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Insurance, Business and Financial

Read the policy
Past Forum User
My friend and former C-180 co-owner flew his airplane from Breckenridge to get quotes for the repairs (flight pre-approved by IA who examined airplane and deemed damage as minor and not requiring ferry permit). I stuck around to see what the insurance claims-adjuster guy had to say. We discussed a number of issues, including a review of insurance terminology and other stuff.

The adjuster said one of the most important, and most often overlooked protective measures an airplane owner can take is to simply open the envelope and review the policy when it arrives in the mail each year, and gave the following example that hit a bit too close to home.

He said that in a high percentage of cases an independent adjuster will not have a copy of the policy, and will not be familiar with the coverages, when he arrives to examine a damaged airplane.

Accordingly, his first question to the owner will be "do you have your policy available?" The insured can then be expected go blank, think hard, and (finally) reply "uh, sure, it's here somewhere" whereupon he will dig through the airplane files until he comes out with the big envelope. The adjuster said that in most cases the envelope has never been opened; or it it has, it was only because the owner decided he better look at it after the wreck to see if he was in deep doo-doo.

His point is that people prepare the policies, assemble and attach the endorsements, and type up the pilot requirements and names of the insured's. All of these steps present opportunities for mistakes, and the problem after the accident is that all your dealings and conversations regarding policy terms, limits and pilots were with your agent, not with the underwriter who prepared and issued the policy.

In theory, your agent will have reviewed the policy to be sure that what you discussed is what the carrier issued, but stuff falls through the cracks in that process too. I admit to going to sleep on this issue, since in many cases the agent will advise me that the policy is being "renewed as expiring" so I have just filed the policy, in the unopened envelope, in the airplane file knowing that it will be easy to find.

He also said people get sloppy with terminology. Only the airplane owner can be a "named" insured. Others can be "additional" insured's, which means they are named on the policy, and have the benefits of the coverage, but they are not named insured's insofar as the insurance terminology is concerned.

He also said that the insurance companies are getting even tougher regarding PIC. Most taildragger policies are very specific regarding pilot qualifications. So lets say that you let your friend who doesn't meet either named pilot or open warranty requirements fly in the left seat, with you in the right. You can assume the insurance company is going to say he was PIC when the accident occurred, based on the evidence.

Also be aware that the first thing the adjuster does is take pictures or make copies of all documentation and logbooks, looking for most recent inspections and any discrepancies. If the airplane is not airworthy for due to paperwork deficiencies, the carrier is entitled under the terms of the policy to deny the claim.

In either case the result is that you have violoated one of the basic terms of the policy, and the insurance company gets a free pass. The coverage you bought just decreased, from whatever the policy limits you thought you bought, to zero. Y'all be careful out there, y'hear?