HELP! I need somebody! ...to pay for the damages to my aircraft.
“Good morning! It’s a beautiful day for flying! The FBO is pulling the plane out of the hangar as we speak. We’ll do a pre-flight and should be in the air shortly.” Your passengers welcome your enthusiasm. During the pre-flight, you discover substantial damage to one of the ailerons and the flight has to be put on hold. You assume the FBO damaged the aileron while pushing the aircraft into the hangar after your last flight. As an aircraft owner/operator, you now have several types of losses on your plate.
- Direct Physical Damage to the aircraft
- Loss of Use
- Diminution of Value
- Incidental Damages
Direct Physical Damage to the aircraft is self-explanatory, so let’s explore the others. Loss of Use is a financial loss to the owner/operator as a result of not being able to use the aircraft while it is down for repairs. This loss can be especially burdensome to a working aircraft like one used in a charter fleet. Diminution of Value is the reduction in market value of the aircraft due to the new damage history. Incidental Damages is more of a catch-all. This could include financial losses such as the cost of finding your passengers transportation, renting spare parts, flight crew repositioning, etc.
So, how does the owner/operator get the expenses covered? First, let’s look at who is at-fault for these damages. The aircraft was damaged solely because of the FBO’s negligence in not using a wing-walker. The owner/operator had nothing to do with causing the damages. Therefore, this claim should be filed with the FBO’s insurance company. If this is the case, all the damages discussed above could be recoverable under the FBO’s liability policy, assuming they have the proper coverage and adequate limits. Unfortunately, the FBO has denied any negligence, there is no security camera footage, no evidence to prove they were responsible, and the FBO rejects your request to file the claim with their insurance company. Yes, I’ve had this happen. Your only option at this point, other than hiring an attorney and suing the FBO, is to file the claim with your own aircraft insurance company. Now, what is covered? The direct physical damage to the aircraft would be covered. Unfortunately, Loss of Use would not be covered on the primary aircraft policy. As for Diminution of Value, it is now possible to get this coverage endorsed on to an aircraft insurance policy, but it is not automatically included and only a few carriers offer it. Furthermore, only a certain percentage of the diminished value is recoverable and this endorsement is very expensive to add. Most aircraft owner/operators will not have this coverage in their policy.
As noted above, Loss of Use is not covered on your aircraft policy, but there is a way to ease the pain. One such way is to have Extra Expense for Renting Substitute Aircraft endorsed on to your policy. This coverage, like it reads, will allow you to be reimbursed for expenses you incur in renting an aircraft to use while your aircraft is down for repairs due to a covered loss. However, you will only be reimbursed for the extra expense that is over and above the normal operating costs of your aircraft. There is also a maximum daily limit and a maximum occurrence limit and/or number of days in which coverage is provided. Another expansion coverage that would be worthwhile to have in the example above would be Trip Interruption Expenses. This will allow you to be reimbursed for the reasonable expenses of food, travel and lodging for your passengers that were incurred from the place where the loss occurred to the intended final destination or back to the origin airport if the trip is discontinued. This coverage will carry a maximum limit for each passenger and each occurrence. You probably never even considered those expenses as a possibility, but they can certainly add up and every little bit helps.
In conclusion, if your aircraft is damaged at your FBO, the best way to be sure all damages are covered is by having the FBO file the claim under their liability policy. If this isn’t possible, there may not be a way to recover all your financial losses, but there are several ways your aircraft insurance agent can round out the rough edges in your policy. Just make sure you understand what is covered and what is not before you buy the policy.
Contact us today and one of our highly experienced agents will be happy to listen to your needs and act on your behalf to help you get the right coverage at the right price.
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