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Insurance Checkup: You and the Dual Insurance Checkout

Bob Mackey, Senior Vice President

Falcon Insurance Agency (NAFI Flight Instructor Insurance Plan)

Did you know that unless an airplane owner has time in make and model of his new airplane that, most of the time, the insurance company will require him to receive a certain amount of dual instruction and obtain a sign-off from a flight instructor prior to solo operation of his new airplaneè Even if the he meets the FAA requirements to fly the new airplane, the insurance company can—and oftentimes does—set additional dual checkout requirements, including a logbook sign-off from a flight instructor.

These dual checkout requirements may simply state the new owner must complete “X” number of hours of dual checkout and receive a sign-off prior to solo. Other times, the insurance company may include a requirement for a specific number of takeoffs and landings to a full stop. I’ve even seen requirements that included takeoffs and landings within 10 percent of full gross takeoff weight, or a fresh flight review, or an instrument proficiency check (IPC).

Why do insurance companies set dual checkout and sign-off requirementsè There are a couple of reasons. First, insurance companies want to avoid what they might call “foreseeable losses.” It’s not uncommon for something to go wrong, unless the new owner has a solid plan to transition into the new airplane. The insurance company usually isn’t going to leave this important step in airplane ownership up to him unless he has recent experience in the same make and model airplane. Face it, even with proper insurance, an accident will create some inconveniences, so avoiding an accident and the related claim is a good thing for everyone concerned.

Insurance companies also set dual checkout and sign-off requirements for another reason: they want to include the flight instructor who provides the dual checkout in the loop of responsibility, which the insurance policy creates. If the flight instructor does not complete the required dual checkout as specified by the insurance company, this may create a coverage problem for the new owner. If the flight instructor completes the dual checkout but the new owner isn’t completely competent—yet the flight instructor signs off on the dual checkout—the insurance company could come back to the instructor after an accident on the basis that the instructor should have required additional dual before signing off the logbook.

The bottom line is when the flight instructor agrees to provide a dual checkout as required by the insurance company, the flight instructor must ensure the dual checkout and sign-off are thorough, complete, and appropriate. Further, the flight instructor must have a complete and thorough understanding as to what the insurance company’s requirements are for the sign-off.

Here are some recommendations for these training sessions:

• Only give dual checkouts and sign-offs in an airplane in which you are qualified and competent.

• Know exactly what the insurance company’s dual checkout and sign-off requirements are. (Require that the new owner provide a copy of the insurance binder, insurance policy, or other insurance document that clearly states the requirements.)

• Make a written plan (with check-offs) that follows the insurance company’s dual checkout and sign-off requirements. Make the new owner sign and date this document when all of the dual checkout requirements have been completed prior to signing him off. Do not sign off the new owner, even if he has completed the hours required by the insurance company, unless he is competent in the new airplane. If a flight review or IPC is required, make sure all elements of these reviews have been satisfactorily achieved.

• Make sure you have insurance. Just having yourself listed as a “named approved” pilot on the new owner’s airplane insurance will not make you an insured under his insurance. The only ways you can make sure you are protected are to: 1) have yourself listed as an “additional named insured” with a “waiver of subrogation” on the owner’s insurance, which will most likely create a premium charge to him; or 2) have your own insurance through the NAFI Flight Instructor Insurance Plan.

Flight instructors provide a valuable service to ensure new owners transition safely into a new airplane. This training avoids accidents and results in fewer insurance claims.

Follow these steps, and add to them as you feel appropriate. In addition, make sure you look into the protection you can have with the NAFI Flight Instructor Insurance Plan. Visit www.NAFINet.org or 866-243-6234. Whichever you do, be smart and protect yourself.

NAFI Insurance Checkup is a special NAFI member benefit. If you’ve got a topic or question you would like to see addressed in NAFI Insurance Checkup please send it to Bob Mackey at [email protected].