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Aircraft Insurance: Types, Costs, Coverage (2023 Updated)

By: Richard J. Gross
Updated On: November 27, 2022

If you're a pilot, aircraft owner, or operator, it's important to have aircraft insurance. In this blog post, we'll discuss the different types of aircraft insurance available, as well as the amounts and chances of acceptance for insurance.

We'll also provide some tips on how to get the best rates for aircraft insurance. So whether you're just starting out in aviation or you've been flying for years, be sure to read this blog post!

What is Aircraft Insurance?

Aircraft Insurance

Aircraft insurance is a type of insurance that covers Aircraft, pilots, and passengers. It can cover damages caused by aircraft accidents, as well as third-party liability, in the event that an aircraft causes property damage or injuries to people on the ground. Aircraft insurance is not mandatory in all countries, but it is highly recommended.

Insurance is a necessary expense for anyone who owns or operates an aircraft. This is in the event of an accident, loss, or damage to the Aircraft. There are different types of aircraft insurance available, and the amount you need will depend on the type of Aircraft you have and your flying activity.

Getting insurance is always beneficial as it protects you from any financial loss that may occur due to an accident. Aircraft insurance is not required by law, but it is highly recommended by aviation experts.

Additionally, some Fixed Base Operators (FBOs) and aircraft rental companies may require you to have insurance before they allow you to fly their Aircraft.

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What Kinds of Aircraft Can be Insured?

Aircraft Insurance

Most Aircraft can be insured, including but not limited to:

  • Fixed-wing Aircraft
  • Rotorcraft
  • Ultralight aircraft
  • Light-sport aircraft
  • Amateur-built Aircraft
  • Vintage Aircraft

The types of Aircraft that cannot be insured are:

  • Warplanes
  • Missiles
  • Rockets

Types of Aircraft Insurance

Aircraft Insurance

Insurance for Aircraft depends on various factors such as the aircraft type, its use, the country of registration, and the flying activity. Below are some of the most common types of aircraft insurance:

Hull Insurance

This type of insurance covers physical damage to the Aircraft caused by an accident, fire, weather, or other perils. It does not cover liability for injury or damage to third parties. The hull insurance is apt where the Aircraft is leased, financed, or subject to a mortgage.

Liability Insurance

This type of insurance covers bodily injury and property damage to third parties caused by the Aircraft. It does not cover physical damage to the Aircraft itself. Liability insurance is compulsory in some countries, and it is recommended even if it is not required by law.

Passenger Insurance

This type of insurance covers bodily injury to the passengers of the Aircraft. It is not compulsory in any country, but it is recommended if you carry paying passengers on your Aircraft.

Cargo Insurance

This type of insurance covers damage or loss of cargo carried on the Aircraft. It is not required by law, but it is recommended if you regularly carry cargo on your Aircraft.

Renters Insurance

This type of insurance covers physical damage to the Aircraft caused by the renter. Some aircraft rental companies require it. The renter's insurance is employed in cases where Aircraft are leased, financed, or subject to a mortgage.

Pilot Insurance

This type of insurance covers bodily injury to the pilot of the Aircraft. It is not compulsory in any country, but it is recommended if you fly solo or carry passengers on your Aircraft.

International Liability Insurance

This type of insurance covers bodily injury and property damage to third parties caused by the Aircraft outside the country of registration. It is recommended for Aircraft that are flown internationally.

For example, suppose you are based in the United States, and you fly your Aircraft to Canada. In that case, you will need international liability insurance to cover you in case of an accident.

In-flight Insurance

This type of insurance covers physical damage to the Aircraft caused by an accident or fire while in flight. It is not required by law, but it is recommended if you fly frequently. This insurance is comparatively more expensive than other types of aircraft insurance.

Ground Risk Hull Insurance

This insurance is the opposite of in-flight insurance. It covers physical damage to the Aircraft caused by an accident or fire while on the ground. Ground-risk hull insurance is recommended if you fly infrequently.

This insurance is split into two categories, namely motion, and non-motion.

  • Motion insurance covers Aircraft while it is in motion, such as during take-off and landing.
  • The non-motion insurance covers Aircraft when it is stationary, such as when it is parked at the hangar. Incidents that can occur to the Aircraft at this point in time include vandalism, theft, and bird strikes.

