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Cancelling your insurance coverage after a loss. Good idea?

Your aircraft has suffered a gear up landing. Your insurance carrier has been notified and the repair of the aircraft is underway. You don’t have a lien on the aircraft with a bank, so you decide since the aircraft won’t be flying until repairs are complete, a smart move would be to either cancel the insurance, place the coverage on a ground not-in-motion basis, or maybe apply for a lay-up credit, all to save premium dollars.

Here are the reasons that’s not a good idea or not possible:

  1. Cancel your Insurance

    Some owners think since the aircraft is in a repair shop, the maintenance facility’s insurance should protect their aircraft. While the maintenance facility might have insurance, it only protects the maintenance facility for their liability if your aircraft is damaged by their negligence, not for acts of God [e.g. tornado]. If you cancel your insurance and a tornado collapses the maintenance hangar on your aircraft, their policy will not respond, and you are left with no insurance. 

  2. Remove Flight Coverage

    You’ve had a claim for which you paid an annual premium.  To save money, while your aircraft is being repaired, you ask the insurer to place your coverage on a ground not-in-motion basis. Your insurer will decline. You paid an annual premium for your coverage for which they are entitled until the claim is complete.

  3. Lay-Up Credit?

    If you have a corporate turbine aircraft, you more than likely have what’s called a lay-up credit under your policy. However, this only applies if your aircraft is down for extended maintenance, not a covered loss. In addition, the aircraft must be down a minimum number of days [30-45] before this credit would be applied.

This is one of many nuances in aviation insurance. If you are ever in doubt about any aspect of your coverage/policy, AssuredPartners Aerospace, AOPA’s partner for Aircraft Insurance can help guide you through the insurance process. Call (800) 622-2672 today to speak with one of our experts or visit today to learn more. We look forward to serving all your aviation insurance needs.

Topics: Insurance, Insurance, Corporate Partner

AssuredPartners Aerospace

As AOPA’s strategic partner for aviation insurance, AssuredPartners Aerospace, one of the nation’s largest aviation insurance firms, provides the absolute best insurance protection to fit your needs. Whether you’re flying your own airplane, renting, instructing, or running an aviation business, we have an unmatched depth of knowledge and resources driven by the desire to set a new standard for service and responsiveness. With more than 25 years’ experience serving pilots’ aviation insurance needs, our expertise has been developed over years of working closely with the nation’s best insurance carriers. We understand the exposures that make aviation insurance unique.