The typical single-engine airplane costs anywhere from $15,000 to $100,000. A private jet comes with a price tag that can range from $10 million to upwards of $20 million. To say that either option is an investment would be an understatement. And as is the case with any significant investment, it’s important to insure it in the event that the unthinkable were to happen.
However, unlike automobiles and homes that you intend to take out a loan on, there are no federal or state regulations that require plane owners to have aircraft insurance. There are a few exceptions, which we’ll get to later in this piece.
So, does taking out an insurance policy on your plane make sense? In this post, we’ll get to the bottom of things to help you make the best decision for your situation. Here’s a closer look at what you need to know about aircraft insurance:
As we said in the introduction, there are no state or federal requirements that make aircraft insurance mandatory. However, there are a few notable exceptions that all aircraft owners should be mindful of when it comes to insuring their plane or not insuring their plane:
Like an auto insurance policy, aircraft insurance will cover damage to the aircraft that is the end result of an accident or other events that may occur when the airplane is in flight. Insurance also covers damage to property or people, whether they’re outside of the aircraft (i.e., in the airport, at the hangar, etc.) or passengers riding in the plane. Insurance can also cover damage to the aircraft when it is in the hangar, such as that from vandalism or weather.
We’ll get into more of the specific coverages later on in this post.
The cost to insure your aircraft largely depends on the type of plane, the size of the plane and any specialty equipment on the plane. For smaller aircraft, annual policies usually don’t cost any more than about $2,000. For larger aircraft, the cost may be several thousand dollars more. When weighing policy limits, it’s important to think about the total cost of your aircraft and whether or not the coverage would be enough to purchase a new one should it sustain significant damage. As is the case for anything you’re taking out a policy on, you don’t want to over-insure or under-insure it.
Like most insurance policies, if you were ever to file a claim, then it’s likely that your premiums will increase.
To minimize your insurance costs, there are a few things that you can do. Here’s a look at some of these strategies:
To give you a better idea of what aircraft insurance covers, we’ve broken down the different parts of a typical policy:
Though aircraft insurance isn’t typically required by state or federal law, owning and operating a plane is an investment – and you want to be sure that you’re safeguarding any significant investment. That’s why any owner, part-owner, or renter should have some sort of aircraft insurance policy. For more information on aircraft insurance and to weigh different policy types, contact us today.
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