Combined Single Limit Insurance

This type of aircraft insurance combines hull and liability insurance into one policy. It is recommended for Aircraft that are leased, financed, or subject to a mortgage.

Split Limit Insurance

This type of aircraft insurance covers hull and liability insurance in two separate policies. The hull insurance has a limit per occurrence, while the liability insurance has two limits, one per occurrence and one per person. This insurance is recommended for Aircraft that are not leased, financed, or subject to a mortgage.

No-fault Insurance

This type of aircraft insurance covers bodily injury to the pilot and passengers of the Aircraft regardless of who is at fault in an accident. It is not available in all countries.

War Risk Insurance

This type of aircraft insurance covers physical damage to the Aircraft caused by war. It is not required by law, but it is recommended if you fly in areas where there is a risk of war.

Crew Coverage Insurance

This type of aircraft insurance covers bodily injury to the crew of the Aircraft. It will cover you in case of an accident or incident while the Aircraft is in flight. It is applicable to the pilot, co-pilot, and cabin crew. This relieves the members of the flight from any personal liability.

Now that we have discussed the types of insurance, let us discuss how much these insurances cost.

READ: Private Pilot License Privileges and Limits

How Much Do Aircraft Insurances Cost?

Aircraft Insurance

The Amount of Coverage

The coverage of an insurance policy refers to the limit of liability or the maximum amount that the insurer will pay in the event of a claim. The coverage limit is usually stated in the policy contract.

For example, if you have a $500,000 aircraft insurance policy with a $100,000 hull coverage limit, it means that the insurer will pay up to $100,000 for any physical damage to the Aircraft caused by an accident or fire.

Choosing the best coverage is of the essence, as it will determine the amount you will have to pay in case of an accident. It is important to strike a balance between being overinsured and underinsured.

The Aircraft

The type of Aircraft

Flying a small single-engine aircraft will be cheaper to insure than a large multi-engine aircraft.

This is because small Aircraft are less likely to cause serious damage in an accident than large Aircraft. In addition, small Aircraft are also less expensive to repair than large Aircraft.

The use of the Aircraft

If you use your Aircraft for business purposes, you will have to pay a higher premium than if you use it for personal reasons.

This is because Aircraft used for business purposes are more likely to be involved in an accident than Aircraft used for personal reasons.

The age of the Aircraft

An aircraft that is more than 20 years old will be more expensive to insure than an aircraft that is less than 20 years old. This is because older Aircraft are more likely to be involved in an accident and are also more expensive to repair.

The location of the Aircraft

Aircraft based in high-risk areas, such as war zones or areas with a high crime rate, will be more expensive to insure than Aircraft based in low-risk areas. This is because there is a greater chance of the Aircraft being involved in an accident or being damaged by vandalism in high-risk areas.

The value of the Aircraft

An aircraft with a high value will be more expensive to insure than an aircraft with a low value. This is because the insurer will have to pay more in the event of a total loss. In addition, aircraft that are used for charter or cargo operations will be more expensive to insure than Aircraft that are used for personal or recreational purposes.

The Deductibles

A deductible is an amount that you, as the policyholder, will have to pay out of your own pocket in case of a claim. The higher the deductible, the lower the premium (monthly cost) of the insurance policy.

For example, if you have a $500 aircraft insurance policy with a $100 deductible, it means that you will have to pay the first $100 of any claim.

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What are the ways by which you can minimize the insurance costs for your Aircraft?

Aircraft Insurance

Keeping insurance costs low is important for all aircraft owners and operators. There are a number of ways by which you can minimize the insurance costs for your Aircraft.

Flight Hours

Personally, there are a number of steps you can take yourself to ensure you get the best insurance plan. You can start by increasing your flight hours. The more flight hours you have, the lower your insurance rates will be.

This is because pilots with more flight experience are less likely to be involved in an accident. You can also take a flight training course to improve your skills as a pilot. This will make you a better pilot and will also help to lower your insurance rates.

Finally, you can join an aircraft insurance group. These groups offer their members discounts on aircraft insurance premiums.

