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CFI Insurance

Discussion in 'CFI Corner' started by pavelump, Nov 28, 2003.

  1. pavelump

    pavelump Well-Known Member

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    I've begun looking for a CFI job and I'm a little confused about what sort of insurance I would/should have and how much coverage is average. If I am "covered" under a flight school/FBO's policy, do I even need it?

    I was looking into insurance through AOPA, but if anybody knows of a better(cheaper) alternative, let me know.

    Here's AOPA's rates:

    Bodily injury and property damage liability limit is required coverage. The required liability coverage provides protection against claims for Bodily Injury and Property Damage that may occur during your operations of a non-owned aircraft. Damage to the non-owned aircraft is not covered but you can purchase that additional coverage from the optional coverage section below.

    Liability
    Limits (each occurence/ per passenger / annual premium

    $ 250000 / $ 25000 / $ 200
    $ 500000 / $ 50000 / $ 350
    $ 500000 / $ 100000 / $ 500
    $ 1000000 / $ 100000 / $ 650

    Optional Coverage for damage to non-owned aircraft
    This coverage provides you protection against claims for damage to the non-owned aircraft, including its loss of use. This coverage is optional and can only be purchased if Bodily Injury and Property Damage Coverage above has been purchased.

    Coverage Options
    Limit of Liability / Annual Premium *
    $ 5,000 / $ 125
    $ 10,000 / $ 175
    $ 20,000 / $ 250
    $ 40,000 / $ 450
    $ 60,000 / $ 600
    $ 80,000 / $ 775
    $ 100,000 / $ 975
    $ 150,000 / $ 1425

    Dave
  2. MidlifeFlyer

    MidlifeFlyer Well-Known Member

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    [ QUOTE ]
    I've begun looking for a CFI job and I'm a little confused about what sort of insurance I would/should have and how much coverage is average. If I am "covered" under a flight school/FBO's policy, do I even need it?

    [/ QUOTE ]Glad you put the word "covered" in quotes. Insurance contracts are extremely technical legal documents and unless you (can) read one you do not know whether you are protected (and to what extent) or not. It happens, and is even common is some areas, but based on other discussions on the subject, it's generally rare for a CFI to be protected under an FBO policy. The FBO policy may have bought coverage to protect itself from something that you do wrong, but that is =very= different than a policy that protects =you=.

    CFI insurance is essentially non-owned aircraft insurance (sometimes called renter's insurance although it covers much more) with a rider that covers your CFI liability exposure

    The cost tends to run about $100 more than the equivalent non-owner policy. [ QUOTE ]
    Here's AOPA's rates:

    Bodily injury and property damage liability limit is required coverage. The required liability coverage provides protection against claims for Bodily Injury and Property Damage that may occur during your operations of a non-owned aircraft.

    [/ QUOTE ]If this is all it says on liability, are you sure that you are looking at an instructor policy? This looks like standard non-owned aircraft language. I don't see anything about liability arising out of "flight instruction"

    NAFI offers a decent CFI policy through Falcon Insurance
  3. Michigan_Flyer

    Michigan_Flyer Well-Known Member

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    Do be careful out there. A lot of CFI's are flying around uninsured, and they do not even realize it. If you are working for a FBO, flight school, or flying in a privately owned aircraft, you need a piece of paper from their insurance company stating that you are a "named insured" instructor for that airplane. If you are flying with a private owner in his airplane it is probably not insured for "commercial operations", which flight instructing is, even if you were doing it for free. As a CFI, you can be held liable for anything that happens in an airplane, even if you were just riding along to get a $100 hamburger-even if you were in the back seat at the time! As long as you are rated to fly that plane, it is your butt (and pilot certificate) on the line.
  4. TheWife

    TheWife New Member

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    What about when you are renting as a student?
  5. Michigan_Flyer

    Michigan_Flyer Well-Known Member

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    During any dual instructional flights, I believe the instructor has 100% of the liability. Of course, during solo flights, the student has liability. It might be good to get a copy of the insurance policy and try to understand it. A lot of policys primarily protect the FBO or flight school, and the renter can be left holding the short end of the stick, especially if ANY type of negligence can be shown.
  6. MidlifeFlyer

    MidlifeFlyer Well-Known Member

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    [ QUOTE ]
    As a CFI, you can be held liable for anything that happens in an airplane, even if you were just riding along to get a $100 hamburger-even if you were in the back seat at the time!

    [/ QUOTE ] Show me that this is not just an urban legend (unless you are talking about the time a group of three CFIs decided it would be a great idea if the all climbed into an airplane and CFI-1 flew under the hood, CFI-2 acted as safety pilot, and CFI-3 gave "instruction" from the back seat so that they could all log PIC).
  7. Cosmo1999

    Cosmo1999 Well-Known Member

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    I disagree with this post. If an instructor and a student are doing a flight lesson and the student crashes with the instructor at the CONTROLS then I can see a problem for the instructor. However if the instructor is just a passenger how can he be held liable for what goes on up front? If there is an appropriately rated pilot up there flying then its the PICs fault if anything happens not the passengers. Thats what you are when your sitting in the backseat not logging time is a passenger. You arent even required to have your ticket with you on that flight so I dont see how you could be nailed on this one. Its not as bad as its made to sound. As long as the instructor covers all his bases and stays within the boundaries of the regs and the PTS any silly mistake that the student or private pilot makes is his own fault as long as the instructor did his job. You cant be held liable however when your not even logging the time nor acting as flight instructor. I will admit however lawyers can be pretty tricky. I dont even think Johnny Cochran could convince a jury or a judge that a guy sitting in the back of a plane is responsible for an accident when he doesnt even have access to the controls and is just a passenger at that time! Now if the CFI in the backseat is logging the time as dual given then its a big problem.
  8. pavelump

    pavelump Well-Known Member

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    [ QUOTE ]
    If this is all it says on liability, are you sure that you are looking at an instructor policy? This looks like standard non-owned aircraft language. I don't see anything about liability arising out of "flight instruction"

    NAFI offers a decent CFI policy through Falcon Insurance


    [/ QUOTE ]

    Yeah, that's from the CFI rates page. Here's the link that I got it from: http://www.aopaia.com/popuprates_cfi.cfm

    So here's a couple questions for you CFIs who ARE insured.

