General aviation is still going through many challenges. Aviation security and regulations have expanded.
The economy has improved in many spheres of US general aviation but still there are some holes that need to be plugged. Traditional medium to small FBO still struggle to survive.
Increase in cost of repairing aircraft, increasingly contentious society and rise in cost of aircraft insurance are just some of the many challenges faced.
In the middle of all these problems lies a problem that has escaped the radar on most occasions.
There are still hundreds, if not thousands, of aircraft borrowers and renters who are flying without any insurance coverage at all.
Such pilots are prone to legal hassles and serious financial loss and most of them continue to fly unprotected, and in many cases, without knowledge of the danger surrounding them.
Dangers that Surround Renter Pilots
Damage to the borrowed or rented aircraft is the most obvious danger itself, that can raise an aircraft damage liability (ADL).
In case the damage has been caused by the renting or borrowing pilot, than it is highly probable that he or she will be held responsible.
When the aircraft owner is not responsible than the damages will be born by the pilot through a process called “subrogation”. The owner will want to recover the deductible and the aviation insurance companies will want to recover the amount it will have to pay to the owner.
This is not all
A more serious problem lies in the form of bodily injury to people outside the plane and / or to passengers.
Damages to property including crop fields, houses, runway lights, cars, hangars, other aircraft etc. are also part of the problem.
Damage and injury caused to others is not the big problem in itself, but the money spent in defending oneself from the litigation arising out of the accident.
In case you decide to face the plaintiff’s attorney on your own, it is sure to give you sleepless nights. Hiring an aviation-savvy attorney to take you out of the situation can be a difficult and expensive prospect.
Why stay away from Aircraft Insurance?
Bigger question, why pilots continue to fly borrowed or rented aircraft without aircraft insurance?
Many pilots (non-owner) are of the belief that they are covered by the owner’s policy or by the FBO. It may be possible in some instances, however, most of the FBO do not provide coverage anymore to renters particularly due to cost.
Renter pilots, in many cases, are not aware of the type of operator or owner policy they have. The operator or the owner might have canceled the policy or it might have lapsed just before the accident occurred.
The lack of understanding of the requirement of non-owned aircraft insurance is one of the main reasons for its unfamiliarity.
Most of the products sold by aviation insurance companies is through commissioned agents and unfortunately commission is low for selling non-owned aircraft insurance.
It is because of this reason most aviation insurance companies and their agents do not invest time and money to this particular community of pilots.
There is urgent need to educate renter pilots about this aspect of their flying and of the safety and issues associated with it. A pilot who want to rent or borrow an airplane should contact aviation insurance companies directly to learn about this safety feature and get covered.
Non-owned aircraft insurance not only protects the pilot but also provide various benefits to FBOs:
The deductible portion of the FBO’s loss is taken care by renter insurance.
ADL insurance could eliminate or reduce the loss paid by FBO’s insurer when it has been caused due to renter’s negligence.
Insurance of non-owned rented aircraft may widen the scope of potential insurance recovery in the case of an accident, which can lead to lower insurance costs to the FBO.
ADL can also compensate for the loss of use in case the FBO is not able to rent the aircraft and loses money.
Non-owned renter aircraft insurance will come as a big relief for the injured person. When the responsible borrower or renter is covered under non-owned aircraft insurance it will help immensely in loss settlement.