Change is Good ... Maybe
By Bob Mackey, representative for the EAA Aircraft Insurance Plan, Administered by Falcon Insurance Agency
March 4, 2010 —
These days there’s a lot of talk about change and how change is good, but sometimes ramifications to change are not so good - especially with your airplane insurance. When your insurance company originally did the underwriting on your airplane insurance, it established the terms, conditions, and price based on information you provided, like pilot experience, airplane, uses, etc. If something changes when your policy is in force, it might not impact the insurance on your airplane at all. However, that is not always the case.
Here are a few examples of changes that might impact your airplane insurance:
Airport: If you decide to move your airplane to a different airport, it might impact your airplane insurance. It doesn’t happen often but there have been instances where the insurance company may exclude insurance coverage for unpaved runways. It’s something you should look into before you make such a change.
Another airport factor that could impact your coverage is shorter runway length. I’ve never seen any exclusion in a policy for this but it very well could come into play at the time you renew your airplane insurance. More often than not there aren’t exclusions in the insurance policy for unpaved or shorter runways but the insurance company may raise your premium or it might not offer renewal terms.
Aircraft: If you make changes to your airplane this could impact your insurance. For example, if you substantially increase the value of your airplane but do not increase its insured value, you might be putting yourself in a bad position in the event of a loss. If you change the value of your airplane, you should change its insured value.
Change examples: Converting your Piper Tri-Pacer to a conventional gear Pacer; taking the O-200 out of your Cessna 150 and replacing it with an O-360; installing floats or skis. Any of these changes might impact your airplane insurance. The impact could be just an insured value issue, but it could also trigger a specific exclusion for modifications such as floats or skis.
Use: Does changing the use of your airplane have a potential impact on your airplane insurance? Very likely! For example, suppose you decide to do a little aerial photo work to help offset the cost of your flying. If you can take pictures for local farmers or a local real estate agency it would help with your expenses.
While it may seem trivial, you’re mostly likely changing the use of your airplane as defined by your policy, something that may be excluded under your airplane insurance. Same goes for power line or pipe line patrol, or running parts from one town to the next for a friend who owns auto parts stores in two different towns. You might be creating a problem with your airplane insurance.
Pilot: What if you decide to let your Third Class Medical Certificate lapse and fly your sport pilot-qualified airplane under the privileges of the Sport Pilot Certificate? Will this change impact your airplane insurance? Will this change impact how much your airplane insurance will cost when you renew your airplane insurance? It might.
Some insurance companies have their insurance policy set up so that as long as you meet the FAA requirements for the airplane you are flying and they are insuring there’s not a problem if you let your Medical lapse. On the other hand, there are a couple of insurance companies that would have to amend their insurance policy to recognize that you are flying as a sport pilot. Further, a couple insurance companies prefer to not insure anyone flying without a Medical Certificate.
So think about how change may impact your airplane insurance. When well-thought out, change can be great. Your insurance agent is your go-to expert, so if you are considering making a change, check with your agent first!
If you would like to know more and the EAA Aircraft Insurance Plan or finding the right insurance for the type of flying you do, call 866-647-4EAA (4322), or visit www.eaainsurance.org and complete the online quote request form. When you insure your airplane through the EAA Aircraft Insurance Plan you’re helping support EAA Member Safety Programs and EAA Youth Education.