Does aircraft insurance pay for stupidity?
I don't want to be the best pilot in the world - Just the oldest
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Does aircraft insurance pay for stupidity?
A thread on another subject prompted me to pose this question which hopefully some of you with legal / insurance backgrounds might be able to answer.
Where damage/ loss of an aircraft occurs and is directly attributable to the PIC breaching CARs, CAOs, AIP, AFM etc, does the insurance pay and pursue the pilot in question? Or can the insurance company wipe their hands of the matter and say "sorry, the aircraft was being flown in an illegal manner".
Gotta admit I have never looked closely at the exclusions applicable to any of our aircraft insurance but with some of the daft things pilots get up to it leaves me a little concerned.
Where damage/ loss of an aircraft occurs and is directly attributable to the PIC breaching CARs, CAOs, AIP, AFM etc, does the insurance pay and pursue the pilot in question? Or can the insurance company wipe their hands of the matter and say "sorry, the aircraft was being flown in an illegal manner".
Gotta admit I have never looked closely at the exclusions applicable to any of our aircraft insurance but with some of the daft things pilots get up to it leaves me a little concerned.
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Not sure of the accuracy of the story;
Apparently a guy at YRED (Redcliffe, QLD), tried to 'jump start' a BE58 with predictable results when you connect a 12V Commodore and a 24V Beech Baron.
The story goes that neither the car insurance or aircraft insurance paid up.
Apparently a guy at YRED (Redcliffe, QLD), tried to 'jump start' a BE58 with predictable results when you connect a 12V Commodore and a 24V Beech Baron.
The story goes that neither the car insurance or aircraft insurance paid up.
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Islander Jock
Speaking as a lawyer, it all depends on the terms of the contract of insurance between the owner of the aircraft and the insurer.
I haven't ever had a chance to read an insurance policy for an aircraft, however, my gut reaction based on the behaviour of insurance companies that I have seen over the years is that they would grab any illegality with both hands as a reason to exclude any liability for the damage on the basis that the aircraft was not operated in accordance with the Act, regs etc.
This is certainly the approach they take with motor vehicle accident damage where the driver has a blood-alcohol reading in excess of the permitted maximum.
They would also try to argue non-liability, even if the illegal activity did not cause the damage.
The grey areas may creep in where there is no clear evidence that any illegal activity has taken place, only a suspicion. You may find in those circumstances that the insurance company would have to pay, but possibly not until legal nastyness had been instituted in a court.
I suspect that an insurance agent would be able to give you a clearer answer.
Speaking as a lawyer, it all depends on the terms of the contract of insurance between the owner of the aircraft and the insurer.
I haven't ever had a chance to read an insurance policy for an aircraft, however, my gut reaction based on the behaviour of insurance companies that I have seen over the years is that they would grab any illegality with both hands as a reason to exclude any liability for the damage on the basis that the aircraft was not operated in accordance with the Act, regs etc.
This is certainly the approach they take with motor vehicle accident damage where the driver has a blood-alcohol reading in excess of the permitted maximum.
They would also try to argue non-liability, even if the illegal activity did not cause the damage.
The grey areas may creep in where there is no clear evidence that any illegal activity has taken place, only a suspicion. You may find in those circumstances that the insurance company would have to pay, but possibly not until legal nastyness had been instituted in a court.
I suspect that an insurance agent would be able to give you a clearer answer.
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Sort of makes you wonder why alot of companies have minimum requirements for pilots but through their floored check and training procedures and lack of SOP's let their pilots out and about, flying in such a manor so as to make any insurance invalid anyway.
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Stupidity
I thought the main purpose for insurance WAS to cover us for our stupidity! I mean if we were not covered for stupidity, then insurance premiums would probably be reduced by 80%.
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What you are or you aren't covered for should be set out in the terms of the contract. But with regard to the "illegal act" question, it must be demonstrated that the illegal act (if one occurred) actually caused or contributed to the loss. If an illegal act occurred but did not contribute to the loss then the insurance company cannot deny the claim.
A non aviation example that crops up occasionally - an insurer cannot refuse a claim because someone was drunk at the wheel if the fact that they were drunk and in control of a car did not actually contribute to the loss. If a drunk driver is sitting at a red light and someone slams into the rear of them, then their insurance policy does actually provide cover.
A non aviation example that crops up occasionally - an insurer cannot refuse a claim because someone was drunk at the wheel if the fact that they were drunk and in control of a car did not actually contribute to the loss. If a drunk driver is sitting at a red light and someone slams into the rear of them, then their insurance policy does actually provide cover.
