at it another way, say I’m a pilot (student or otherwise) with a CFI and we have an accident. It’s nearly certain that both you and the CFI are going to be sued by the injured party…your FBO and CFI’s coverage isn’t going to defend you against lawsuits – our renters insurance will as it includes legal defense.
And I’ll leave you with one other thought. What if the FBO, for one reason or another, missed an insurance premium payment? Now there’s a lapse in coverage – who is going to cover the loss – most likely the renter. Only you can protect your financial interest, be careful when assuming someone else’s policy will cover you – especially when they weren’t designed for that reason.
Question: What is the average drop in insurance rates after getting an instrument rating?
Jim: There are a couple scenarios in regard to insurance rates after an instrument rating. In its simplest form, we see about a 2 ½% to 5% decrease as a result of someone obtaining their instrument rating. Now, there are some major caveats…the first being is that aircraft insurance rates fluctuate, and they fluctuate often. These fluctuations can either mask or magnify any change you might have been expecting. For example, in a year with decreasing rates, it might appear as though all this was attributed to your instrument rating. On the other hand, if rates are going up, you might very well experience some cushion against the increase as a result of your new rating. Another point to think about – is that more hours in your make and model also help rates. And generally the only way to get an IFR rating is to build time – helping twofold.
There is another important aspect to briefly mention, in that some aircraft can only be insured with an instrument rating – so no discounts will be offered in these instances (think turbine, cabin class, etc.)
If you haven’t already, I would greatly recommend an IFR rating – not for the insurance discounts…but because it will make you a better pilot…I know it did for me.
Question: I own and insure my plane, but want to borrow a friends - do I need more insurance?
Jim: Thank you for writing in...I was in the same situation last summer when I wanted to borrow a friends Mooney to complete my commercial check ride. At that time, I owned a Cessna 172, but needed access to a complex aircraft for a brief time. Luckily, most of our policies include “non-owned” or renters insurance as a part of the owners aircraft policy. And, better news yet – most of the time this is included for Free!
Look for the section labeled something to the effect of “use of other aircraft.” This section will define exactly what’s covered for both liability and physical damage to the borrowed or rented aircraft. Now this does not mean you can go and rent a jet or helicopter, unless that is what you own and insure on your policy. Typical restrictions include a maximum of 6 seats, a 300 horsepower engine and the borrowed/rented aircraft must be in the same category and class, and for the same use as your insured aircraft. Notice that gear configuration is typically not a restriction…so good news, but review the paragraph or two in your policy – I imagine you’ll be pleasantly surprised that this complementary coverage is fairly broad.
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