Insurance Question

HeyEng

HeyEng

Well-Known Member
So lets say you are an instructor who is teaching instrument students only. You usually only teach in the students own plane or one that is provided by them but on occasion, you would use your own plane. You would not allow the student to act as PIC or take a checkride in said airplane. With this, what kind of coverage would you need commercial coverage? Seems like a little gray area, so thought I would ask some of the gray hairs out there... :)
 
I assure you the insurance company doesn't think it's a gray area at all. If you are instructing that is commercial activity and your normal owner policy will NOT pay out. This is also often the case if you are instructing in the student's own airplane (many CFI's and Owners don't realize this - CFI's need to CYA).

To provide some limited instruction in your own airplane look for "CFI Owned" policies which are usually 1/2 the cost or even less than full commercial coverage. To go from a personal policy to a commercial policy will increase your premium 4-10x. You should also find a respectable broker, explain exactly what you want to do and have them shop many underwriters, the programs offered by different underwriters vary a lot and some might have a program to fit your needs better... but you really need to know what you want to do first.

In general, assume that your particular use case is not covered by insurance unless you can specifically see that it is covered in a specific insurance policy (and even then you may be in for a fight when a claim is made). That's how the underwriter will see it when you go to make a claim... just the way it goes.

I rent my own airplane out to students and other CFI's so I've been through this. All I can tell you is that it's frustrating and expensive, but if you want to do it there are ways.
 
Also, don't forget the 100 hour if you are doing this.

no person may give flight instruction for hire in an aircraft which that person provides, unless within the preceding 100 hours of time in service the aircraft has received an annual or 100-hour inspection and been approved for return to service in accordance with part 43 of this chapter or has received an inspection for the issuance of an airworthiness certificate in accordance with part 21 of this chapter.
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rframe is exactly right. No gray on this one. Aviation insurers issue specific policies or endorsements for instructors who want to teach in their own aircraft. The regular owner policies tend to exclude paid flight instruction from coverage (whether the CFI or the student owns the airplane).
 
I did not quite understand the OPs post.
1. If you are receiving instruction in your own airplane your insurance will almost always cover that.
2. Teaching someone other than the aircraft owner in an aircraft will require a commercial policy.
 
Blackhawk said:
I did not quite understand the OPs post.
1. If you are receiving instruction in your own airplane your insurance will almost always cover that.
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The airplane and the owner, but generally, not the instructor - even if the instructor is "on" the policy, whatever that means. That's the piece that instructors who teach in owner's airplanes generally misunderstand.
 
rframe said:
I assure you the insurance company doesn't think it's a gray area at all. If you are instructing that is commercial activity and your normal owner policy will NOT pay out. This is also often the case if you are instructing in the student's own airplane (many CFI's and Owners don't realize this - CFI's need to CYA).

To provide some limited instruction in your own airplane look for "CFI Owned" policies which are usually 1/2 the cost or even less than full commercial coverage. To go from a personal policy to a commercial policy will increase your premium 4-10x. You should also find a respectable broker, explain exactly what you want to do and have them shop many underwriters, the programs offered by different underwriters vary a lot and some might have a program to fit your needs better... but you really need to know what you want to do first.

In general, assume that your particular use case is not covered by insurance unless you can specifically see that it is covered in a specific insurance policy (and even then you may be in for a fight when a claim is made). That's how the underwriter will see it when you go to make a claim... just the way it goes
I rent my own airplane out to students and other CFI's so I've been through this. All I can tell you is that it's frustrating and expensive, but if you want to do it there are ways.
Click to expand...

Wow rframe! That was a great post... Especially for a 5 year old. I'm impressed!
 
MidlifeFlyer said:
The airplane and the owner, but generally, not the instructor - even if the instructor is "on" the policy, whatever that means. That's the piece that instructors who teach in owner's airplanes generally misunderstand.
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Most I've seen have an open pilot clause that would cover these instructors, though it's a good idea to have your own insurance as well.
 
Blackhawk said:
Most I've seen have an open pilot clause that would cover these instructors, though it's a good idea to have your own insurance as well.
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That's the mistake CFIs make. The typical open pilot clause does not cover the instructor. It covers damage to the airplane and protects the airplane owner (named insured). And after paying the claim, the insurance company is free to go after the CFI to pay it back.

There are endorsement available that protect the CFI to one degree or another, but AFAIK, you won't find them in any of the standard policies.
 
Thanks for all the information. I'll have to look into the "CFI owned" deal. If it is just that cost prohibitive then I just won't use my own aeroplane!
 
MidlifeFlyer said:
That's the mistake CFIs make. The typical open pilot clause does not cover the instructor. It covers damage to the airplane and protects the airplane owner (named insured). And after paying the claim, the insurance company is free to go after the CFI to pay it back.

There are endorsement available that protect the CFI to one degree or another, but AFAIK, you won't find them in any of the standard policies.
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Yet when I've asked insurance companies this specific question they have said yes, the CFI is covered. In their words if they did not CFIs would not want to instruct their clients in the airplane which would make them less safe. Not saying one should not get CFI non-owner insurance.
 
Blackhawk said:
Yet when I've asked insurance companies this specific question they have said yes, the CFI is covered. In their words if they did not CFIs would not want to instruct their clients in the airplane which would make them less safe.
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Try asking them to show you where in the policy it says that the CFI is protected.

True story (not a CFI situation). I had a client who had an accident in a non-owner airplane. Three different insurance representatives told him he had no coverage. Each of the three had different reasons for saying so. All three were wrong.

Here you go: here's the Avemco standard owner's policy. See if you can find the coverage that protects the CFI.
https://www.avemco.com/Forms/DAPolicy.pdf

Or, here's the FAQ on the AOPAIA site on how CFIs are treated under their owner's policy. http://www.aopaia.com/index.cfm?parm1=Owners FAQ#8A
 
MidlifeFlyer said:
Try asking them to show you where in the policy it says that the CFI is protected.

True story (not a CFI situation). I had a client who had an accident in a non-owner airplane. Three different insurance representatives told him he had no coverage. Each of the three had different reasons for saying so. All three were wrong.

Here you go: here's the Avemco standard owner's policy. See if you can find the coverage that protects the CFI.
https://www.avemco.com/Forms/DAPolicy.pdf

Or, here's the FAQ on the AOPAIA site on how CFIs are treated under their owner's policy. http://www.aopaia.com/index.cfm?parm1=Owners FAQ#8A
Click to expand...

From AVEMCO's Website:

Q: Do I need to add my CFI to my policy in order to receive dual flight instruction?
A: No. Avemco's policy provides approved pilot status to any CFI, current in aircraft make and model, while giving dual flight instruction to a pilot specifically named on the policy.

http://www.avemco.com/Owned/FAQ.aspx#thirty
 
One other thing about the policies. Often they state they cover the person "operating" the aircraft, not the PIC. So if you are letting a friend of yours land the airplane and an accident results you may not be covered.
 
The only issues I've heard where the CFI is not covered as the named insured is where the manipulator of the controls does not meet the open pilot clause, or the aircraft use is not in compliance with the policy- such as aircraft rental. The AOPA opinion is not even correct in calling the operation of the aircraft when the owner is receiving instruction a "commercial" operation. I know of no legal interpretation upholding that, though I am not a lawyer and there may be one out there.

Finally, there have been times when it was difficult to get added as a named insured on an airplane with multiple owners. In these cases I had something in writing from the insurance company stating that I was covered by their open pilot clause for the dual instruction given to an owner.
 
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