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Kind of a curly one that, I think if you read the CAO's and the CAR's you will find that pranging the aircraft, whatever the cause, will make you into a criminal, therefor nullifying your insurance.
Makes you wonder why you would bother buying insurance at allif your going to be denied a claim in 95% of cases.
Makes you wonder why you would bother buying insurance at allif your going to be denied a claim in 95% of cases.
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A big call maybe, but the insurance companys are a tricky mob and will argue with silly statements like civil aviation regulation so and so states that if you fly an aircraft in a manner likely to endanger property or life you commit an offence..............and you Mr Bloggs, were flying this aircraft right until impact wern't you? There for mr Bloggs because this aircraft crashed causing damage to property, it is obviouse that you were flying this aircraft in a manner likely to endanger life and property in direct contravention to the civil aviation regulation such and such.
there just a tricky mob of individuals..........ranking very close to used car salesmen.
there just a tricky mob of individuals..........ranking very close to used car salesmen.
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The legal reality is that if the insurance company decides to brush its hands clean of the issue, it's the company that wears the cost of the prang, not the pilot. The only exception to this is if the company can somehow prove that the pilot was knowingly acting like a d!ckhead, and breaking the law.
The Carrier's Liability Act does not permit an insurer to deny liability in passenger claims, under any circumstances.
Regarding hull and third party property damage, I don't recall any instance where an insurer has denied payment of a claim but I would think the insurer may have recourse against any offending pilot, if blatant stupidity was involved.
Regarding hull and third party property damage, I don't recall any instance where an insurer has denied payment of a claim but I would think the insurer may have recourse against any offending pilot, if blatant stupidity was involved.
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Worked with a pilot who took off, minus 1 fuel cap. After an hour or so the engine quit! The pilot then selected the tank with fuel actually in it and failed in his initial attempt to restart the (single) engine. The pilot then reselected the tank (missing the fuel cap) and tried in vain to start the engine all the way to the scene of the accident. The insurance company paid up!!! Some would call this stupid, some illegal - CAR 234.
Grandpa Aerotart
About 10 years ago I owned a (beautiful) C185 in Moresby. It was crosshired by an individual, who's own aircraft was in maintenance, to train a new pilot.
4 days later that new pilot was dead along with, from memory 8 or 9 pax(including children).
Disregarding the fact that he SHOULD NOT have been flying alone in that time frame, when we subsequently plotted the CofG it BARELY REMAINED ON THE PAGE THE GRAPH WAS ON!!!
My Insurance paid me out in full with no arguments whatsoever...it was an agreed value policy. The young bloke was dead so they couldn't chase him...I'm not sure what happened to the owner/CP of the company that leased the aircraft from me in a far as the Insurance Co chasing him goes.
I do know that years later the relatives of some of the dead pax contacted me for 'compensation'. They had been given my number by a PNG ATSB fella who 'felt sorry for them'. I pointed them at the insurance company and the ex business partner of the Owner/CP....who had subsequently been killed in an 'accident' in his own C185.
Even though any number of rules had been broken and any amount of stupidity perpetrated the policy holder (me) was (one of) the innocent party and as such my policy was valid.
Chuck.
4 days later that new pilot was dead along with, from memory 8 or 9 pax(including children).
Disregarding the fact that he SHOULD NOT have been flying alone in that time frame, when we subsequently plotted the CofG it BARELY REMAINED ON THE PAGE THE GRAPH WAS ON!!!
My Insurance paid me out in full with no arguments whatsoever...it was an agreed value policy. The young bloke was dead so they couldn't chase him...I'm not sure what happened to the owner/CP of the company that leased the aircraft from me in a far as the Insurance Co chasing him goes.
I do know that years later the relatives of some of the dead pax contacted me for 'compensation'. They had been given my number by a PNG ATSB fella who 'felt sorry for them'. I pointed them at the insurance company and the ex business partner of the Owner/CP....who had subsequently been killed in an 'accident' in his own C185.
Even though any number of rules had been broken and any amount of stupidity perpetrated the policy holder (me) was (one of) the innocent party and as such my policy was valid.
Chuck.
I don't want to be the best pilot in the world - Just the oldest
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Torres,
That's pretty well what I would have hoped to be the situation also.
On a further note, to those who hire out light aircraft to pilots for pvt use. Do you have the hirer sign an undertaking that they will be liable for insurance excess in the event of a claim? I know we haven't done this yet and fortunately have not yet made a claim. However assuming someone bingles an aircraft and has not signed any form of hire contract, they could perceivably walk away from having to pay any damage or insurance excess costs.
