EVERYTHING YOU NEED TO KNOW ABOUT PRIVATE JET INSURANCE
Written By Dylan Anderson | 01.01.23
As with buying a car or home, finding proper insurance is essential to buying a private jet. If something damages your aircraft, like a weather event or an operational error, you need insurance to help you cover the costly repairs. Insurance helps you limit the risk of financial liability-not to mention that it is required to operate your jet.
However, due to the sheer value and potential risk of a private jet, the process of finding insurance is a bit more complex than it is for a car or home. By understanding what to look for, you can ensure that you are covered if anything goes wrong.
What Is Aircraft Insurance?
Owning an aircraft is expensive, and seemingly minor issues can quickly become large or costly ones. Like car or home insurance, aircraft insurance provides financial protection in the event of an emergency or incident.
You can choose from several types of coverage, from liability insurance to ground protection insurance. Just like other forms of insurance, you are expected to pay a premium in order to gain coverage up to a certain amount in the event of an incident. Do I Need Private Jet Insurance? Yes, incidents are rare, but not having insurance in just one rare event could end up leaving you with massive financial liability and extensive regret. Insurance provides valuable peace of mind every time you fly.
Not only is it a good idea to have insurance, but it is also required by law if you are flying your aircraft. Whether you use your aircraft for personal or commercial purposes, federal regulations mandate that you and your plane are insured.
How Much Is Aircraft Insurance?
When buying a private plane, you should budget aircraft insurance as an essential operational expense. However, the amount that you end up paying for insurance depends on a variety of factors, making it difficult to budget without all of the information.
The type of aircraft you purchase is the largest contributor to the amount that you spend on your insurance. Generally, you can expect to pay between 12-15% of the cost of your aircraft on an insurance plan. That cost can then change depending on your coverage amounts and what situations you are covered for.
Similar to other forms of insurance, the price also depends on potential risk factors surrounding your aircraft. The amount you pay for your premium can change depending on the age of the plane, its safety record, the experience of the pilot, and how the aircraft is stored. Of course, the greater the risk, the higher the price. You can save on your rates by using an experienced pilot, increasing your pilot training, or flying more often to build skills.
Altogether, insurance rates can average anywhere from around $10,000 to $500,000. However, insurance is its own marketplace, with providers competing to provide the best rates. Therefore, taking the time to explore rates can work in your favor and allow you to save.
What Does Aircraft Insurance Cover?
Aircraft insurance is not as simple as quickly selecting a plan, as there are many factors to consider before you do. There are several types of insurance coverage that you can decide on as an aircraft owner to cover you in a range of different scenarios. The following are the most common types of coverage. You have the option of choosing select options or getting full coverage, depending on your policy.
Liability insurance provides coverage in the event that an operational error leads to injury or property damage. This option provides coverage for damages up to a certain amount, typically anywhere from $100,000 to $1 million. The coverage may provide a limit per incident or per passenger, depending on your policy.
Liability is probably the most crucial coverage as it helps mitigate your financial risk in an at-fault incident and sometimes even provides coverage for legal assistance.
Stationary Ground Risk Hull
Stationary coverage covers your aircraft against damage that occurs while the plane is grounded and not in motion. This coverage may apply in the event of a fire, vandalism, weather damage, and other possible risks.
Taxiing Risk Hull Insurance
As the name implies, this option insures your aircraft during taxiing on the ground. It can protect you in the case of accidents or collisions with objects on the runway or other aircraft. Once you take off, this coverage no longer applies.
This option provides coverage in the event that an incident occurs while in the air. This coverage can protect against in-flight damages, like collisions with objects. Not all policies cover in-flight damage, so be sure to verify your policy.
How To Shop for Aviation Insurance when Buying a Private Jet
As you shop for aircraft insurance, you should assess each plan for the type and degree of coverage it provides. Be sure to consider the risk factors that can come into play for your aircraft and what scenarios you may need coverage for the most. You should determine whether you need full coverage or just the basics and how high your coverage limit should be.
An essential part of finding the right insurance is exploring rates from different companies. You can simplify the process by talking to an independent insurance agent. An experienced agent can help provide valuable insight, helping you determine what you need from your insurance while helping you navigate the market.
Complete Your Aircraft Management
Aircraft insurance is essential for aircraft owners, helping to protect them in the event of an incident. To learn more about options for aircraft insurance, contact Jet Agency. Our 24/7 concierge service is here to help you with all your private aviation needs, and we are happy to help direct you to the right resources.
Remember that finding insurance is just one part of owning a private jet. Aircraft management is an involved process, from fueling and staffing your aircraft for trips to finding a place to store it in between. Jet Agency is proud to be your partner in aircraft management, providing extensive experience and an unparalleled commitment to safety. Contact Jet Agency today to discuss your options.
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