Aviation insurance can be a complex topic for legal and insurance experts let alone your average pilot. The pilot or owner shopping aircraft insurance for the first time will quickly realize that there is a lot more to this than with, for instance, auto insurance. Let us consider some steps you should take that will help you choose an aviation insurance plan that makes sense now and over the long-term.
Understand Your Status as a Pilot and/or Owner
There are many different types of aircraft insurance policies available. You need to have a strong sense of who you are as pilot and/or owner. Your needs are different if you are attending a training academy than if you are purchasing an airplane with a pilot license already in hand. Likewise, if you are renting or leasing an aircraft, then you need non-owner coverage, and if you are borrowing, you need a policy specifically for that. Perhaps you are operating a drone. Many people erroneously believe that their homeowner insurance will cover them in the event of a drone mishap.
Choose the Right Insurance Broker
Before you choose the right policy, you must choose the right broker. What markets is the broker experienced with and are they appropriate to your needs? Is this a broker you are comfortable with? Are the additional services provided by the brokerage appropriate to your pilot and ownership status?
Understand Your Risk and How a Policy Covers It
Determining how much liability coverage you need is arguably the most important decision you will make. There are no simple answers, which is why you really need an experienced broker who can help you identify your risk and explain how your policy is going to protect you.
Appreciate Your Total Cost of Ownership Before You Commit
Would you buy a high-end sports car without factoring the price of insurance into the total cost of ownership? Perhaps your means make this a non-issue, but for the average owner, the cost of an aircraft must be assessed within the context of all of the ancillary expenses, including insurance.
Review Aircraft Value on an Annual Basis
Perhaps the most common mistake that the average person with an aircraft insurance plan makes is not reevaluating the value of the aircraft each year. Your aircraft will depreciate, and it is generally in your best financial interest to make your plan more affordable each year based on that depreciation.
Even for consumers experienced buying aircraft insurance, the process can be a challenge. The value of professional advice that you can trust and depend on cannot be overstated. Finding that broker you can build a relationship with as early in the process as possible can make a significant difference.