How to insure for flight instruction?

[[email protected]]

Howdy,

I'm currently looking at trying to put my beloved 1963 Beech Musketeer
under commercial insurance to offer flight instruction in, and rental
of. It's either that, or sell it, as my partnership is dissolving. I
have an airport that needs a small flight school, and has plenty of
potential students, and a couple of independent CFIs who would love a
plane to teach out of part-time. My problem is the insurance issue.

I have sent out some requests for insurance quotes from various
agencies, but nobody has gotten back to me, indicating to me that there
aren't a lot of people beating down the door to insure a single-plane
flight school. The airplane will be owned by an LLC, not by me
personally, altho I own 95% of the LLC.

The Musketeer isn't too valuable (even tho it's a great plane, and a
fantastic plane to do training in, the hull value is only around
$20,000.), but even with that low a hull value, this proposition
doesn't make economic sense if the insurance is going to cost more than
$3000 per year.

So are there other CFIs out there offering instruction/rental of their
own planes? How are you doing it? What is your insurance costing you
per year?

Is it an option to not carry *any* insurance on the thing, but require
all students and renters to have renter's insurance, and all CFIs to
have non-owned CFI coverage? I want to be responsible and be able to
cover any damage done in the remote condition that something happens,
but I don't see paying $6000 a year for coverage on a $20,000 airplane.
Any ideas or suggestions?

Thanks,

Cap

[Robert M. Gary]

wrote:

> So are there other CFIs out there offering instruction/rental of
their
> own planes? How are you doing it? What is your insurance costing you
> per year?

Not me. Most insurance co's want to see at least 2 or 3 airplanes
before they bother quoting. I'm sure you can find someone to quote it
if you try hard enough. Figure triple the insurance you are paying now.

The best bet would be to lease it back to an FBO. You can get on their
policy for MUCH less than you could ever buy a policy on your own.

> Is it an option to not carry *any* insurance on the thing, but
require
> all students and renters to have renter's insurance, and all CFIs to
> have non-owned CFI coverage? I want to be responsible and be able to
> cover any damage done in the remote condition that something happens,
> but I don't see paying $6000 a year for coverage on a $20,000
airplane.
> Any ideas or suggestions?

That's not an option because it would not cover accidents caused by a
problem with the aircraft. Renters insurance will only pay if the
renter was at fault.

-Robert

[Blueskies]

> wrote in message oups.com...
> Howdy,
>
> I'm currently looking at trying to put my beloved 1963 Beech Musketeer
> under commercial insurance to offer flight instruction in, and rental
> of. It's either that, or sell it, as my partnership is dissolving. I
> have an airport that needs a small flight school, and has plenty of
> potential students, and a couple of independent CFIs who would love a
> plane to teach out of part-time. My problem is the insurance issue.
>
> I have sent out some requests for insurance quotes from various
> agencies, but nobody has gotten back to me, indicating to me that there
> aren't a lot of people beating down the door to insure a single-plane
> flight school. The airplane will be owned by an LLC, not by me
> personally, altho I own 95% of the LLC.
>
> The Musketeer isn't too valuable (even tho it's a great plane, and a
> fantastic plane to do training in, the hull value is only around
> $20,000.), but even with that low a hull value, this proposition
> doesn't make economic sense if the insurance is going to cost more than
> $3000 per year.
>
> So are there other CFIs out there offering instruction/rental of their
> own planes? How are you doing it? What is your insurance costing you
> per year?
>
> Is it an option to not carry *any* insurance on the thing, but require
> all students and renters to have renter's insurance, and all CFIs to
> have non-owned CFI coverage? I want to be responsible and be able to
> cover any damage done in the remote condition that something happens,
> but I don't see paying $6000 a year for coverage on a $20,000 airplane.
> Any ideas or suggestions?
>
> Thanks,
>
> Cap
>

I know a local CFI that pretty much stopped because to insure the Piper 160 and continue was going to be about $5000 a
year...

[Brian]

Insurance Kills many if not most attempts to rent personal aircraft
out. Unless you can fly the airplane at least 300 hours a year it
probably won't even break even.

Really the only options are:

1. Pay the Insurance and probably lose money at it when you can't rent
the airplane out an Average of 6 hours per week need to pay for the
insurance.

2. Charge so much that almost no one will rent the airplane.

3. Decide if you could take a $20,000 hit if the 1st person you rent it
to Totals it, If you can, then set some of the rental fee aside to
replace/repair the airplane if it does eventually get damaged. (Self
Insurance). At the current insurance rates if you have no claims the,
you may have set enough money aside after about 5-7 years to pay for a
replacement airplane.

a. requiring renter insurance will reduce you risk
but not eliminate it., This will significantly reduce the number of
potental renters.
b. you will have to/want to buy liability
insurance, it is relatively econimical and will protect you if the
airplane injures someone or damages other property.
c. there is no such thing as CFI Hull insurance
for non-owned airplanes, at least that I have found. Please let me know
if you find it.


4. The FBO leaseback option would reduce the insurance rate some, but
the plane is still going to have to fly a lot to make it worthwhile.
5. I am sure there are some other options.

Brian
CFIIG/ASEL

[Robert M. Gary]

There is CFI "hull" insurance. However, like renter's insurance, it
only pays when the CFI is at fault.

https://www.aopaia.com/cfi_insurance3.cfm

Optional Coverage - Limit of Liability (Physical Damage to non-owned
aircraft):
Per Occurrence Annual Premium
No Coverage 0
5,000 125
10,000 175
20,000 250
40,000 450
60,000 600
80,000 775
100,000 975
150,000 1,425

[[email protected]]

Blueskies wrote:
>
> I know a local CFI that pretty much stopped because to insure the
Piper 160 and continue was going to be about $5000 a
> year...

Yep. About 3 years ago, insurance rates for commercial operations
nearly doubled because of a shake up in underwriters. That put most
single plane/single instructor operations out of business. I remember
it because I was on a hiatus from my real job and was planning on
getting the CFI rating and providing training in my own plane. The
insurance issue killed that idea.

John Galban=====>N4BQ (PA28-180)