Regarding hull and third party property damage, I don't recall any instance where an insurer has denied payment of a claim but I would think the insurer may have recourse against any offending pilot, if blatant stupidity was involved.
On a further note, to those who hire out light aircraft to pilots for pvt use. Do you have the hirer sign an undertaking that they will be liable for insurance excess in the event of a claim? I know we haven't done this yet and fortunately have not yet made a claim. However assuming someone bingles an aircraft and has not signed any form of hire contract, they could perceivably walk away from having to pay any damage or insurance excess costs.
IJ. That Hire Contract may or may not "stick" and may need a darn good lawyer to do the drafting. (How can I possibly use the words "good" and "lawyer" in the same sentence?)
Where would you stand if any accident was not the pilot's fault? For example, engine failure, unattended damage on ground, etc. And what is it going to cost in legal fees etc to "extract" the excess from the hirer?
I'd be inclined to start with a car hire agreement and work from there.
Indeed, the only solution may be to take the insurance excess up front as a "deposit" on the basis possession (of the brass) is nine points of the law! Or alternatively, have an additional daily rate premium paid in advance by the hirer, in lieu of, or to reduce the excess. Most insurance companies will come to the party on that one.
Where would you stand if any accident was not the pilot's fault? For example, engine failure, unattended damage on ground, etc. And what is it going to cost in legal fees etc to "extract" the excess from the hirer?
I'd be inclined to start with a car hire agreement and work from there.
Indeed, the only solution may be to take the insurance excess up front as a "deposit" on the basis possession (of the brass) is nine points of the law! Or alternatively, have an additional daily rate premium paid in advance by the hirer, in lieu of, or to reduce the excess. Most insurance companies will come to the party on that one.
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Good advice from Torres.
We did just that a few years ago. and just like a car rental company, our agreement stated that the hirer is/was liable for any excess (usually 1% of hull value) regardless of fault.
Just like a car rental company, we used to take a signed credit card swipe or imprint prior to flight.
Of course renters will complain but just point out that hotels, airlines, car rental companies all require credit cards up front.
If you dent a rental car - the excess will be taken out of your credit card account. Even if it wasn't your fault. (tip; report dents in rental car before accepting it - doh!, my hard learnt lesson)
Also comes in handy if the renter skips payment or 'forgets' landing fees and refuelling charges. Abandons an aircraft in the middle of nowhere or does something totally unexpected.
Years ago we tried to charge an insurance excess after the fact - and you guessed it, not a snowflakes chance in hell of getting the money.
I.J. - cover yourself from all angles, even at the risk of offending some renters. It will help you sleep at night when a renter has your aircraft on an extended trip. (BTW; only one lost customer in years due to the credit card policy).
We did just that a few years ago. and just like a car rental company, our agreement stated that the hirer is/was liable for any excess (usually 1% of hull value) regardless of fault.
Just like a car rental company, we used to take a signed credit card swipe or imprint prior to flight.
Of course renters will complain but just point out that hotels, airlines, car rental companies all require credit cards up front.
If you dent a rental car - the excess will be taken out of your credit card account. Even if it wasn't your fault. (tip; report dents in rental car before accepting it - doh!, my hard learnt lesson)
Also comes in handy if the renter skips payment or 'forgets' landing fees and refuelling charges. Abandons an aircraft in the middle of nowhere or does something totally unexpected.
Years ago we tried to charge an insurance excess after the fact - and you guessed it, not a snowflakes chance in hell of getting the money.
I.J. - cover yourself from all angles, even at the risk of offending some renters. It will help you sleep at night when a renter has your aircraft on an extended trip. (BTW; only one lost customer in years due to the credit card policy).
I don't want to be the best pilot in the world - Just the oldest
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Torres, RFG,
Good advice! The whole issue has been in the back of my mind for quite a while and I too looked at and drew comparisons from the hire car scenario. Perhaps a downside to this is that you would probably have to have the aircraft inspected by company staff between each hire.
I know of a couple of incidents where hirers bingled aircraft and walked away refusing to pay the excess. One is now being pursued by the bailiffs after a loss in the small claims court over the matter. The other was a complete tosser and although it was our aircraft, it was X hired through another company. So unfortunately they were left holding the can.
Good advice! The whole issue has been in the back of my mind for quite a while and I too looked at and drew comparisons from the hire car scenario. Perhaps a downside to this is that you would probably have to have the aircraft inspected by company staff between each hire.
I know of a couple of incidents where hirers bingled aircraft and walked away refusing to pay the excess. One is now being pursued by the bailiffs after a loss in the small claims court over the matter. The other was a complete tosser and although it was our aircraft, it was X hired through another company. So unfortunately they were left holding the can.