Journeys Non-Owned Aircraft ("Renters") Insurance Requirement Deadline 9/1/2020
Dear Journeys Pilot
First of all, I hope that all of you and your loved ones are healthy and safe during this Coronavirus world in which we find ourselves.
This is a long and complex post, but please read it carefully as it affects your ability to continue to rent aircraft at Journeys. In short, Journeys is requiring that you purchase non-owned aircraft insurance to continue flying our aircraft after August 30th.
As you probably have heard, there are many changes going on in the aviation insurance industry. With several underwriters departing the business line after an extended period of a soft market, losses in the aviation arena and several catastrophic losses outside of aviation - hurricanes, floods, fires and the like - the market has firmed up dramatically over the past year. What that means it that underwriters have the ability to both raise prices, and be more selective in who they take on or keep as customers. As you can imagine, this has had ramifications for Journeys Aviation that include both premium increases, and an increase in our deductibles.
Up to now the pilot agreements with Journeys have required that the renter pilot agree to be responsible for up to $1500 of damage to a fleet aircraft, but that will now have to be increased to address the changes in deductibles. We are preparing new Pilot / Membership / Renter agreements, and you can expect to be asked to sign the new version on one of your next visits to the airport.
Further, with regards to insurance, you as a pilot flying a Journeys aircraft should know that the insurance coverage that Journeys carries is for the benefit of Journeys Aviation, and does not directly cover the renting pilot. Damage to the aircraft above the deductible will be covered by the Journeys policy, but our underwriters have not waived their rights of subrogation against the pilot. What that means is that the insurance company still has the right to seek compensation from the renting pilot in the event of a loss.
Historically, the insurance companies haven't tried to subrogate against the renting pilot, but as mentioned above, the insurance industry is moving to a much more conservative position and the likelihood of subrogation has gone up significantly, particularly in the case of perceived renter pilot negligence. In addition, the Journeys policy covers Journeys in the event of a lawsuit. It does not cover you as the renting pilot in command for legal representation in the event that you should be named in a lawsuit.
To address this situation, and with the strong advice of our insurance advisors, Journeys will be moving to require all renting pilots, solo students and above, to have in force a non-owned aircraft (aka "renters") policy in order to fly a Journeys aircraft after August 30th, 2020. This type of policy covers the pilot renting an aircraft for the bodily injury and property damage to others, medical payments to passengers, and damage to the aircraft you are renting.
A non-owned policy also will provide you as renting pilot with legal representation in the event you are named in a lawsuit. Such a policy will cover you wherever you fly, not just at Journeys. You should know that other flight schools in the local area are also moving, or have already moved to require this kind of coverage. Frankly, in a world full of liability, a non-owned aircraft policy is a good thing for you to have.
Typically, you can choose the level of coverage for each of the three main areas of coverage. Journeys is going to require that renters obtain a policy with The following minimums by Sept 1, 2020:
$250,000 in Bodily Injury and Property Damage (Liability coverage)
$1000 in Medical Coverage
$25,000 in Aircraft Physical Damage
Please note that $25K Aircraft Physical Damage is not typically the minimum amount available for purchase, so please ensure that you choose a policy option that has the minimum coverage Journeys is asking for.
You should expect that such coverage will cost on the order of $325 or less per year. For an extra $24, you can double the liability coverage to $500K, so please evaluate the options and think about what coverage levels are cost effective.
Journeys recognizes that flying is expensive, and that requiring non-owned aircraft coverage only adds to the cost. To help mitigate the pain, Journeys is going to roll back the recent increase in the cost of Journeys Membership from $45 a month to the previous rate of $35 a month, which over a year should cover about 35% of the cost of the minimum insurance.
Journeys is prepared to help you acquire non-owned aircraft insurance here at the FBO terminal, and it can be done in about 5 minutes before a flight if necessary, but I urge you to get online and investigate your options. You may have memberships in various aviation related organizations that may offer discounts or other benefits, so please consider shopping around.
Here are some links to providers of non-owned insurance:
Southwest Aviation Insurance
Select Non-Owned Insurance at the top
As you might imagine, having to increase the cost of renting an aircraft is not something that we like to do, or take lightly, but unfortunately, the current environment has forced us to make these changes.
If you have questions, please don't hesitate to contact me or the front desk.
See you at the airport.
Andrew McKenna, President
Journeys Aviation, Inc.
9/16/2022 03:13:28 am
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You've probably heard that the aviation insurance market is undergoing significant transformations. The market has tightened significantly over the past year as a result of several underwriters leaving the business line following an extended period of slack market, losses in the aviation sector, and multiple catastrophic losses outside of aviation, such as hurricanes, floods, fires, and the like. I enjoyed it, and it's great that we've learned about so many topics that can help us all. Really appreciate your excellent blog.
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