Renters Insurance necessary???

karpediem

karpediem

Well-Known Member
Hi all,

I am in the middle of choosing a new FBO to continue my training and I have come across one school requiring me to get renters insurance. I like the school, but they require (50K Hull coverage) which runs around $500 a year through AOPA. Their hourly rate (wet/ inst) is comprable to the other flight schools but this is the only one that requires insurance.

The other schools say that I do not need it for them because they are insured. Is this common? Anyone have any other insurance providers they deal with? Should this affect my decision?
 
karpediem said:
Hi all,

I am in the middle of choosing a new FBO to continue my training and I have come across one school requiring me to get renters insurance. I like the school, but they require (50K Hull coverage) which runs around $500 a year through AOPA. Their hourly rate (wet/ inst) is comprable to the other flight schools but this is the only one that requires insurance.

The other schools say that I do not need it for them because they are insured. Is this common? Anyone have any other insurance providers they deal with? Should this affect my decision?
Click to expand...

Verify the school's insurance covers you, usually it covers the airplane and the school.
 
gne in prog said:
Verify the school's insurance covers you, usually it covers the airplane and the school.
Click to expand...


That is an excellent point. A key factor is can the insurance company come after you (subrogation) of up are involved in aircraft damage. In other words, the FBO would be covered and they wouldn't come after you, but after the insurance company pays, they can come after you. So, when an FBO tells you they have insurance, they aren't lying, but they may not be telling the whole truth either.
 
I've read quite a few commercial rental and instruction policies and they almost all subrogate, which means you can pretty much count on their insurance company suing you if there was any hint of pilot error that resulted in damages.

Renters insurance general starts as liability coverage, which is what you need if you're busy playing with your iPad and taxi their Skyhawk into the wing of a Gulfstream sitting on the ramp.

Optionally you can add hull coverage, which is what you need if you damage the FBO/School's airplane. Usually you want at least enough to cover the FBO's deductible.

Some schools have tried to negotiate much lower premiums by having students be required to carry much higher hull coverage on their renter's insurance. That's what it sounds like in your case. It's not a good or bad thing, it's just one more way people are trying to cope with the crushing costs of insurance by spreading the love a bit more.

You need to decide for yourself which FBO/School's policies make the most sense to you. However, as mentioned above... do not take the line "we are insured" to mean you have any protection, unless you read the policy yourself, assume the opposite.
 
I never tried out AOPA's renters insurance but had AVEMCO for a few years. They were very easy to work with and I was happy their service. Just another option for you.
 
Read the fine print!

Avemco is awesome. It usually only takes about 10 minutes and bam, I'm all done.
 
jtrain609 said:
"Plain language."
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Even so. Nothing to do with aviation or insurance but I knew of a company that used a lot of legalese in its contracts. These were commercial transactions with pretty equal bargaining power and potential customers would contact their lawyers to review and negotiate away some of the more one-sided seller-favorable terms. The company rewrote the contracts to plain language and, in the process, arguably made the seller-centric terms even more one-sided. But now, the customers, thinking they understood it because it was plain English, stopped objecting.

AVEMCO sells CFI insurance with plain language contracts but I wonder how many CFIs who purchase it realize it only covers them in the airplane and not, for example, for a potential claim by a student or his family who bends metal or himself while soloing.
 
MidlifeFlyer said:
AVEMCO sells CFI insurance with plain language contracts but I wonder how many CFIs who purchase it realize it only covers them in the airplane and not, for example, for a potential claim by a student or his family who bends metal or himself while soloing.
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The one main (possibly only) difference between the direct Avemco CFI poliy and the NAFI/Avemo CFI policy, its the NAFI policy is supposed to provide professional liability coverage for past instruction (that done prior to the policy's purchase). I have understood that to mean if I gave someone a flight review last year, and then a liability claim comes against me because they screw up and hurt someone tomorrow, that my NAFI/Avemco policy should provide some liability protection. Yet I've also read the liability policy and see where it says "for your use of aircraft"... so that's always confused me a bit. Does the NAFI policy provide additional professional liability against claims resulting from the actions of people I have given instruction, or does it not?

