Insurance and expired qualifications

[BobTurner]

THIS WAS POSTED elsewhere and asked to be moved, so here's a new thread:
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This is huge thread drift, but...

Almost every time you damage your airplane you violated a FAR.

There's no FAR that says you must keep a logbook of every flight, just ones that relate to your privileges (BFR, credit for currency, etc).

When I got insurance once for a club airplane I specifically asked: "What if someone flies it and their medical is expired?" I was told the plane was still covered.

So while they can ask for documents, can they really deny coverage just because a logbook entry was missing? Isn't that like saying your car insurance is void if the registration is lapsed?

Anyone have the language from a policy that makes this level of documentation clearly required for a claim?

[Correct...that is huge thread drift. Please take any replies to these questions to a new thread. Thank you. ; S. Buchanan]
Last edited by Sam Buchanan : Today at 04:20 PM.
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The answer to the question is that it depends on state law. For example, in some states coverage can be denied if you let your medical lapse. In others, they can only deny coverage if your lapsed medical was relevant to the loss. However, in the example discussed here, it was not a "lapsed license"; he never had one. If the application was substantially falsified, pretty much every state would allow the insurance company to deny coverage.
So it's in the insurance company's best interests to NOT check applications. If it's falsified they still got the premium, but they won't pay out for a loss.

[az_gila]

Originally Posted by BobTurner

.....
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The answer to the question is that it depends on state law. For example, in some states coverage can be denied if you let your medical lapse. In others, they can only deny coverage if your lapsed medical was relevant to the loss. However, in the example discussed here, it was not a "lapsed license"; he never had one. If the application was substantially falsified, pretty much every state would allow the insurance company to deny coverage.
So it's in the insurance company's best interests to NOT check applications. If it's falsified they still got the premium, but they won't pay out for a loss.

Which state?

The state the policy is written in?

The state you reside in?

or the state the crash is in?


When I lived in CA and had glider insurance with a company that failed, it was OH law that counted for the refund I finally got.

[BobTurner]

Originally Posted by az_gila

Which state?

The state the policy is written in?

The state you reside in?

or the state the crash is in?


When I lived in CA and had glider insurance with a company that failed, it was OH law that counted for the refund I finally got.

This is exactly why there are lawyers....

[N941WR]

I knew as soon as I posted my comment in that other thread, someone would jump on it.

I had passengers in the plane with me, and even though I was on a taxiway, they will look for any reason to not pay. So, by seeing that I had logged the appropriate three take offs and landings in the prior 90 days, they couldn't avoid the claim with that tactic.

[Kyle Boatright]

Originally Posted by N941WR

I knew as soon as I posted my comment in that other thread, someone would jump on it.

I had passengers in the plane with me, and even though I was on a taxiway, they will look for any reason to not pay. So, by seeing that I had logged the appropriate three take offs and landings in the prior 90 days, they couldn't avoid the claim with that tactic.

You were not exercising your pilot privileges. You were taxiing. Not sure what your policy says, but there are no currency requirements or certificate retirements to taxi an airplane. Nor or there airworthiness requirements, etc. Sounds like your insurance company was just collecting its standard data, regardless of the fact that much of it was irrelevant in your case.

One of my airport buddies works for an aviation insurance agency. We've talked about insurers trying to nit-pick customers to avoid payment. Her comment was that unless a discrepancy (e.g. not having a medical) was causal in the accident, her company is going to pay, and it will probably pay even if the discrepancy was causal. So (for instance) if you're grounded for a heart condition and crash an airplane because you can't handle a crosswind, they are going to pay.

Just like with an automobile. Insurers insure autos based on an underwriter's bet that the drivers of a particular auto aren't going to drive under the influence (which of course would be illegal). If one of them does have an accident while DUI, the company still pays.

[Icarus]

Originally Posted by Kyle Boatright

You were not exercising your pilot privileges. You were taxiing. Not sure what your policy says, but there are no currency requirements or certificate retirements to taxi an airplane. Nor or there airworthiness requirements, etc. Sounds like your insurance company was just collecting its standard data, regardless of the fact that much of it was irrelevant in your case.

One of my airport buddies works for an aviation insurance agency. We've talked about insurers trying to nit-pick customers to avoid payment. Her comment was that unless a discrepancy (e.g. not having a medical) was causal in the accident, her company is going to pay, and it will probably pay even if the discrepancy was causal. So (for instance) if you're grounded for a heart condition and crash an airplane because you can't handle a crosswind, they are going to pay.

Just like with an automobile. Insurers insure autos based on an underwriter's bet that the drivers of a particular auto aren't going to drive under the influence (which of course would be illegal). If one of them does have an accident while DUI, the company still pays.

"Pay"… Sure they may "pay"…they may also subrogate. If you or another party are negligent in the operation of a vehicle, many can and will seek to limit the fiscal impact on the company by going after that responsible person.

Your friend who works for the insurance agency most likely sells or manages policies…with an answer like that I would almost guarantee he doesn't underwrite them. Or he wouldn't be in business for very long.

The very simple truth is this; insurance companies need to make money. If they are paying out on every policy…they aren't making money. If the aircraft was under way with the intent of making a flight, it would indeed need a qualified PIC.

If we as pilots are doing the right thing (we are, aren't we?) we have nothing to worry about with our insurance policies.

[Jordan1976]

Originally Posted by az_gila

Which state?

The state the policy is written in?

The state you reside in?

or the state the crash is in?


When I lived in CA and had glider insurance with a company that failed, it was OH law that counted for the refund I finally got.

I assume the failed company was based in OH? Just like you buy a product from a company in OH and they go bankrupt before shipping it, the laws surrounding that are the OH laws. Of course, a failed company has nothing to do with a claim being paid out.

You have a contract with your insurer. That contract lays out requirements for both parties. Just because the contract was written in OH while you lived in CA and an accident occurred in AZ doesn't matter. Unless of course the contract states that it does matter...

[Jordan1976]

Originally Posted by Icarus

The very simple truth is this; insurance companies need to make money. If they are paying out on every policy?they aren't making money.

If we as pilots are doing the right thing (we are, aren't we?) we have nothing to worry about with our insurance policies.

Paying out on every claim is not paying out on every policy. You can easily be a successful insurance company paying out on every claim that involves a verifiable loss.

Basically every NTSB accident report finds the pilot somewhat at fault for an accident. Why does insurance every pay out if it doesn't pay unless you were doing the right thing and almost every accident involves a pilot doing the wrong thing?

[az_gila]

Originally Posted by Jordan1976

I assume the failed company was based in OH? Just like you buy a product from a company in OH and they go bankrupt before shipping it, the laws surrounding that are the OH laws. Of course, a failed company has nothing to do with a claim being paid out.

You have a contract with your insurer. That contract lays out requirements for both parties. Just because the contract was written in OH while you lived in CA and an accident occurred in AZ doesn't matter. Unless of course the contract states that it does matter...

I think it's a bit more complicated than that since states have specific inter-state agreements.

The company was Ohio General and the insurance was though a Soaring Society of America group 'discount'.

I found this very old posting about the event from a SSA web site -

That's because you happen to live in Ohio. Had you lived in Kentucky or
Virginia, or the 20 or so other states which weren't covered by a guarentee
fund, you would not have gotten your money back. Then you might not have thought the service had been so good.

I did get a refund for the unused premium but it came a decade later.