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Dumb question: how does insurance work? Like, I get it would be a good idea if a bunch of randoms collectively buy a plane or (can you do this:) want to rent it

Dumb question: how does insurance work? Like, I get it would be a good idea if a bunch of randoms collectively buy a plane or (can you do this:) want to rent it out to randoms. Or required if you get a secured loan for it. But if you own your own (or a close group does), is insurance required? Or do airfields require it and good luck if you don't have a private strip? FAA requirement? Every hanger requires it? Mechanics will refuse work if it's uninsured? Or is it cheap enough there's no point in foregoing it even if it's not required?

happyjack 3y ago
Insurance is not a legal requirement. Some individual airports will make you have a "on the ground policy" (couple hundred dollars a year) to cover movement and other people's property. You can get liability only insurance, or full hull coverage (I.e. you crash you get a check). Your premium is based on your flight experience and your age (some insurance companies won't underwrite if over 70, some won't underwrite if they think your experience is low for the type of aircraft). I have a $150k hull value plane, and liability for me is $540 a year, and hull coverage is $3500. I do liability only. Mechanics typically buy whatever insurance they feel they need to be "safe." My mechanic doesn't have insurance, but he also says "hell no" to a ton of folks because working on a flight school plane isn't worth the headaches and putting your name on it, since statistics say they will most likely crash.
ultrarunner 3y ago
Yes fractional ownership exists. Once renting is involved, insurance premiums triple to quadruple. There are also certain circumstances under which 100 hour inspections are required, which means maintenance costs go up. Some people get around this by forming a club, which means it isn't quite randos at that point. There are several types of insurance (just like for cars), but public liability insurance is the most commonly required. Most states don't require it as far as I know, though. My understanding is that most FBOs do require it to use their facilities. It isn't cheap, but no one that I've talked to has discussed insurance as though it were optional. I don't doubt for a moment they're out there though.

happyjack 3y ago

Insurance is not a legal requirement. Some individual airports will make you have a "on the ground policy" (couple hundred dollars a year) to cover movement and other people's property. You can get liability only insurance, or full hull coverage (I.e. you crash you get a check). Your premium is based on your flight experience and your age (some insurance companies won't underwrite if over 70, some won't underwrite if they think your experience is low for the type of aircraft). I have a $150k hull value plane, and liability for me is $540 a year, and hull coverage is $3500. I do liability only. Mechanics typically buy whatever insurance they feel they need to be "safe." My mechanic doesn't have insurance, but he also says "hell no" to a ton of folks because working on a flight school plane isn't worth the headaches and putting your name on it, since statistics say they will most likely crash.

ultrarunner 3y ago

Yes fractional ownership exists. Once renting is involved, insurance premiums triple to quadruple. There are also certain circumstances under which 100 hour inspections are required, which means maintenance costs go up. Some people get around this by forming a club, which means it isn't quite randos at that point. There are several types of insurance (just like for cars), but public liability insurance is the most commonly required. Most states don't require it as far as I know, though. My understanding is that most FBOs do require it to use their facilities. It isn't cheap, but no one that I've talked to has discussed insurance as though it were optional. I don't doubt for a moment they're out there though.