It's also supposed to include $5,000 for legal representation against FAA enforcement. The AOPA legal services plan caps out at $3,700 if I read it right, but I wonder how many people who have a NAFI policy also go out and pay for AOPA legal services without realizing that?

* Edit: I forgot one other big difference, is I think coverage for instruction in experimental amateur-built is only available through the NAFI plan.
 
MidlifeFlyer said:
You're reading and understanding all the fine print in an aviation insurance contract in only 10 minutes? Impressive. I can't do that.
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I was referring to the fine print in rental agreements. A lot of people assume the schools insurance covers them when the rental agreements usually make it clear that it doesn't.

I believe the NAFI policy covers your sign offs, but I'd need to check again. I know they give you up to $5000 in leap representation, which in reality probably isn't all that much.
 
MidlifeFlyer said:
Even so. Nothing to do with aviation or insurance but I knew of a company that used a lot of legalese in its contracts. These were commercial transactions with pretty equal bargaining power and potential customers would contact their lawyers to review and negotiate away some of the more one-sided seller-favorable terms. The company rewrote the contracts to plain language and, in the process, arguably made the seller-centric terms even more one-sided. But now, the customers, thinking they understood it because it was plain English, stopped objecting.

AVEMCO sells CFI insurance with plain language contracts but I wonder how many CFIs who purchase it realize it only covers them in the airplane and not, for example, for a potential claim by a student or his family who bends metal or himself while soloing.
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That's exactly what I mean, and why I put it in quotes. Nothing is REALLY in plain language.
 
karpediem said:
I am in the middle of choosing a new FBO to continue my training and I have come across one school requiring me to get renters insurance. I like the school, but they require (50K Hull coverage) which runs around $500 a year through AOPA. Their hourly rate (wet/ inst) is comprable to the other flight schools but this is the only one that requires insurance.
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Don't choose a FBO because of their insurance requirements. Choose the one with good instructors and well maintained airplanes. And get the non-owners insurance whether they require it or not. $500 is perhaps 2.5-3 hours of dual, not a huge price to pay for a peace of mind. 30-50K hull coverage seems reasonable to me, you are unlikely to cause more damage to a single engine piston trainer.
 
MidlifeFlyer said:
AVEMCO sells CFI insurance with plain language contracts but I wonder how many CFIs who purchase it realize it only covers them in the airplane and not, for example, for a potential claim by a student or his family who bends metal or himself while soloing.
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I believe it does cover student solos. Since they say explicitly they cover "past instruction", I don't see how else that would be possible.
http://www.nafinet.org/programs/insurance.aspx

One thing that is unclear to me is that Avemco insurance is "supplemental", i.e. only kicking in when all other policies are depleted. What if there's no other policies? E.g. I crash an uninsured plane and I'm found "at fault", are they paying for it?
 
hammerhat said:
I believe it does cover student solos. Since they say explicitly they cover "past instruction", I don't see how else that would be possible.
http://www.nafinet.org/programs/insurance.aspx
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"Believe" whatever you want. Here's the AVEMCO's CFI endorsement: https://www.avemco.com/CFINonOwned/Endorsement.aspx

==============================
This endorsement does not provide professional malpractice insurance. It applies only while you are giving dual flight instruction, flight reviews or check rides in a non-owned aircraft.
==============================

Whether NAFI negotiated different terms from standard I don't know.
 
Our flight school requires renter's insurance, but only in the amount of our deductible. We require the insurance because most people can't write a check for that amount. Asking each student/renter to pay for hull insurance? That would be an agent or underwriter's dream to sell all of those policies! It takes double-dipping to a new level!

The term is "subrogation" (not surrogate/surrogation) and it means that our underwriter can pursue our student/renter for what was paid in claims. That's common, and not different from auto policies.
 
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