Aircraft registration with FAA is one of the most mundane issues for their owners. The process is being viewed as a paperwork hassle by most of us and get much needed relief when it is finally over.
You paid money for the aircraft, you control its operation and it is in your possession. You own it, right?
It is when their is need for raising insurance claim, the plot becomes considerably thick for the suffering owner.
Aviation insurance companies look into FAA registration to find out the correct entities and to make payment to aircraft’s legal owner for the damages caused to it.
In case the ownership given on the aircraft insurance policy is different from what is mentioned in FAA records, than it may cause payment problems for damages.
In case, the damaged aircraft has some old liens, than they need to cleared before a payment for total loss or repairs can be made to the policyholder.
It is possible to avoid many of the old liens by conducting a title search as part of the pre-purchase inspection.
Before making the sale, it is the responsibility of the seller to clear out any outstanding issues.
When an insurance claim is raised, it is the responsibility of the title holder to provide a clear title, without which there can be undesirable delay and discrepancy in settlement process.
Things can turn from bad to worse, in case the aircraft accident has resulted in third party property damage or bodily injury and the aircraft has not been registered properly with the FAA.
In such a situation, the registered owner who sold the aircraft and was living with the belief that he or she no longer owns the title, may be brought to a lawsuit, just because there is discrepancy in ownership title.
It will bring in unexpected problem to the previous owner, and unnecessary money and time will be spend by them to get themselves out from the suit.
The present owner of the aircraft who didn’t get the aircraft registered properly after purchasing it will bear the brunt of all the problems caused to aircraft’s previous owner.
According to the data given on FAA website, there are 357,000 registered aircraft at present and nearly one-third of them have inaccurate records. FAA has now asked aircraft owners to get their possession re-registered after every 3 years.
In case your aircraft is not re-registered properly it may also lead to problem in getting aircraft insurance claim.
It is not just insurance, but many other issues will also crop up in case an aircraft owner fail to register it properly, including FAA will have issues with such types of owner and it may also be difficult to sell the aircraft.
According to aviation insurance companies, inaccurate aircraft registration is the most common problem in adjusting claims. Apart from the delay, it increases administrative cost which is passed on to consumers.
You as an aircraft owner, made all the efforts in purchasing the right aircraft for you. Spend some more time now and make sure your aircraft is properly registered.