Fleet insurance covers a lot of different types of vehicles. However, did you know it can cover an aircraft? What Is Fleet Insurance for a Private Aircraft? Read below to find out…
Fleet Insurance for an Aircraft Intro
A lot is involved in owning a private aircraft. You spend the money to purchase it, then find a hangar to store it in, negotiate fuel prices, and so much more just to get it safely up in the air once in a while. But, while focused on checking off all the boxes on the to-do list, it is important to make sure that you don’t forget something crucial: insuring the private aircraft.
Think about it: We insure so many things – our health, our cars, our homes, our lives – so it only makes sense to protect private aircraft, too. This is especially important for those that are carrying passengers. But there are different ways to go about it. Ans, one that seems to stand out is fleet insurance – let’s talk about it.
The Importance of Insuring Private Aircraft
It is important to note that private aircraft insurance, although it insures the jet, is quite different from your car insurance – especially since there are many factors involved. You have a great number of liabilities when it comes to managing private jets. Everything including the storage hangar, movement on the ground, trouble in the air, and passengers on board can prove the benefits of having insurance on your private jet.
And although no state or federal laws exist that mandate aircraft insurance, the FBO your jet calls home likely does.
Your biggest questions should not be whether you need private aircraft insurance, but rather who you should get the insurance from and how much insurance coverage you need.
What is Fleet Insurance for Private Aircraft?
Owning a private jet is expensive which is why many jet owners team up with a charter company. These companies are usually already set up with things like hangar storage, maintenance crew, a team of pilots, and the like. They also have the capability of handling charter flights, including scheduling and services to pull it all together. Most pay the owner a percentage of each flight which, in turn, helps to offset the cost of buying the private jet in the first place.
This all has its advantage when it comes to insuring private aircraft.
As opposed to an individual policy that the owner purchases protect the aircraft, a fleet policy covers all the different aircraft that a charter company manages. In other words, they have one policy that lists all of the private jets that are insured. The charter company’s name is on the policy and they are responsible for the payment of premiums, reporting losses, and so on. But each particular owner is also listed in the policy, protecting them in situations where a loss occurs.
Perks of Fleet Insurance Policies
Are there benefits to joining a fleet policy rather than having your own as a private jet owner? As a matter of fact, yes – there are a few perks of doing so. And a few perks for the charter company, too. We will go over a few just to give you an idea of why this type of insurance policy should be considered.
- Perk#1: One policy covers an entire fleet. There is a lot of work that goes into owning, managing, and operating a private jet. Lots of paperwork, licensing, etc. So having one contract for one insurance policy makes life a lot easier for everyone involved. Underwriters even tend to prefer this option as it is easier to work with those who operate the jets on a daily basis and know what is going on.
- Perk#2: Qualifying for the best terms. Certain criteria must be met in order to qualify for some of the best terms in a private jet insurance policy. However, when it comes to fleet insurance, those stringent terms become a little more relaxed. That makes it easier to insure the aircraft with the best policy.
- Perk#3: Better rates. Because there are so many aircraft being insured under one policy, there is often a more appealing rate given.
- Perk#4: Develop a rapport with the underwriter. When you have a good relationship with the underwriter and he or she gets to know the charter operation – it makes it easy to make changes to the policies, such as adding or dropping an aircraft. Plus, any questions or concerns can easily be addressed as underwriters often have a greater sense of understanding of the account when it comes to those that are larger vs. individual accounts.
- Perk#5: Keep everything flowing. When you have one contact you work with, whether the underwriter or at the charter company, all communication can be handled easily. This makes administering this insurance policy much more pleasant to handle. So, renewals, policy changes, and more than charter companies may see as important can be taken care of easily – when a single owner may not have even realized it should be addressed.
What You Should Know About Fleet Insurance
As with all good things, there are some things you should look out for, too, as well as some things you should know about fleet insurance policies in general. This includes:
- Agreeing to a fleet insurance policy means the owner has no control over the policy – the charter company does. They are the ones that will select who to purchase the insurance from, the terms, and the coverage limits.
- Although the owner is listed as the loss payee, they don’t have any rights to negotiate settlements. Some owners may find relief in this while others may find it difficult to put that trust in someone else.
Wrapping Up Aircraft Fleet Insurance
As we have stated, private jets need to be insured in some way to protect against any liability. The choice and method of that insurance is going to be left up to the owner. For those who have an agreement with a charter company, looking into a fleet insurance policy could be one of the best decisions you can make concerning your private jet. With so many perks and so few disadvantages – it seems like a win-win for everyone involved. Just be sure to do your research first to determine the best choice for your situation.