Look Before You Leap — Are You and Your Airplane Insurable?

August 9, 2017 - EAA and its members from day one have always been about building and flying interesting aircraft. Members have built (or acquired) amazing aircraft of all shapes and sizes — from one-off, plans-built aircraft to proven kit designs. Today, almost 25 percent of the personal (non-commercial) airplane fleet in the U.S. is experimental amateur-built. If it wasn’t for EAA, this would have never happened, or at least would not be what it is today.

Regardless, of whether you build or buy a homebuilt, and whether it is a one-of-a-kind, a kit or plans-built, one thing you will need to do is arrange insurance for you and your airplane. If you do some planning, you can avoid possible setbacks, hurdles, and disappointments. As John “Hannibal” Smith used to say in the popular mid-1980s TV show A-Team, “I love it when a plan comes together!” If you look ahead and do some investigation and planning you can get the right airplane insurance at the best price!

Step One – Before you commit to buying an airplane kit or plans, or a completed homebuilt, make sure it is the right airplane for you. First, do your building skills match the airplane you plan to build? EAA’s Technical Counselor Program and the EAA SportAir Workshops are great resources to help you make an informed decision and assess your building skills. Second, do your pilot skills match the airplane? EAA flight advisors often have the information to help you decide if an airplane is right for your current skill set and/or suggest training to safely transition into the airplane.

Step Two – Before you make a decision on which homebuilt you want to build or buy, you should consult an independent aviation insurance broker who has access to all of the independent aviation insurance companies. This will help you quickly discover what options in coverage, terms, and price are available to you. The right aviation insurance broker needs to be knowledgeable, experienced, and ready to listen and explore your objectives when it comes to insurance. They also need to be well-versed in the type of aircraft you intend to fly, willing to help you understand aircraft insurance and coverage options, and take the time to explain what you need to meet the insurance company’s pilot requirements, including transition training. The broker can also give you some early ideas as to how much aircraft insurance will cost; although this can change, it is still an important step.

Step Two and a half – About 90 days before you are finished building or acquiring your airplane, you need to go back to the aviation insurance broker and get firm numbers and options for aircraft insurance. This step will probably not take 90 days to complete but most quotes from the aviation insurance companies are valid for 90 days and this will give you and your broker time to make sure all possible options have been explored. If you’re building and your timeframe for completing the build will span more than a couple of years, you should check in with you broker to reconfirm the availability and cost of aircraft insurance. Also, if you are planning any changes in the aircraft design, such as engine choice or gear configuration, these may impact insurance cost and even insurability so you should check in with your broker before making the modification.

Step Three – If the EAA flight advisor or your aviation insurance broker have recommended training, make sure you plan ahead so you aren’t at a loss to find the right instructor and training aircraft. It can take time to add a seaplane rating or tailwheel endorsement, and it may be challenging to find a suitable airplane and instructor for transition training depending on the airplane you choose. You can get insurance that will cover you while you get training but that cannot be done if your airplane is under Phase 1 flight testing. This is also true for high-performance airplanes, and rotorcraft or gyrocopters. If you are buying an airplane that has already completed Phase 1 you can get your training in your airplane but you will still need to find a qualified flight instructor with experience in the make and model airplane you are buying. The more you can do to get ready for the airplane you are building or buying the greater likelihood you can save money on insurance and reduce or eliminate hassles.

Step Four –This step is when you make your decisions and buy aircraft insurance. Your aviation insurance broker has presented all of the options and explained your insurance and check-out requirements. Insurance can be placed quickly but at the same time don’t wait until the day you need insurance. Last minute may be possible but it is not always a good idea.

Final Comment – Make sure you have reviewed all of the insurance coverage options and if you have a brand new homebuilt or a homebuilt that was built by someone else, give strong consideration to include aircraft physical damage insurance for both not-in-motion and in-motion. This will cost more than just buying aircraft liability insurance but you and your broker should discuss cost versus benefit of full insurance for the first year.

We certainly hope this article is helpful as well as the webinar we will be offering on this topic. Aircraft insurance is not complicated but in order to make sure you get the right aircraft insurance at the best price you need to work with a knowledgeable aviation insurance professional that can search the aviation insurance marketplace to match you up with the right aviation insurance company. EAA Members have a great resource with EAA Insurance Solutions administered by Falcon Insurance Agency, Inc. If you would like to learn more about how we can help you get the right insurance at the best price, give us a call at 866-647-4EAA (4322) or go online at www.EAA.org/insurance. One of our aviation insurance experts will be happy to help you with your aviation insurance needs.

Bob Mackey is senior vice president with Falcon Insurance Agency, Inc. the official administrators of EAA Insurance Solutions. Bob has been involved in the aviation insurance industry for over 35 years and he is a Commercial Pilot with Instrument Ratings. If you have any comments about this article or if would like to see a specific aviation insurance topic addressed in a future article you may email Bob at bmackey@falconinsurance.com