AircraftOwner Online

Aircraft insurance is a specialized industry, which differs in lot of ways from other insurance industries. The first insurance for an aircraft was done in the early 20th century by Lloyds of London in 1911. However, the airline industry was well established in 1933 and a need for specialized aircraft insurance industry was realized. The International Union of Marine Insurance set up an aircraft committee and by 1934 eight European Insurance companies were established.

Aircraft Hull Insurance

The task of accepting the risk of major airlines can not be handled by a single insurer as aircraft accidents involve loss of million of dollars. So the industry tends to use different kinds of syndicates.

Almost every airline arranges fleet policies to insure all aircrafts they own and operate. Most of them are covered by 'All Risk Policy', but this includes a fairly high deductible amount. This deductable can lengthen between $50,000 for a Twin Otter to $1,000,000 for a huge bodied jet aircraft.

Aircraft Liability Insurance

This consists of two types of insurance categories:

1. Liability covering baggage, cargo, passengers, mail and crew of the aircraft. It is concerned with the operations that an airline performs.
2. Another is the third party liability insurance which is for the damage caused to the property or people who are not boarded on the plane.

Every airline should cover both the categories and try to get them in a single policy. Small aircrafts use small airstrips which have less potential risk exposure in comparison to the large operators using main airports.

General Aviation insurance

Many of the aircraft companies cover other end of the market, consisting of privately owned airplanes and helicopters. However much of the insurance institutions do not provide insurance facilities for both the aircraft itself and any liability attached to it. There are other specialized insurance available such as flight instructors, which aims at protecting flying instructors against any sort of negligence claims. Insurance is also provided for a rent out, leased out aircraft and also for the pilot if he is hired for flying the aircraft. Certain benefits are also meant for the family members of the pilot and crew in case of any incident.

Aircraft insurance is a specialized industry, and those willing to take it should go for an advice from an insurance company or an insurance broker.

For more insights and further information about Aircraft Insurance, Aircraft Financing and Aviation Insurance visit our site:- http://usaviationfinance.com/

    Last summer I took a non-pilot friend of mine, Paul Hodap, for a ride in my Fairchild PT-23. We departed ANE [Anoka, MN Airport] in the Minneapolis area, flying down the nearby St. Croix river, briefly crossing into Wisconsin. We continued past the locks on the Mississippi and on about 15 miles to one of the nicest grass airports in America, Stanton Field [SYN]. There we shot a couple of landings before taxiing in for a bottle of Coke out of an ancient vending machine and an ice cream sandwich from the honor system freezer, payment received in a used coffee can.

    The weather could not have been nicer. We continued our flight along the southern reaches of the Twin Cities metro area, reached the corner of the southwest metro near Flying Cloud Field then turned north along the western edge of “The Cities.” In doing so we passed over Lake Minnetonka which is actually a series of interconnected lakes with plush homes, beautiful beaches and lots of bars and boats. Staying quite safely under the MSP TCA, everything was visible. It was one of those flying carpet flights.

    When we landed back at Anoka County, Paul asked me, “What’s involved in getting your pilot’s license anyway?” I knew the flight had struck a cord. In a way I felt like missionaries from any religion must feel when they sense they have a convert. With a little more gentle preaching, just maybe we could win one more over.

    You can’t imagine how happy I felt when, just a few weeks ago, Paul called me to ask where he should go and whom he should talk to about taking flying lessons. As his office is very near Flying Cloud in the SW metro area I gave him several options. I went out with him for dinner last evening and he informed me that he now has 3.5 hours of flight time and is scheduled to fly two or three times a week until he is ready for his check ride.

    At our dinner, Paul asked me about airplane prices and what it would take should he ultimately decide to buy an airplane. I went through quite a few options with him, from LSAs to used 182s. He said his dream was to have a four-place airplane to fly on overnight trips “Up North,” as Minnesotan’s are want to say about weekend excursions to the state’s lake country. If I know my friend as well as I think I do, he will be finished with his license by late summer and will have a good idea of what aircraft he is going to purchase The whole process brings a smile to my face.

    This is why I am so pleased with the new EAA program that gives Young Eagles their first log book after their Young Eagles flight. Finally, after 1,000,000 kids, there is a plan to leverage that first flight experience into a first step for young aviators. The plan is a good one.

    After a Young Eagle gets their log book they also receive an invitation to take an online Private Pilot Ground School course free of charge. To keep them engaged, after they finish their first 10 hours of study, the EAA pays for a one hour flight lesson as a reward for sticking with it. The program is phenomenal. The very first Young Eagle to get a Private Pilots license will have received it by the time you read these words. This, my friends, is what aviation needs.

    I love what the wonderful people at the EAA and EAA chapters do for all of us. Introducing potential new pilots to flying is one of their greatest endeavors. So is bringing us all together at EAA chapters and fly-ins at the local level and the World Class event that is AirVenture Oshkosh every summer.

    As a member of the Young Eagles Committee I work with many others in an effort to raise funds to support the EAA’s outreach programs. After attending two airplane auctions in Arizona in the past two years I suggested reviving that tradition within the EAA, specifically at AirVenture. It makes a lot of sense. Where else could you find so many aircraft and so many potential buyers and sellers in one place? AirVenture is it and the EAA has announced that a First Class Auction, called The Spirit of Aviation Aircraft Auction, will be held at AirVenture this summer. Everybody loves an auction and pilots absolutely love aircraft auctions.

