Rental insurance

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NismoRR
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Rental insurance

Postby NismoRR » Fri Aug 12, 2011 10:16 am

Passed the Sport Pilot checkride last month and am looking to pick up a renters policy. In the rental agreement with the FBO, it states that I could be responsible for $3,500 as stated here:


23. Renters are strongly encouraged to obtain renters insurance. If Renter does not, or cannot, obtain rental insurance they will be responsible to pay $3,500.00 for any damage including that caused to tires and landing gear due to excessive braking. Further, Renter may be held responsible for aircraft loss of use charges.


I was looking to pick up 500k/50 on liability and 10k for damage. Should I only get $5,000 for damage as it exceeds my responsibility (3500) to the FBO, or go for the 10k "just in case?" The difference in annual premium is only $72. I'm currently renting a Cessna 162.

Appreciate any help on this.

Todd

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drseti
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Re: Rental insurance

Postby drseti » Fri Aug 12, 2011 12:31 pm

NismoRR wrote:Passed the Sport Pilot checkride last month


Yeah, we're all proud of you, Todd!

and am looking to pick up a renters policy.


Good move. I recommend that for all my renters. There are (at least) three good companies that I recommend, all linked from my website at http://avsport.org/acft. (Scroll about 1/3 of the way down the page.)

In the rental agreement with the FBO, it states that I could be responsible for $3,500 as stated here:


That's just what the FBO requires to cover wear and tear. It says nothing about what their insurance company may require in the event of an accident. As a renter, your exposure up to the FBO's deductible is obvious. Less obvious is that every insurance company out there tries to subrogate against the renter in the event of a claim. What this means is that, should there be a total loss, you end up paying the FBO their insurance deductible, the insurance company pays off the FBO for the remainder of the aircraft's value, and then their insurance tries to come after you to recover the full cost of the claim!

My insurance agent is Bob Mackey, who runs the EAA insurance program (and is also a moderator on this forum). When I asked him how much physical damage coverage a renter should carry, he said about half of the value of the plane. I guess the reasoning is that if an insurance company can recover half the cost of a claim, they're satisfied to write the rest off (and probably figure the legal costs would exceed the potential gain from suing you).

That said, if you're flying a 162, which I believe is a $140,000 plane, and really want to protect yourself, you should have about $70,000 in renter's insurance. This should cost you about $675 a year -- a non-trivial amount to be sure, but one helluva lot less than your legal expenses would be if you had an incident.

Of course, if you have no assets (likely the case for someone who just finished flight training), it's probably safe to just take your chances. :cry:
The opinions posted are those of one CFI, and do not necessarily represent the FAA or its lawyers.
Prof H Paul Shuch
PhD CFII DPE LSRM-A/GL/WS/PPC iRMT
AvSport LLC, KLHV
fly@AvSport.org
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srhalter58
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Postby srhalter58 » Fri Aug 12, 2011 12:54 pm

I got AOPA Insurance for a great yearly cost. I was also a new Sport Pilot with 60 Total hours.

Item 3 - Your Coverage and Limits of Liability:
Passengers
Each
Occurrence
Are

$250,000

Included

Passenger
Sub-Limit

$25,000

Aircraft
Damage
$5,000

Premium
$175

IMPORTANT: This Insurance applies during your personal and non-commercial use of non-owned fixed wing, non-
pressurized, land aircraft having a non-turbine single engine of 450 horsepower or less (including non-powered sailplanes)
and capacity for no more than seven ( 7 ) total passengers and/or seats ( 1 pilot and 6 other passengers), and a
"Standard, Experimental, Restricted or Light Sport" Aircraft Certificate, and not furnished to you for more than thirty ( 30 )
consecutive days. Multi-engine & Rotorwing aircraft are not included in this coverage.