    How much liability insurance do you carry and do you also carry the non-owned aircraft coverage as well? And if so, how much?

    I have no idea of what a good/proper amount of coverage would be. I imagine that if I were to call the insurance company, they would say the max available...
    I'll give Falcon a call, but as of yet I'm not a NAFI member and I'm not so sure that I'm going to shell out the cash for it yet. But that's a different discussion...

    Thanks,
    Dave
  9. pilot602

    pilot602 If specified, this will replace the title that

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    Insurance can be a double edged sword. If you carry a lot (or sometimes just at all) you make yourself a larger target for a lawsuit. Usually lawsuits go where the money is and in hte case of flight instruction it would normally be the FBO. If you are running around with $10million in insurance guess who is going to be named along with the FBO. I'm not advocating going without insurance but it's something to consider when purchasing it.
  10. pavelump

    pavelump Well-Known Member

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    Well, from what I've heard it works in this way:

    Say you're instructing at an FBO and your student accidentally hits the tail of another airplane parked on the ramp while taxiing (with you in the airplane). Or you make an emergency landing in a farm field because your FBO's airplane sucks and you end up running into Farmer Jones' cow, turning it into hamburger.

    First, the FBO's insurance will cover the damage (up to their limit). Then, their insurance company will come to you to sue you for the amount that they just paid out.

    If you're not covered, then you're fked. Seems like a lot of passing the buck (no pun intended), but that buck's gotta stop somewhere...

    Of course I could be wrong or over-simplifying the situation, but that's why I'm asking... [​IMG]

    Dave
  11. pilot602

    pilot602 If specified, this will replace the title that

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    [ QUOTE ]
    First, the FBO's insurance will cover the damage (up to their limit). Then, their insurance company will come to you to sue you for the amount that they just paid out.

    [/ QUOTE ]

    But if you're making $7/hr (adjusted for hourly rate yadda yadda yadda) they can sue all they want but where is the money going to come from?

    Insurance, and lawyers, have ruined GA and it's only going to get worse. I mean really (in best Austin Powers voice) do we really need a placard in new 172s that tells us improper operation of the aircraft can result in death?
  12. MidlifeFlyer

    MidlifeFlyer Well-Known Member

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    [ QUOTE ]
    Yeah, that's from the CFI rates page. Here's the link that I got it from: http://www.aopaia.com/popuprates_cfi.cfm

    [/ QUOTE ]Ah. I see it now it's the part that says
    ==============================
    Coverage is extended to a loss or occurrence arising from your professional malpractice as respects dual flight instruction, flight services, or a check ride conducted by you in a non-owned aircraft
    ==============================

    [ QUOTE ]
    How much liability insurance do you carry and do you also carry the non-owned aircraft coverage as well? And if so, how much?

    [/ QUOTE ]How much to carry is a compromise between what's available, how much risk you think there really is and how much risk you are willing to tolerate.

    I'll give you an example of the thought process that might apply to Hypothetical Harry's decision to carry the $500K per occurrence, $100K per passenger flavor of liability.

    Harry only flies and teaches in 4-seat airplanes. He sees his highest legal risk as involving an accident in which he is in the airplane, whether as an instructor or not (remember the policy covers you when you fly someone else's airplane, even if it doesn't involve instruction), involves th other people in the airplane. $100K is kinda low for the types of injuries that can take place in a crash, but that's all they will give him to cover injuries to the other people in the airplane. So that's a real maximum of $300 ($400K if I'm not in it) for the people in the airplane. Anything extra will apply to people or property injured on the ground. Harry thinks that the chances of that happening are pretty low, so an extra $600K or $700K to cover that contingency isn't worth the extra $100 to him.

    On the hull portion, Harry mostly flies and teaches in rental aircraft. They tend to be older models and he figures he's not likely to total any of them, so he's not going to spring for even the full cost of the airplane. So, he asks a few mechanics what happens when they have to tear down an engine because of a prop strike and chooses $10K as his balance point.
  13. TheWife

    TheWife New Member

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    [ QUOTE ]

    But if you're making $7/hr (adjusted for hourly rate yadda yadda yadda) they can sue all they want but where is the money going to come from?

    [/ QUOTE ]

    Yeah but you will still have a judgement or award against you which will affect your credit and future income for years.
  14. Michigan_Flyer

    Michigan_Flyer Well-Known Member

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    I have not found any proof of this in writing. However my boss at the flight school I work for tells me that she personally knows of three cases where a CFI riding in a back seat has been sued and found negligent for a crash that happend while the were in the back seat of an airplane that they were rated for. She is very much involved with the aviation insurance industry. I will try to research this further when I can find the time. I do agree that lawers and insurance are really putting the hurts on GA.
  15. MidlifeFlyer

    MidlifeFlyer Well-Known Member

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    [ QUOTE ]
    I have not found any proof of this in writing.

    [/ QUOTE ]I'm not surprised. You might check further. It doesn't have to be in writing. Some certificate actions never get further than the FSDO when an agreement is reached. But details are necessary (so we can decide whether the "passenger" was busted for doing nothing but going for a ride as a passenger. And "my friend knows this guy who said that his third cousin twice removed once dated a girl who's ex-husband told her about..." doesn't count.

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