How to Obtain Insurance Coverage for "Difficult to Insure" Aircraft

There are many aircraft in the aviation insurance industry that are considered "difficult to insure." There are many reasons that an aircraft may fall into that category that will be covered in this article.  Before purchasing an aircraft, insurance should always be considered.  Get the insurance quote in place first and then make the purchase.  This way you will know that you are comfortable with the coverage, training and price before you buy the aircraft.

With difficult aircraft you may find, even though you can obtain insurance, that there may be limitations on what you can purchase in your policy.  There may be longer than expected training requirements, higher deductibles, no open pilot warranties, lower liability limits, annual recurrent training requirements, age limitations, parts schedules and other restrictions.  These are all things that need to be weighed into account as you make your aircraft purchase decision.

What could make an aircraft fall into a "difficult to insure" category?  Many things, such as a high loss ratio, high wing loading, older aircraft (we will touch more on this in a moment), aircraft not being manufactured anymore, aircraft where parts availability may be in question, and aircraft that lack approved training facilities and/or equipment -- including simulators, rare aircraft, one of a kind aircraft, many experimental aircraft, and others. These are all considerations that come into play when insuring an aircraft.

Some aircraft that once fell into the "difficult to insure" category have since fallen out.  The Cessna 210 and 206 models were very popular with illegal drug smugglers back in the 1980s.  Chances are, if you left one unattended by the Mexican border with no prop lock, it would be gone.  The Piper Malibu had difficulties and a very high loss ratio when it first came out.  Later it was determined that a simple step in training eliminated the cause of the losses.  These are just two examples of aircraft that were difficult to insure that are not anymore.  So just because you heard in the past that an aircraft had problems, don't always assume it still does.  Check with your insurance agent; most likely they will know.

I wanted to touch a bit on older aircraft as these are what inspired me to write this article.  I had a client referred to me that was purchasing a 1969 Lear 24B.  He said he had contacted several aircraft insurance brokers and all had said that only liability coverage was available but no hull.  This client could not afford to self insure the hull.  So I asked about the aircraft.  I found out it was a low time airframe, had low time engines and an excellent maintenance history.  Upon disclosing this information to several underwriters, I was able to come up with a quote that included hull coverage.  I touched on this in my last article; make sure your agent is asking questions and putting your risk together properly.  Ask to see the quote they are going to send to the markets and be comfortable with how they are representing you and your aircraft.  If you are not comfortable, find another agent.

The job of the aircraft insurance agent is to help place your risk.  Sometimes we need to go well beyond just submitting quote request and helping solve the fears that some underwriters may have. Find a training program, find parts availability; look into an aircraft's history and maintenance and know who to present your risk.  Knowing you, your aircraft, the market and the underwriters taste is the aviation insurance agent's job.

One of the reasons this issue comes up is that many "difficult to insure" aircraft also happen to be "desirable to own" aircraft.  Aviation has a very rich history and there are a lot of aircraft out there that fit the personality and taste of a particular person who wants to buy it.  If that fit is a "difficult to insure" aircraft, make sure a little extra effort is put into the marketing of your insurance.  Don't be afraid to ask your agent questions and know what they are presenting.