Insurance claims may basically be divided into two categories: minor and significant. Some examples of a minor claim are so-called hangar rash, a hard landing, and sometimes even a prop strike. These are the day to-day “dings” that happen to aircraft. Minor claims typically don’t have injuries or 3rd party liability claims (think of damaging someone’s property).
It used to be that insurance adjusters were on the road all the time, driving from airport to airport, to witness and record first-hand any damage done to an airplane. The popularity – and utility—of smartphones has changed all that. Now pilots can simply take a photo of the damage on an aircraft, fill out a report or compose a description of the damage and send it all to an email address your insurance company provides you. When the insurance adjuster receives this data, you may even be asked if you have a repair facility of choice. The insurance carrier will call the repair facility –and sometimes two or three other shops – and get an estimate of repair costs. It's also not uncommon that the pilot/owner be given a choice of which shop to use. The insurance company will then schedule repairs and directly pay the facility. We've seen hangar rash claims repaired, paid and airplanes flying within just a few business days of the incident.
The good news is that most claims are minor and the pilot/owner is basically functioning as their own insurance adjuster in that with a few pictures and a phone call, the entire repair process is started.
Now with significant claims, the process is understandably more involved. In the case of significant aircraft damage, significant property damage, or major bodily injuries, the claims process begins in the same fashion – with a claim call to your broker or insurance carrier an insurance adjuster may come to view the damaged airplane to assess cause and extent of repairs. With claims involving significant injuries, the adjuster will likely interview the pilot and passengers, the FAA, the local police, airport personnel, the NTSB, and any witnesses to the accident or incident.
The first priority, however, will be to secure the airplane from further damage or loss. Typically, a major factor in securing the airplane is to prevent theft of avionics – especially in an off-airport landing. After all, avionics thieves simply need a screwdriver or two to complete the theft. An insurance adjuster will usually pull the avionics from the aircraft even before a recovery team arrives.
Note that property damage can go beyond hitting another airplane, it can be damaging a hangar, other building, or even damaging a farmer's crops. Third party liability also can take the form of environmental damage where, for example, fuel from the airplane could contaminate a body of water.
When a major claim is involved, there are many more things to do and the process can take time and be complex. The insurance adjuster will make sure all bases are covered in the investigation of how the damage to your airplane happened and have complete knowledge and understanding of all the damage involved. Special techniques may even be utilized to assess damage that can't be seen by the human eye.
In most cases, the pilot or aircraft owner is the one who initiates the claims process. There's an exception to that, however, when it comes to another area of significant damage – that done by floods, tornadoes, or hurricanes. Insurance companies will send adjusters to look in areas of catastrophic losses. The adjusters will go airport to airport, looking at N-numbers and finding their customers. When a match is made, the adjusters have been known to initiate the claims process all in an effort to speed up recovery time. This past year, several areas of the US were hit with hurricanes and storms – and many of our carriers were visiting fields once the "all safe" was given – helping restore our customers as quickly as possible.
Most pilots will enjoy a lifetime of flying without ever having to make a claim, but the possibility of damage to your airplane is always possible. That's why savvy pilots always have a fully-charged smartphone and their insurance company's contact information when they fly in order to be prepared.