    The EAA has set up a very detailed Web Site, www.airventure.org/auction/ for those interested in buying and/or selling an aircraft at the auction.

    The Spirit of Aviation Aircraft Auction makes sense for everyone involved. The cost for participating as a buyer or a seller is very reasonable. And who could imagine a better venue than AirVenture? Even if you just go to watch it will be lots of fun. Plus it should give us some real idea of aircraft valuations. In addition transactions at the auction will help add liquidity to the aircraft marketplace. When planes sell, buyers often invest in upgrading their purchase with everything from pilot paraphernalia to engines and paint jobs. When the sellers sell their aircraft, they may well decide to invest in another. In all of this, the transaction fees benefit aviation and critical outreach programs like the Young Eagles Flight. It’s a win-win-win for everyone.

    If you are interested in buying or selling an aircraft this summer, I stongly suggest you visit the EAA Web site. And don’t forget, if you are looking to buy or sell an aircraft, you can do it here at AircraftOwnerClassifieds.com. All classified listings are FREE!

  OK, so you want to buy an airplane. How are you going to title it? Particularly, how are you going to title it if more than one person is involved in the ownership of the airplane? These are questions that confuse most people.

    Of course, the easiest way to title the aircraft is to put it in one, individual name: “John Q. Pilot”, for example. Alternatively, an existing business might want to title its aircraft in company name: “Widget Manufacturers, Inc.” would be an example of “corporate ownership”. If Widget Manufacturers, Inc. is incorporated in one of the states of the United States, and if the President, 2/3rds of the other members of the Board of Directors, and 75% of the shareholders are all United States Citizens, then the Widget Manufacturers, Inc. would qualify as a “Corporation” on the Application for Registration. If the corporation does not meet these requirements, then the corporation would not be eligible to register the aircraft in the United States unless the ownership structure met three other specific criteria, and the box on the Application for Registration would have to be checked as a “Non-citizen corporation”.

    Many people, including a lot of lawyers, tend to shy away from titling assets in the name of an individual or a company that has other business, preferring instead to create a “single purpose entity” for the purpose of holding title to the aircraft. This method is generally used to “compartmentalize potential liability” such that an uninsured loss attributable to the aircraft does not affect the assets of the main corporation. As I pointed out in one of my first articles, aviation is one area where this tactic can become a trap for the unwary. The FAA does not favor single purpose entities. In fact, when you register an aircraft to a corporation or an LLC that has no other business purpose except the ownership of the aircraft, the FAA considers the aircraft to be commercially used because the only purpose of the single purpose entity is to provide transportation by air. In order for an artificial entity to own and register an aircraft, the ownership of the aircraft must be “incidental” to the business of the corporation. A real estate company can own an aircraft in its name and use the aircraft to show properties or to transport is agents around the state to take listings and make sales. But XYZ Company, Inc. cannot take real estate agents around the state for these purposes without being considered a commercial operation, which would require XYZ Company, Inc. to have a 135 certificate. It doesn’t make a lot of sense, but that’s the way it is. 

The Application for Registration form does not contain a section for Limited Liability Companies. In general, these are treated like Partnerships, and you may check that box. You will be required to provide an LLC statement to the FAA showing that all the members of the LLC are United States citizens and providing some additional information. Obviously, a formal partnership would check the “Partnership” box as well.

When more than one person or entity owns an aircraft, the FAA considers the aircraft to be “co-owned”. So Jack and Jill Pilot, husband and wife would register their aircraft as “co-owner” on the Application for Registration. “Fractional Ownership” is a specific type of co-ownership. Fractional Ownership, as used by Subpart K of Part 91 of the FARs, requires at least two aircraft to be involved in an FAA-approved program which blends parts of the requirements of Part 135 with the requirements for Part 91. It involves a lot of paperwork.

    Where a bunch of friends simply want to share the ownership of one aircraft, the proper name for the type of ownership to be placed on the Application for Registration is co-owner”. Different types of individuals and entities can co-own an aircraft. For instance, John Q. Pilot and XYZ Pilots, Inc. could co-own an aircraft. Technically, you may have as many co-owners of one aircraft as you want, but the FAA starts to look a little askance at the transaction when there are more than five co-owners of a particular aircraft. Under such circumstances, you may find that the ownership is more likely a flying club or a fractional ownership program, each of which has different paperwork and compliance requirements.

    There are specific requirements for documentation that must be submitted to the FAA when an entity other than an individual wants to register an aircraft on the US Civil Aircraft Registry. Make sure that you follow the instructions on the forms for the Bill of Sale and the Application for Registration. If you have questions, or if the FAA kicks back your attempt to register your aircraft, call an aviation attorney for assistance. Remember, it is both a crime and a violation of the FARs to fly an unregistered aircraft. If you own an aircraft, and you are not completely sure of how that aircraft is titled, you may wish to look on the FAAs website and do an N-number search to see what the FAA records reflect. If the information doesn’t look like what you think it is supposed to look like, that is a big clue that you need to call somebody to get the situation fixed.