claims division

or reporting grace period. This means that there may be no coverage if you lease an aircraft without the insurer’s knowledge. You must promptly inform the insurer of an exclusive aircraft lease.

When it comes to coverage or protection for injuries to others, the renter or borrower needs to decide what limit of liability will best protect their assets. Frequently we see wealthy pilots flying with affluent passengers in modest aircraft with minimal liability limits. While pilots do not like to dwell on what can happen, they must consider in advance what amount of insurance is necessary and adequate to protect themselves, their family, friends, and others.

A renter or borrower must understand what is expected by the insurer following a loss. Therefore, it is important to carefully read and understand the policy before operating the aircraft. Besides possessing a pilot certificate, a medical certificate, and being current for the operation intended, are there any additional training requirements? Is the aircraft that I intend to operate approved by the insurer?

For example, some policies state that the nonowned aircraft must not be a helicopter, have an engine with more than 450 horsepower, have more than one engine, or provide more than 7 seats. These types of stipulations are important for the aircraft owner to know as well.

Each non-owned policy also lists what to do in case of an accident. Every policyholder should be familiar with what is expected — most important is notification. Every incident or accident involving non-owned aircraft should be immediately reported to the owner of the aircraft and the non-owned insurer. Notification applies even when you feel you did nothing wrong or if feel the owner is not going to pursue a claim. Insurers would rather know sooner than later.

It is also important to understand that non-owned aircraft policies are excess insurance policies. This means that the coverage afforded by the insurer is excess over any other insurance. In other words, if the renter or borrower is entitled to liability coverage under the owner’s aircraft policy, the coverage afforded by the owner’s insurer would apply first. This is something to consider when trying to decide how much insurance is needed to protect your assets.

Here are the takeaways from the presentation on non-owned aircraft liability insurance:

Non-owned aircraft insurance is liability insurance. The protection afforded by the insurer is based on the Named Insured’s legal liability.

Understand the definition of non-owned aircraft.

Read the aircraft rental agreement prior to shopping for coverage.

Purchase enough insurance to protect yourself and your assets.

Carefully read and understand your nonowned aircraft policy.

Fully understand the expectations of the owner and the owner’s insurer before operating the aircraft. Understand what your insurer expects of you regarding your pilot experience and the aircraft to be operated.

Immediately notify the owner of the aircraft and the non-owned aircraft insurer following a mishap and be prepared to cooperate with the insurer’s representative.

Non-owned aircraft insurance is an important part of the aviation insurance industry. Every owner and operator of an aircraft should always maintain an appropriate amount of insurance.

We can demystify non-owned insurance by simply becoming more familiar with the product and educating those who need it. Too often the person seeking coverage knows nothing about the product or how to determine what is needed. They purchase what they are told to purchase instead of carefully considering what they need. We need to do a better job for the benefit of all.

Finally, I am pleased to report that Jeff Sheets was elected to the AIA Board of Directors as Claims Director-Elect. Jeff will serve with me for one year before taking over after the 2024 Conference in New Orleans. Jeff will be an amazing representative for the Claims Division and I look forward to working with him.

David Gourgues is Regional Manager for McLarens General Aviation. An instrument-rated private pilot, he enjoys flying his 1965 Mooney M20C. His aviation insurance career began in 1990 in his hometown of New Orleans, Louisiana. Most of his 32 years as an aviation insurance claims adjuster have been spent doing field work. From his office in Orlando, Florida, he manages a team of aviation adjusters that cover the eastern part of the United States. He assumed the duties and responsibilities of AIA Director of Claims from Eric Weidner on May 3, 2022. His term will end in May 2024.