When you’re simply paying premiums, aircraft insurance can seem like just another annoying monthly expense. However, when something happens and your aircraft is damaged or destroyed, insurance can seem heaven sent. This is particularly true if you are an enthusiast that has invested considerable money and time into your plane.
In the event of an accident or incident, though, will you receive a payout that will allow you to replace your aircraft or restore it to its current condition? Doing your research and making sure that you are adequately insured can be extremely valuable if something happens to your plane.
Are You Insured for Stated Value or Cash Value?
Cash value is an estimate of what it will take to replace a vehicle or object based on its original value plus or minus appreciation or depreciation. Stated value is an estimate of the value of a vehicle or object that has been stated by the policy holder and accepted by the insurer.
Many aviation insurance companies will accept and insure for stated value if the stated value can be backed up with documentation. If a stated value isn’t requested or supported, however, the cash value will be used. If you have purchased an aircraft at a bargain rate or if the plane has been remodeled, going with cash value may leave you underinsured and unable to replace or restore your plane at a critical time.
Have You Reported Upgrades and Investments?
Maintenance and standard overhauls are required to keep aircraft flight worthy and don’t have to be reported to the insurance company. However, if you invest money and upgrade your equipment, paint the exterior, or perform other actions that will increase the value of your plane, you should report these to your insurance company and supply documentation regarding the alterations.
Are Your Logs Complete and Backed Up?
A failure to keep logs updated with current certifications, inspections, and maintenance endorsements could affect your payout if you submit an insurance claim. Insurance companies have to comply with regulations and submit this documentation to support claims. You should not only carry logs in the plane, you should also have back-up copies stored in secure locations.
Have You Spoken with Your Aircraft Insurance Agent or Broker?
It’s the job of insurance agents and brokers to know the best ways to ensure that you will receive an adequate sum to repair or replace your aircraft in the event of an accident or incident. While your insurance premiums may be slightly higher if you report upgrades and take other actions to insure your plane for its actual value, you will benefit if something happens.
Your agent or broker will be able to advise you on the steps to take to make sure you’re properly insured through your specific insurance company.
If you have concerns regarding your aircraft insurance coverage, call Aviation Insurance today at 800-780-9201 and speak to our insurance professionals.