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The Key to Understanding Your Insurance and Aircraft Liability

Based in South Orange, New Jersey, Larry Rachlin, Inc can help you understand aircraft liability. Don't let legal jargon keep you from understanding your insurance policy and what you need when it comes to deductibles, total losses, and more. With our help, you can learn exactly what coverage is best for your aviation practices.

Plane in the Air

Blue Book Value vs. Insurable Value

There is no connection between a Blue Book value and the insurable value. The insurable value reflects the current cost to restore the aircraft back to its condition prior to the occurence of a loss. The Blue Book is essentially a sales report of the make and model of your aircraft as provided to Blue Book by its subscribers.

Liability Coverage

Larry Rachlin, Inc can help you define your assets and discern how much liability you should plan for. The suggested minimum limit is $1 million, no passenger, sub limits.

Total Loss

Aircraft insurance policies are written on an "agreed value" basis. This means that in the event of a total loss (as defined in your policy), you can still recoup your losses. This depends on the amount of physical damage coverage as stated in your insurance contract, less any deductibles. You will also receive a pro rata return of the physical damage premium.

Insurance Denial

You may be wondering why you were denied coverage. There are two major conditions that an insurance company considers when it is presented with a claim. The first is a pilot warranty. A pilot warranty restricts aircrafts to specific individuals or to pilots with certain levels of proficiency. The most frequent cause of denial of coverage is when the pilot fails to report a certain amount of logged hours. The second condition is use warranty. As stated, this warranty names the purpose of use for your aircraft as private, pleasure, business, or limited commercial, including student instruction and rental. If either of these two conditions is not completely fulfilled, you may be denied coverage.

Breach of Warranty Endorsement

A breach of warranty endorsement is required by the lending institution. It is attached to the policy. This endorsement assures the lender that, even though the insurance company has denied protection because you failed to comply with their warranties, the lending bank will still recover the lien. Please note that the breach of warranty endorsement gives you no protection whatsoever.

Open Hatch