Aviation InsuranceIf you're the kind of person who prefers the excitement of flying your own plane, reading insurance policies is probably not how you like to spend your time. In the case of your auto insurance, you may know the amount of your deductible and little else. This lack of awareness endures in our society in part because auto policies tend to be fairly standard, and most "surprises" arising from a claim may be fairly minor. But aviation insurance is different. Even if you know considerably more about your auto insurance than the average driver, don't assume your aviation policy works the same way. Experts advise you know exactly what your policy covers, and more importantly, what it does not cover. A Pilot's a Pilot? Unearned Premiums Hull insurance can be fairly expensive. Check to see if the policy language indicates that a premium becomes fully earned (nonrefundable) in case of total loss. Impaired Flyers "Breach of Warranty" Liability Limits "All Risk" Isn't Damage Depreciation — As you might imagine, a plane that has never been damaged would fetch a higher price than a plane that has been damaged and repaired. If your aircraft is damaged, even though it may be repaired to your satisfaction, it won't ever be worth as much as if no damage had occurred. If another party damaged your plane and has insurance, that insurance company is obligated to compensate you for all losses due to damage depreciation. Unfortunately, your own insurer is not under the same obligation to compensate you for damage depreciation. Lost Use — Obviously, if your plane is being repaired, you won't be able to fly it. Depending on how you use the aircraft, whether for business or pleasure, this may or may not present a significant loss. But no matter what the size of the loss, an all risk policy won't compensate you for it. Some companies offer a provision called "Extra Expense for Substitute Aircraft." This coverage is not designed to pay all expenses due to loss of use, but it can help offset some of the financial impact. This is only a partial explanation of the way aviation policies work. If you are in the market for a policy, you may want to educate yourself about the differences between the policies you are considering. If you already own aviation insurance, now might be a good time to read your policy closely, before any potential mishaps occur. This can help you to avoid surprises and decide if your policy is the best one for your needs.
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