Insurance in a flying club
One of the overlooked, but most important aspects of aircraft rental are the pilot’s protections in the aircraft’s insurance policy.
Aircraft insurance provides coverage for two areas:
- Damage to the aircraft and other property
- Liability coverage for the insured party (the persons who are the named-insured)
Another area of importance to the renter is the deductible. These are usually broken down into non-motion and motion. This is the amount the renter must pay before the insurance company pays.
This is an area where many commercial flight schools and aircraft rental operations will save money. The larger deductibles shift more of the exposure from the flight school and insurance company to the renter – you. It’s common for deductibles to be in the $5,000 range.
The biggest area of concern however, when it comes to aircraft insurance for the renter is “subrogation”. This allows an insurance company, “to substitute (one person) for another with reference to a claim or right”. In other words, whomever is responsible for the damage and subsequent claim, can be sued by the insurance company to recover their loss, except for the insured party – the commercial flight school, rental operator, or flying club.
To summarize, if you are involved in an aircraft incident and as the pilot you are deemed at fault, the insurance company can sue you to recover the funds they paid out. This is why when you rent from a commercial flight school or rental operation you need to purchase renter’s insurance to cover you should you be subrogated against. Remember, it is the aircraft owner that is the insured party, not you the renter.
However, if you are a member of a flying club you are the insured party, or what is called the named-insured. This is the case at the Michigan Flyers.
Therefore, if there is an insurance claim for damage or liability claim (i.e. personal injury lawsuit) our insurance company will not only pay for the claim and the defense in court, but they also cannot “subrogate” or sue you, because you are one of the named-insured.
You do not need to obtain renters insurance because you are barred from any subrogation by our insurance company – you are their policy holder. This is a huge advantage in the area of financial exposure, particularly with our flying club.
Our deductible is $250 for a non-motion claim and $1,000 for a motion claim.
Your exposure is limited to the deductible. If there is a claim, our Board of Directors will review the incident and determine what percent of fault is the member's — if any — and assess them for that percentage of the deductible.
Thanks to our forty years of experience and excellent claim history, we’re able to obtain a policy that provides $2,000,000 of liability coverage, subject to $250,000 per seat. Almost all other commercial flight schools and rental operators are only able to obtain a maximum of $1,000,000 of liability coverage, subject to only $100,000 per seat.
For most aircraft renters the added cost of the renters’ insurance far exceeds the cost of monthly membership dues. Our monthly dues help provide this far superior insurance coverage.