Insurance Woes

Reading in this news group gives me a worry.
The problem is the suggested denial of any responsibility by the
insurance company if ANYTHING can be found to be non STPed, PMAed, or
XYZed, even tho it had nothing to do with the insurance problem.
I'm sure that a fine toothed comb going over my 79 Archer(that's 25
years of collecting things) will find something that was added that
'came from Radio Shack', etc.
Is my insurance coverage really meaningless?

Chuck

On 5 Dec 2005 15:51:52 -0800, "Chuck" wrote:

Reading in this news group gives me a worry.
The problem is the suggested denial of any responsibility by the
insurance company if ANYTHING can be found to be non STPed, PMAed, or
XYZed, even tho it had nothing to do with the insurance problem.
I'm sure that a fine toothed comb going over my 79 Archer(that's 25
years of collecting things) will find something that was added that
'came from Radio Shack', etc.

Is my insurance coverage really meaningless?

*I* have never purchased a policy that had those sorts of exclusions. But
that does not make me qualified to give any sort of opinion about *your*
policy. If you have questions about what your policy might or might not
cover, you should read it and review any questions with your insurance
broker. If that is not satisfactory, then you should either check with
your attorney, or switch to a policy that is easier to understand.


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

Chuck wrote:

Is my insurance coverage really meaningless?

IME, when there's a problem, insurance companies pay off without question. For
one thing, if they try to argue that an aircraft was unairworthy for some
nit-pick reason, they are well aware that some (and perhaps several) certified
professionals have signed statements to the effect that the aircraft was
airworthy at some point since the nit was installed. Doing that sort of thing
costs them money (lawyers aren't cheap), costs them business (brokers will avoid
them), and they will probably lose.

Now, if you crack up a 6 million dollar aircraft because you went well below
minimums on your third attempt to get into a field in IMC, you can expect an
argument from the company.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

Ask your independant agent about this. He works for you. My AIG policy
says that my plane must always be "airworthy" which I assume to mean
the same thing. In the cases I"m aware of people filing claims the
insurance company didn't ask too many questions. Pay quickly and get
out seems to be their mode of operating. There are some well known and
publicly talked about exceptions but certainly not the norm.

-Robert

There's a license agreement that the insurance companies have with your
state insurance commissioner. Certain clauses may be written into your
policy, but if they can't be too unreasonable, or the insurance company
can lose their state license.

The problem is the suggested denial of any responsibility by the
insurance company if ANYTHING can be found to be non STPed, PMAed, or
XYZed, even tho it had nothing to do with the insurance problem.

Yes, if you believe everything you read on the newsgroups, you might
get that idea. It's not right.

Generally the insurance will require that the airplane be airworthy,
and of course no GA airplane is ever really airworthy, in the sense
that a determined fed can always ground it. But here's the important
difference - an FAA inspector is, in effect, accountable to nobody. At
worst, he may have to prove his case before an ALJ, where he gets
certain privileges. For example, he gets to interpret the regulations
as he sees fit, and the ALJ must defer to him (there is precedent for
this). Also, he is not considered an interested party, and the
pilot/owner is, so if it's his word against yours, he is automatically
believed no matter what he says, regardless of how improbable it is.
And you can forget about bringing in a practicing A&P as an expert
witness - he will know better than to **** off the inspector who can
then go after him. So basically, if an FAA inspector says your
airplane isn't airworthy, you can't fight him.

The insurance adjuster doesn't play by the same rules. If the company
refuses to pay, the case goes to civil court. Since your airplane
presumably had an annual inspection signed off by an IA, who is in
effect a federal designee, it is presumed to be airworthy. He will
likely testify that it was airworthy. It is up to the insurance
company to prove it wasn't. In front of a judge (and jury, if you so
choose). Using normal rules of evidence. They're going to need their
own experts, an investigation where nobody will cooperate with them,
etc. Expensive.

Also, not everything that is written into a contract can be enforced.
It has to be reasonable. If the airworthiness discrepancy is unrelated
to the accident, the judge is not going to look kindly on the insurance
company trying to weasel out of payment on that basis. And a jury is
really unlikely to take the insurance company's side against an
individual in any case.

So basically the concers are overblown.

There are a few rare cases where claims were denied due to
airworthiness issues, but these were egregious situations - flight out
of annual, major AD's not complied with that contributed to the
accident, and in the case of experimentals major alteration made
without the required FAA approval and recertification (no longer
required). I really would not worry about a Radio Shack PTT switch in
your Archer causing you to lose insurance coverage.

Michael

nrp wrote:
There's a license agreement that the insurance companies have with your
state insurance commissioner. Certain clauses may be written into your
policy, but if they can't be too unreasonable, or the insurance company
can lose their state license.

I think you're confusing aircraft insurance companies with auto. None of my
brokers or underwriters were located or licensed by New Jersey.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

"George Patterson" wrote in message
news:zRslf.5545$Yh2.5393@trndny01...
nrp wrote:
There's a license agreement that the insurance companies have with your
state insurance commissioner. Certain clauses may be written into your
policy, but if they can't be too unreasonable, or the insurance company
can lose their state license.

I think you're confusing aircraft insurance companies with auto. None of
my brokers or underwriters were located or licensed by New Jersey.

George Patterson
Coffee is only a way of stealing time that should by rights belong to
your slightly older self.

I don't have a dog in this fight BUT, I believe nrp was talking about the
actual carrier not the broker.

George Patterson wrote:

nrp wrote:

There's a license agreement that the insurance companies have with your
state insurance commissioner. Certain clauses may be written into your
policy, but if they can't be too unreasonable, or the insurance company
can lose their state license.


I think you're confusing aircraft insurance companies with auto. None of
my brokers or underwriters were located or licensed by New Jersey.


Yes they are. You cannot sell insurance in any state without being
licensed in that state. You don't have to be located there but you do
have to obey the laws of the state.

So basically the concers are overblown.

There are a few rare cases where claims were denied due to
airworthiness issues, but these were egregious situations - flight out
of annual, major AD's not complied with that contributed to the
accident, and in the case of experimentals major alteration made
without the required FAA approval and recertification (no longer
required). I really would not worry about a Radio Shack PTT switch in
your Archer causing you to lose insurance coverage.

Michael

So common sense prevails. Good.

I haven't known anyone that had an aircraft insurance claim and
aircraft insurance is sure different that auto.

I've talked to agents and they say don't worry. But that is sorta like
the answer to the question "Will you respect me in the morning?" We
know what the answer will be tonight but it may just be different in
the morning!

Chuck