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Insurance Tips: Aircraft Insurance for Student Sport Pilots

By Bob Mackey

Since the advent of the sport pilot/light-sport aircraft rules, we’ve seen promising growth in all areas of recreational aviation. This is a change we all hoped would come about from these new regulations. The aviation insurance industry has had to adapt to this new community of pilots, aircraft, and commercial operations, and for the most part it has done an admirable job stepping up to make insurance available.

While most individuals flying as sport pilots have secured aircraft insurance, and flight schools offering pilot training towards the sport pilot certificate have found they can obtain insurance coverage, we need more aviation insurance companies involved. For example, what about the student sport pilotè Can individuals who wish to take flight training towards the sport-pilot certificate obtain non-owners (renters) insurance, or if they are purchasing an aircraft to train in, can they find aircraft insuranceè

In the next few paragraphs I’ll provide an update on what’s available in the areas of aircraft and non-owners insurance for student sport pilots.

To start with, if someone plans to purchase an aircraft and then start sport pilot training, he or she has several options between standard, primary, experimental amateur-built, experimental light-sport, and special light-sport aircraft. Is aircraft insurance available for student pilots in each of these categoriesè Yes—and no.

Right now, aviation insurance companies, at least the ones that will insure an experimental amateur-built aircraft, (generally) will not offer aircraft insurance for a student pilot in this category of aircraft. Actually, this has nothing to do with sport pilot because aviation insurance companies have always shied away from the combination of a student pilot in an experimental amateur-built aircraft. So if you have a student pilot considering building or buying an experimental amateur-built aircraft, encourage them not to do it until they’ve checked with the EAA Aircraft Insurance Plan to make sure they are insurable. Most likely they’ll find they can’t obtain aircraft insurance in this situation; if that’s the case, they should still check with Falcon Insurance Agency and the EAA Plan at 866-647-4322.

As for the other categories of aircraft, student pilots should be able to obtain aircraft insurance. I do have a very important recommendation though: If your students plan to buy an aircraft to learn to fly in, make sure they have complete details and qualifications of both you and your school. I cannot stress this point enough. It is much easier to obtain aircraft insurance—and they may save some money—if they have all the details about you when they call the EAA Plan for a quote. Without this information, the insurance company must make assumptions as to your qualifications, and this point alone may cause them to get a declination, or a higher price.

As they’re training, what are their exposuresè What insurance can they obtain to protect themselvesè

As a student sport pilot, or a student pilot working on a private pilot certificate, they should obtain non-owners (renters) aircraft insurance. This is important because if they injure someone, damage someone’s property, or damage the airplane they are training in (even if you are onboard), they may be held responsible by the owner’s aircraft insurance, and anyone else that suffers injury or property damage. All insurance companies are becoming more and more aggressive in their efforts to recover costs for claims, and being uninsured is no guarantee they will be immune to “subrogation,” which is the legal term for an insurance company’s efforts to recover their costs and expenses in conjunction with claims from someone else.

To protect themselves, anytime they fly an aircraft they do not own, rental or borrowed, including flight training, they should have non-owners (renters) aircraft insurance.

How much insurance coverage do they need if they are buying non-owners (renters) insuranceè Well, for the liability insurance coverage I recommend a minimum of $500,000 in a combined single limit, including passenger coverage at $100,000. I also recommend they purchase liability insurance for damage to the aircraft they fly. I recommend they purchase a limit of insurance that equals at least 50 percent of the value of the aircraft.

Why a minimum of 50 percentè Let’s look at an example. They’re using a non-owned aircraft worth $50,000 and they carry $25,000 in coverage. The aircraft is destroyed when they run out of fuel (their negligence). There will most likely be some salvage value for the remainder of the aircraft. If the salvage value is $15,000, the insurance company may seek to recover their loss portion, which is $35,000. If you have at least $25,000 in insurance coverage, the insurance company may accept this amount and not pursue the remaining $10,000. They can always buy more coverage. I’m just recommending that 50 percent is a bare minimum.

So, how much is this insurance going to costè The liability portion for injury and property damage will cost around $180. The insurance coverage for damage to the aircraft will cost $300 for $25,000 in coverage. Overall they are looking at an annual insurance cost of $480. These costs are subject to change, so make sure you check out the complete details on the EAA Plan. To obtain an application and review all of the options for insurance coverage and costs, go to www.eaainsurance.org.

Whether your students own an aircraft, rent, or use an aircraft they don’t own, encourage them to find out more about the EAA Aircraft Insurance Plan by calling 866-647-4322, or visit www.eaainsurance.org and request an online quote. EAA and Falcon Insurance Agency continue to work very hard to make sure they get the best aircraft insurance, with all the added coverage at the most competitive price and service they can trust and count one.

Bob Mackey is vice president of Falcon Insurance Agency Inc.
EAA Insurance Tips is a special EAA Member benefit. If you have an insurance related topic you’d like to see addressed or if you have any comments, please e-mail him at [email protected].