Renters Insurance

What happens if you damage the airplane in which you are taking lessons?  Who pays for the repairs or replacement?  Maybe you!  So I just bought aircraft renters insurance this week.

The topic of liability and insurance didn't come up right away when I was talking to various flying schools.  While flight schools and fixed base operators who rent planes typically carry insurance on the planes they rent, that is only part of the story.

If a student on a solo flight crunches the rented airplane on landing or takes out a runway sign or dings another airplane with the wing while taxiing, insurance companies get involved.  The aircraft owner's insurance or the flight school or FBO's insurance carrier will cover the damage and liability initially.  But, through a process insurance companies call "subrogation" they can attempt to recover money from the student pilot.  Sometimes they are successful in this effort and sometimes not.  Regardless, the ensuing legal process is not easy nor inexpensive.

Enter "Aircraft Rental Insurance" whose role it is to protect the student pilot who rents planes (or any pilot who rents planes for that matter).  After searching around online, talking to the two major insurance brokers as well as the flight school owner, I decided to buy $1 million of liability coverage and $40,000 of aircraft damage insurance.  Avemco and AOPA are the two main sources of this insurance.  AOPA is the "Aircraft Owners and Pilots Association" which is a lobbying and affinity group for general aviation pilots.  They serve as an insurance broker for several aviation insurance carriers.  I found the policy rates and structures to be roughly similar with both.  I wound up buying a policy through AOPA.  They offer a slight discount for AOPA members and that gave me a good reason to join the association.

With my new rental insurance policy I now have some financial protection from any liability or passenger medical claim I may incur.  More importantly, I have the insurance company's lawyers on my side to help if I am sued by another insurance company.

How much aircraft damage insurance should you buy?  I got several points of view on this and ultimately aimed for roughly half of the value of the plane I typically rent -- or $40,000 in this case.  The Cessna 172S I typically rent is worth about $90,000.  If it gets totaled, there will still be a substantial salvage value in the engine and airframe parts, so a $40,000 policy gets me reasonably close if the primary insurance carrier is successful in subrogating the claim.  

For $628 a year it is a nice piece of mind.