YOUR INSURANCE AGENT:

AOPA INSURANCE AGENCY, INC.
P.O. Box 9170
Wichita, KS 67277
Phone: (800) 622-2672 (AOPA)
KS: (316) 942-2223

majorlyannoyed
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Postby majorlyannoyed » Fri Aug 12, 2011 1:12 pm

Student, 60 hours, AOPA Insurance: $488 for 40k of hull damage, 500k liability and 50k per passenger.

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drseti
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Postby drseti » Fri Aug 12, 2011 3:37 pm

A good rule of thumb for aircraft damage renter's insurance is that the premium should run you about 1% of the insured value per year. (This is, of course, above and beyond the personal injury liability part of the policy). So, given an average cost of renter insurance for passenger liability being about $100/yr, the examples cited by srhalter and annoyed are both within the expected range for the aircraft limits specified.
The opinions posted are those of one CFI, and do not necessarily represent the FAA or its lawyers.
Prof H Paul Shuch
PhD CFII DPE LSRM-A/GL/WS/PPC iRMT
AvSport LLC, KLHV
fly@AvSport.org
AvSport.org
facebook.com/SportFlying
SportPilotExaminer.US

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RyanShort1
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Postby RyanShort1 » Fri Aug 12, 2011 5:50 pm

The hull value is important. If you only get $5K in hull, and accidentally run over a tie-down rope and have an engine teardown, you could easily hit the max. If you ever seriously damage an airplane, that will likely not be enough to protect you.

Ryan
Independent Flight Instructor at http://www.TexasTailwheel.com. Come fly tailwheel LSA's.

NismoRR
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Postby NismoRR » Sat Aug 13, 2011 8:22 am

Thanks for the replies. After seriously considering coverage and your opinions, I think I'm going to start with 40-60k of damage / hull coverage. That crappy word "subrogate" came up too many times in my research and here, that a few hundred more bucks for considerably more protection seems worthwhile. I,m taking a look at a Eurofox today that is flying in to my home airport and will speak to the FBO owner and see what he has to say. He had already mentioned to me how insurance companies can go after pilots after claims are paid to owners.

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tadel001
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Postby tadel001 » Sat Aug 13, 2011 5:46 pm

I would suggest calling Denise Porter at Aviation West. 760-727-7444. She will take the time to explain everything. When we started in this business in 2006, she was the only insurance broker willing to put in the time and effort to get the right answers and the right policy. Others just push paper.

Not only do a own a flight school with 100 of renters, I also used to do insurance defense litigation. If you got assets, then you are fair game for a claim. The 1/2 value doesn't really work and is actually not the right advice anymore with subrogation. Insurance companies now send the claims out to law firms that do subrogation for a percentage of collection. If you got assets, they could easily file a lawsuit and get a judgment for less than $5,000 and make $20K to $30K. Do that a bunch of times and you got a good business.

If you can afford the hull amount, get it. If you can't, do as much as you can to get close to it. If you have no assets, don't worry as much about it.

NismoRR
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Postby NismoRR » Fri Aug 19, 2011 9:02 am

Thanks for that info tade. I'm waiting to speak to the FBO owner before I proceed with getting insurance. He's on vacation. I want to have definite confirmation of my potential risk. I flew the 162 Wednesday and had a fantastic xC. The renter after me didn't properly latch the door when he went up and had a major problem with the left side door, which got majorly bent in a very strange way. Haven't heard all the details yet, but am curious if this renter is going to be financially resposible in any way for the incident. Should be interesting. Of course I'm a bit ticked off for I was supposed to fly tomorrow and it's looking like the 162 might be down for a while.

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drseti
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Postby drseti » Fri Aug 03, 2012 7:22 pm

Moving this thread to the Insurance forum.
The opinions posted are those of one CFI, and do not necessarily represent the FAA or its lawyers.
Prof H Paul Shuch
PhD CFII DPE LSRM-A/GL/WS/PPC iRMT
AvSport LLC, KLHV
fly@AvSport.org
AvSport.org
facebook.com/SportFlying
SportPilotExaminer.US


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