Aviation Insurance: The Negative Impact of Over or Under Insuring an Aircraft
Do you intend to hire an aviation insurance broker to help you estimate the current market value of your aircraft before going ahead to insure it to avoid the negative impact of over-insuring or under-insuring?
One of the things that make aviation insurance unique is that the coverage is written on an agreed value basis.
The value of the aircraft is determined at the beginning of the policy between the policyholder and the insurer and if the aircraft is eventually lost, the insurance company is expected to pay the agreed value on the policy.
One of the biggest mistakes aircraft owners make when it comes to insuring their aircraft is that they forget to check what the current value of their jet is each year just because they had already done that in the first year it was bought.
To avoid the consequences that come from over-insuring or under-insuring an aircraft, reliable aircraft insurance agents advise that you adjust the insured value of your aircraft to its present market value every time you need to renew your policy.
- What is Actual Cash Value of Your Car?
- Why Should My Credit History Count When Buying Car Insurance?
- How to Get a Low Interest Car Insurance Loan in the UK
An aviation insurance broker helps you evaluate your aircraft
An aircraft salesperson and an aviation insurance broker are the best people that can tell you what the current market value of your aircraft is.
With the help of the most recent blue book value, an aviation insurance broker can help you understand the current market value of your aircraft. This is the value a serious buyer is willing to pay for an aircraft that is on sale.
If you took a loan to purchase the aircraft, please, insure it at the outstanding loan amount, especially if it’s higher than the current market value.
How does aircraft financing work? Very simple. The borrower provides information about themselves and their prospective aircraft to the lender.
The Negative Impact of Over-Insuring or Under-Insuring an Aircraft
Beyond the impact the global pandemic has on the aviation insurance industry, there’s a whole new degree of negative impact if you over-insure or under-insure an aircraft.
One key thing every aircraft owner needs to know about aviation insurance is the impact over-insuring or under-insuring will have on them.
Nothing can be more heartbreaking than getting to know that an incident that happened to your aircraft was not covered or sufficiently covered by aviation insurance.
Normally, aviation insurance covers physical damage to the aircraft and all the legal liabilities that might arise as a result of your ownership of an airplane and its operation.
Some good examples of aviation insurance policies are:
- In-flight insurance
- Ground risk hull (non motion) insurance
- Ground risk hull (motion) insurance
- Public liability insurance
- Passenger liability insurance
- What is Tail Coverage in Business Insurance?
- Professional Indemnity Insurance Companies in Australia
- How to Get the Best Travel Insurance Policy in Australia
If you add a new avionics package, new or overhauled engine, or make new changes to your aircraft that increase its value, aviation insurance brokers advise that you also increase the insured value of your aircraft.