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Inurance for LSA schools
Posted: Wed Sep 02, 2009 3:30 pm
I am at the early stages of considering a modest freelance LSA training operation. My concern is having at least some idea of the type of insurance recommended for training and rental operation.
In addition to hull insurance, there is the liability issue. (Student breaks the airplane and hurt himself etc).
From an insurance point of view, would it be better to use Standard category aircraft, such as Aeroncas, Taylorcraft or Ercoupes rather than an S-LSA?
This also brings up the tailwheel issue - does it make it downright impossible to economically insure an Aeronca, for example for student training?
Any thoughts on the matter would be appreciated.
Posted: Wed Sep 02, 2009 4:34 pm
What if you made your students get their own non-owners policy?
When training in a Cub, I had to get my own.
Posted: Thu Sep 03, 2009 8:58 am
First off, DON'T just have your students get renter's insurance. Typically, when flight schools ask students to do this, there are two reasons. One, they want their deductible covered should the student damage the plane, or two, they aren't carrying the proper insurance on their airplane and want you to take all of the risk. The reason you need to have your plane insured for instruction and rental is in the event you and your student get hurt, or the airplane gets damaged, the student's insurance company can come after you for negligence, or refuse to pay the claim based on a number of factors. If this happens and you don't have your own proper insurance on the airplane for instruction and rental, you are screwed.
You need a quote for an instruction and rental policy. The standard policy includes $1,000,000 of liability coverage limited to $100,000 per passenger (this will be used in the event you damage someone else's property or hurt someone else). The standard policy will also include hull coverage based on an agreed value you choose and the underwriter ok's. Typically, for a new LSA, you're looking at $100,000-$150,000 hull value.
Insurance companies have been pricing rates for the more well-known LSAs at the same rate as fully certified planes such as the Aeroncas, Taylorcraft, etc. The only reason the certified planes will be much cheaper on an insurance quote is because the values are so low. If you insure a $20,000 plane instead of a $100,000 plane, if the insurance rate is the same you're going to pay a lot more on the $100,000 plane. You also should keep in mind that tailwheel instruction and rental policies are much more expensive if you can get one at all.
If you have any more questions or need a quote feel free to PM me.
Posted: Thu Sep 03, 2009 11:35 am
Thanks, that info is a good start. I have some more questions I'll send by PM in due course.
Seems to me Ercoupes (with rudder pedals) might not be a bad choice as trainers from an insurance point of view - cost about 1/4 to 1/3 of a new LSA, std. category, tricycle gear and a good safety record.
Posted: Fri Sep 04, 2009 5:02 pm
I congradulate you for wanting to get involved with the Sport Pilot effort. I believe this is a great way for individuals to get involved in flying or for those who are staying involved in flying as a Sport Pilot.
You can get insurance for a new Sport Pilot flight school but you will have to get your materials organized so that your insurance agent can make a thorough presentation to the insurance company. Insurance companies are not egar to insure new flight school, Sport Pilot or Private Pilot. You need to also work with and insurance agent that knows and understands the LSA and Sport Pilot community.
I would recommend you narrow it down to the aircraft you are considering, get your materials organized, and contact an insurance agent at that point. You may waht to do a little internet research and talk to other Sport Pilot Flight Schools to see how they are doing it.
Stay away for tailwheel aircraft to start. (There's no need to add this challenge at the start.) Insurance companies are not keen about tailwheel aircraft in flight shcools to used for rental. I recommend you stay with tricycle gear to start with and maybe a few years down-stream when you got good experience going of you then look into a tailwheel airplane but be prepared to pay more for you insurance...
Posted: Fri Sep 04, 2009 9:23 pm
Thanks again for the input. Running a flying school of any kind is a labor of love - a friend of mine does it and he is not on a quick path to instant wealth.
My hope is to initially start simply with a single aircraft and some freelance instruction and build from there. For a business plan one would need to have some kind of ball park figure for insurance and what is and what is not economically viable to insure. This very much drives the choice of aircraft;
Aeroncas and Taylorcrafts for example can be bought for a quarter of the cost of a new LSA and being standard category aircraft have that in their favor, but are handicapped by being taildraggers. Moreover, I have facilities and skills to service and even do major rebuilds on this type of airplane, so I would be able to afford a substantial deductible on these. (Steel tubing and fabric is cheap!)
What is the opinion of Ercoupes , from an insurance point of view for this kind of operation?
Posted: Sat Sep 05, 2009 9:03 am
If you are determined to use tailwheel aircraft for your Sport Pilot training I would recommend you buy liability insurance only and require your Students to have non-owners (renters) insurance that includes liability insurance for hysical damage to the aircraft. Your insurance will run about $2,000 per aircraft for liability insurance. The Student's insurance owuld cover the physical damage only if the Student as fault. Further you'll need to pursue the insurance comapny for the non-owners (renters) insurance which require an attorney. If you want to purchase physucal damage insurance and lets say the airplane is worth $30,000 I would estimate your insurance would run somewhere around $5,000 for liability insurance and physical damage insurance...provided an insurance company will offer it. As I mentioned earlier it will be difficult to obtian insurance for tailwheel airplane used in a Sport Pilot Flight School. If you decide to use a LSA that costs $100,000 I wuld estimate your insurance would cost about $7,000 for liability insurance and physical damage insurance.
Posted: Sat Sep 05, 2009 7:27 pm
Ercoupes aren't going to cost much to insure, they have a low hull value, are very safe from an underwriter's perspective, and have been around for some time so parts are available. The only negative is obviously the age of the airframe, as some insurance companies won't insure airplanes that old. I believe with your experience the cost of maintaining the Ercoupe would be quite low and so probably worth losing a market or two when it comes to insurance options.
Posted: Sun Apr 11, 2010 9:43 pm
Check the ercoupe closer. I seem to remember the ones with rudder pedals still had the nosewheel steering connected to the yoke. only rudders connected to the pedals. Also the cabin is tight depending on your student and instructor sizes.
They are fun to fly but the LSA legal versions are limited useful load. Univair has a number of improvements to the nose wheel . Proper rigging per the manual is key to having the airplane fly correctly.
Get a thorough prebuy before purchase paying special attention to corrosion and airframe compliance with the type certificate Correct engine, propeller etc.
We went to a tricycle gear converted Piper PA-11 to get insurance. The airplane flies well and has 85 hp with electric start. Useful load is limited like the others so you need skinny instructors.