Flying a less popular or smaller aircraft

You can also choose to fly a less popular aircraft model. Aircraft that are not as popular tend to be less expensive to insure than more popular aircraft models. This is because there are fewer claims made on these types of Aircraft, and they are also less expensive to repair.

You can choose to fly a smaller aircraft. Smaller Aircraft are less expensive to insure than larger Aircraft. This is because they are less likely to cause serious damage in an accident, and they are also less expensive to repair.

Choosing your area of flying

You can choose to fly in a less risky area. Areas that are considered to be high-risk, such as war zones or areas with a high crime rate, will be more expensive to insure than low-risk areas. This is because there is a greater chance of the Aircraft being involved in an accident or being damaged by vandalism in high-risk areas.

Raising your deductible

Finally, you can raise your deductible. The deductible is the amount that you, as the policyholder, will have to pay out of your own pocket in case of a claim. The higher the deductible, the lower the insurance policy's premium (monthly cost).

For example, if you have a $500 aircraft insurance policy with a $100 deductible, it means that you will have to pay the first $100 of any claim.

You can also choose to pay your aircraft insurance premium in full upfront. This will save you money on interest charges and will also give you a discount on your premium.

Additionally, you can keep your FAA record clean as an added tip. This means that you should avoid accidents and incidents. If you have a clean FAA record, insurance companies will consider you a lower risk and receive lower premiums.

Your medical record should also be clean, as this can also affect your aircraft insurance rates. Moreover, it would also help if you joined a flight club or an association where you can get group discounts on aircraft insurance.

Joining a flight club or an association has another benefit: you can get access to their aircraft insurance policy. This means that their insurance will cover you in case of an accident.

So, these are some of the things that you need to keep in mind when it comes to aircraft insurance. By following these tips, you can be sure that you are getting the best possible deal on your aircraft insurance policy.

READ: 10 Causes of Plane Crash: Preventive Measures

How to get an insurance plan for your Aircraft?

Aircraft Insurance

Choosing an Insurance Broker

Now that you know the basics of aircraft insurance, you might be wondering how you can get an insurance plan for your Aircraft. The best way to do this is to contact an aircraft insurance broker.

Aircraft insurance brokers are experts in the field of aircraft insurance and can help you find the best possible deal on your aircraft insurance policy. They will also be able to answer any questions that you might have about aircraft insurance.

When looking for an aircraft insurance broker, make sure to choose one that is reputable and has a good track record. You can ask around for recommendations or look for reviews online. Once you have found a few potential brokers, contact them and ask for a quote.

Comparing quotes from different brokers is the best way to ensure that you are getting the best possible deal on your aircraft insurance policy. Make sure to compare the premiums, coverage, and deductibles before making a decision.

Reading The Fine Print

You should also make sure to read the fine print of any aircraft insurance policy that you are considering. This is because there might be some exclusions that you are not aware of. For example, some policies might exclude coverage for war zones or areas with a high crime rate.

Once you have chosen an aircraft insurance policy, make sure to keep your FAA record clean and avoid accidents and incidents. By following these tips, you can be sure that you will get the best possible deal on your aircraft insurance policy.

READ: How Do Planes Fly In Bad Weather Conditions? Is It Safe or Not?

Our Concluding Thoughts

This blog post attempted to draw a brief picture of aircraft insurance, what it covers, the types of aircraft insurance and how to get aircraft insurance.

Choosing the right insurance plan for your Aircraft can be a daunting but important task, and aircraft insurance is important to protect you, your family, and your Aircraft in the event of an accident.

We hope that this blog post has helped you to understand aircraft insurance a little better and that you will be able to find the best possible deal on your aircraft insurance policy. Thanks for reading!

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Richard J. Gross

Hi, my name is Richard J. Gross and I’m a full-time Airbus pilot and commercial drone business owner. I got into drones in 2015 when I started doing aerial photography for real estate companies. I had no idea what I was getting into at the time, but it turns out that police were called on me shortly after I started flying. They didn’t like me flying my drone near people, so they asked me to come train their officers on the rules and regulations for drones. After that, I decided to start my own drone business and teach others about the safe and responsible use of drones.

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