Peekay Quote:
In general what you're saying is not at all correct, at least not in the aviation industry.
Aviation hull insurance contracts (unlike most types of insurance contracts) are written to a pre-determined "Agreed Value". Any payout resulting from an accident will be in this amount minus deductibles. That's it, no more, no less.
So in aviation hull insurance, the payout value is fixed, and the insurance company doesn't "adjust" the amount based on investigation into engine damage, mechanical failure, etc. The only value to determine is if repairs are economical (that is, under the Agreed Value). If not, the Agreed Value is paid out in full. Period.
In almost all instances, the value of the engines are covered as part of this "Agreed Value" under the aircraft's hull insurance.
The only exceptions relate to things like replacement engines, spare engines, and engines taken off the aircraft for maintenance, storage, shipping, etc.
Peekay, you obviously didnt read my post and you are not correct. I said when calculating the repair costs........! As you correctly say, there is an Agreed Value and this is what is used to calculate whether the aircraft is economic to repair or not! So say the Agreed Value is US$30 million. You can exclude the engine (as it will likely not be covered by insurance) so you have approximately US$ 21 milllion to play with (approx 70% level before things are written off). Therefore, if the Hull calculated repair costs fall within US$21 million (there or thereabouts), it will be economic to repair and that number (for repair) will be the numbers that insurers will cough! Therefore there is an adjustment calculated for the repairs. It is not automatically paid at the Agreed Value, as you suggest. Only when the aircraft is clearly a write off is the Agreed Value paid and again you are incorrect in saying nothing more, nothing less. If there are additional costs incurred for recovery, parking, storage, transportaion, Search and Rescue, these are paid in addition to the Agreed Value.