What happens if I let someone borrow my aircraft and they simply don’t return with it?

According to your policy, this is “conversion of property by a permissive user”, and it is not covered under aviation insurance hull policies (or automobile insurance policies either, for that matter). A permissive user is someone who operates your aircraft with your permission - a business partner, an employee, a friend who is a pilot, etc. If a permissive user converts the use of your aircraft for their own personal use and never returns it, this is not considered a theft.

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