Question: I own a two seated aircraft and have a $1,000,000 policy with a submit of $200,000 per passenger. Since I can only carry one passenger, what would occur if I had an accident? Assuming no other damage, or claims, who would be liable if the passenger incurred more than $200k in hospital bills? Would my policy be able to pick up the additional expense up to $1 million, or would I be liable for anything above $200k?
Jim: With a per passenger sublimit, $200k in this example - unfortunately you would be liable for passenger personal injury in excess of the sublimit. When sublimits are given, it's not necessarily dependent upon the number of passengers an aircraft can hold. In a broader example of a six seat aircraft, if all 5 passengers were injured, they too would be subject to the "per passenger" sublimit - in this example, limiting insurance recovery to $200,000 per passenger.
This is a great example of why one might want to consider what is known as a combined single limit or "smooth" policy. These policies effectively remove the sublimits on passengers. Of course there are a few additional requirements to qualify for this type of policy (total hours, hours in the make/model, etc.), but if it's available, it might be one to review. In many cases, the price for a smooth policy can be surprisingly affordable.