An introduction to private aircraft insurance: Protecting your wings in the skies and on the ground

What coverages should I have?

Most aircraft owners and pilots consider insurance for two key areas — aircraft hull coverage and third-party liability insurance.  

Aircraft hull coverage:

Aircraft hull coverage is designed to cover the costs of repairs following damage to your aircraft, caused by accidents, hangar rash, or weather events like hail and windstorm damage. 

There are two main types of hull coverage available, based on whether your aircraft is in the air or on the ground and not in motion. 

• All risks ground and flight (in motion): The more comprehensive option, this coverage offers protection while the aircraft is in motion or not in motion, both in the air and on the ground. It includes collision coverage, as well as coverage for physical damage to the aircraft caused by accidental external impact while the aircraft is on the ground.  
• Ground risk hull (not in motion): This option provides coverage for physical loss or damage sustained by your aircraft while on the ground or moored and not-in-motion, or while in transport by another vehicle. It does not apply when the aircraft is on the ground and moving under its own engine power, such as while taxiing.  

Additionally, hull coverage usually includes cover for equipment that you use in your aircraft, such as headsets, portable or handheld avionics, and safety or emergency equipment. Nearly all policies will also provide cover for other types of losses, such as the cost of removing wreckage or relocating your aircraft following a forced landing off-airport.  

Most aircraft hull policies are subject to a deductible — an amount you are required to contribute to a claim submitted. Deductibles will vary depending on the aircraft value, make, and model, as well as pilot experience.  

Aircraft liability insurance:

Liability coverage is required for every aircraft in Canada. There are two types of liability — public liability and passenger liability — but most aircraft policies comprise both types into one single liability coverage called a combined single limit.  

Public liability is required by law. The legal minimum limits required depend on the aircraft’s maximum take-off weight. Public liability provides protection if your aircraft damages the property of others and covers bodily injuries caused to people outside of your aircraft.

Passenger liability is designed to respond to costs associated with injuries or death to passengers. As an aircraft owner or pilot, you are extremely likely to be held legally responsible for these events. Costs associated with injuries, medical treatment, loss of income, and court-awarded settlements can make the financial value of your aircraft seem small by comparison. 

Your liability coverage is also designed to respond to the costs of retaining legal defense counsel if you face legal action from third parties as a result of an aircraft accident.

Non-owned aircraft insurance: 

For private pilots operating someone else’s aircraft, some insurers offer non-owned aircraft liability insurance. These policies provide protection for private pilots in cases of accidents or damage caused while they are operating rented or borrowed aircraft. If you currently own and insure a private aircraft, you may already have this coverage included as an extension on your policy or can have it added on. Alternatively, you may be able to purchase a standalone non-owned aircraft liability policy. Be sure to consult with your insurance provider for exact details on your available options for non-owned aircraft coverage.  

While aircraft owners will typically have aviation policies in effect to cover liability and hull damage, these policies may not extend their full coverage to you. As the pilot, you may be held legally liable for damage to the aircraft or for damages caused to passengers or property. 

The conditions and amounts of cover provided by non-owned aircraft liability insurance vary significantly. Insurers typically offer the following coverages: 

• Non-owned aircraft liability: This coverage is designed to cover the costs of property damage and injuries caused to others, and, depending on the policy, may also include passenger liability. In addition, it helps pay for legal defense fees for any covered claims if pilots are sued. 
• Non-owned aircraft hull liability: This coverage protects individuals when they are legally responsible for the physical damage of an aircraft that they rent or borrow. It can also provide coverage for repair costs or pay a hull deductible for the rented or borrowed aircraft that the aircraft owner might hold you responsible for.

Who is covered to fly my aircraft?

On policies with the ability to extend coverage to pilots other than the policyholder, pilots typically must be named on your policy by your insurer as approved pilots. When you are applying for insurance, make sure you include the details of all pilots flying or training on your aircraft. Pilots holding a valid flight instructor rating are also approved by insurers for the purpose of providing dual instruction, to you or other pilots named on your policy. 

If your aircraft is being ferried for maintenance or sale, make sure the ferry pilot is covered by your policy. The same applies for post-maintenance test flights. Contact your insurance broker beforehand to make sure you have the right coverage in place.  

You may also be able to add an open pilot warranty onto your policy. This enhancement covers any pilot who meets the insurer’s minimum pilot qualifications and experience to operate your aircraft.  

Will I be covered for flights outside of Canada? 

It largely depends on your insurer and the coverage you have. Some policies may extend coverage beyond Canada and the lower 48 US states to nearby territories such as Alaska, Mexico, and the Caribbean. Review your policy with your broker to understand the geographical limitations and ensure you have the necessary coverage for your intended destinations. 

How do I apply for private aircraft insurance? 

When applying for private aircraft insurance for the first time or renewing an existing policy, you will be expected to submit an application where you will be asked information about yourself, your aircraft, and how you will use it. You will also need to include pilot histories for each pilot flying or training on your aircraft. For renewals, make sure you update the application each year to include accurate pilot information and amend the agreed hull value to account for any upgrades completed.  

After you have submitted your completed application, your broker and insurer will review it and provide you with a formal quote for the policy befitting your needs.  

Private aircraft insurance is a vital aspect of owning or renting an aircraft in Canada. By understanding the nuances of coverage, private aircraft owners, pilots, and student pilots can better protect themselves and their aircraft. 

For more information and expert guidance on private aircraft insurance and risk management, contact Marsh — a leading global insurance brokerage with specialist expertise in the aviation industry.