Insurance and instructors!

[bob turner]

Oops! I just became aware of what is happening when a student needs an instructor sign-off for his/her insurance.

First, do not take the student's word for it. They often get it wrong. Get it in writing from the insurer. If your student believes you signed him off for insurance reasons, and something happens that allows the insurer to claim that he was not properly signed off, you may be at risk.

Second, a very sharp master CFI hereabouts demands, from all students, that he be named insured, with a waiver of subrogation, and with a statement of what the insurer needs for a checkout. He demands that all that come from the insurer.

There are some pitfalls in that one - named insured automatically cuts your liability limits in half, and I am surprised his students (all wealthy by definition) put up with it, but he has no lack of customers. But his point on the waiver of subrogation was subtle and valid - an insurer can and will go after an instructor for expenses in excess of the policy limit!

Insurers charge my students for the waiver - they do not charge my friend's students, because he has syllabi on file. Nevertheless, this is something to be cautious about.

Why do I bring all this up? My buddy said he needed a 25 hour checkout. I thought it unreasonable, and checked with the insurer. I got two different answers, but in the end it was the instructor that needed the 25 in make/model. Then another student came to me saying he needed fifty hours of instruction. I spoke to the agent, and she said, no - 50 total tailwheel, and 35 in type. We gave him ten, and the insurer covered him for an additional $300 - cheap, compared to instructors at $70-$100/hr (the going rate around here). So if you instruct, you owe it to your student to check - make sure!

All opinion, of course.

 

[eaglepilot]

Insurance is a dark science, and it bears a thorough investigation before you launch in the aircraft-as instructor or student or PIC.

Thanks for this

 

[bob turner]

The agent just informed me that there is a difference between named insured and additional insured. You must be on the aircraft ownership papers to be a named insured, therefore, instructors should be additional insured (not "named"). If there is any functional difference between those two, I will report back Monday. I think they do this on purpose to confuse. Opinion.

 

[aktango58]

Named insured means that the policy will cover if you are flying

Additionally Insured means that what ever happens, (you signed the guy off) the company will defend you...

If you sign SteveE's log saying that he is competent to post actual pictures, and someone sues him for illeagally getting on their yatch, and in the hoohorah the find you did a signature so they sue you also, Additionally Insured will protect you.

If you are only Named insured, unless you helped SteveE doctor his false, and completly fake and untrue ManCard, you would have to defend yourself; But if you were in assistance you would be covered...

:lol: :lol:

Clear as Mud?

 

[aalexander]

The agent just informed me that there is a difference between named insured and additional insured. You must be on the aircraft ownership papers to be a named insured, therefore, instructors should be additional insured (not "named"). If there is any functional difference between those two, I will report back Monday. I think they do this on purpose to confuse. Opinion.

Interesting, I wasn't aware of that distinction. The important thing is that you are an "insured". That means that you are protected by the insurance policy. Being an approved pilot, whether by name, or by meeting an open pilot clause (meeting the experience requirements) doesn't do anything to protect you that just means that the insurance company will not refuse to pay off the owner because of a non-approved pilot, they may still turn around and sue you for their loss. This is called "subrogation"

 

[bob turner]

Yep.

But I am not so sure of Mark's "additional insured" definition. As I understand it, the only insurance available that protects you after you sign off a student and he/she messes up solo is the NAFI policy. At least that is what Avemco told me.

Hearsay and opinion.

 

[mvivion]

Actually, the Society for Aviation and Flight Educators (SAFE) is a relatively new organization for flight instructors and aviation educators that also offers instructor insurance, and in my experience, at least, for less money than does the NAFI insurance.

Some of us parted company with NAFI over their treatment of two Board Members who were the heart of that organization. SAFE was created as a member-centric organization, run by and for the members.

Visit the SAFE web site at: http://safepilots.us/

MTV

 

[sj]

Mike, are you sure that is the website? It says it expired on 8/13/2010...

The whole insurance this can be very confusing!

sj

 

[sj]

here is the real link... http://www.safepilots.org/

 

[mvivion]

oops-sorry, just grabbed the link out of my favorites...

MTV

 

[Stealthchicken]

It's been awhile, but from my distant memory of commercial and marine policies . . .

1. The named insured owns the policy, and is responsible for the premiums, accident reporting, etc. The additional insured is typically extended most of the protection afforded by the policy, but he's not the owner. Differences in coverage between a named insured and an additional insured might include, for example, attorney's fees for the defense of a claim. (Read the policy!)

2. If you're a named or additional insured under the policy then you've already got a waiver of subrogation. The insurer can't sue his own insured to recover the insurer's loss.

3. The liability policy limits remain the same regardless of the number of insureds, although all the insureds (including the additional insured) typically have equal claim to them. (Read the policy!) Assuming the usual million dollar liability limit, this shouldn't present a practical problem in most cases (unless, e.g., you fly into a bus full of freshly graduated physicians). But if it's a concern then one could likely purchase non-owned liability insurance solely to cover third parties.

4. I'd think it very unlikely that being an additional insured would cover you for negligently signing off a piss-poor student, simply because an additional insured can't have coverage greater than the named insured. Get a policy for yourself that specifically covers this risk.

 

[bob turner]

I agree with a lot of that.

But my impression changed about the waiver of subrogation after talking with my buddy (who is a true professional) - he demands the waiver, and he says that stops the insurer from going after him for expenses they might have after passing the limits. Insurers now routinely do that for his students.

I carry renter's insurance to a million bucks - but it is no good when I instruct. Therefore I carry NAFI insurance to a million bucks, too. Costs twice as much, which says something about the risks of being a CFI.

MTV is on the right track, above, but so far California CFIs do not have access to the insurance he mentions. Apparently it is coming.

And "additional insured" may well still have a million liability, but it is split in half for practical purposes - those new physicians will sue you both, and your insurer has only a million total - may not be enough.

Still opinion.

 

[hondacubber]

On a bit of a different vane, are any medical expenses cover by insurance after an accident? My understanding is the pilot is not but the passenger is. If it is a training flight is the instructor covered?

 

[bob turner]

As I understand it, only the hull is automatic - the rest is stuff you have to sue for. Some policies have a medical payments portion, but I doubt they pay for the pilot or instructor. Do you not have personal medical insurance? If not, you should be supporting single payer. Still opinion.

 

[n40ff]

"If not, you should be supporting single payer. Still opinion."

Yea, get in line and wait to die.

another opinion

 

[tamarack]

Very interesting thread!

1. We have had two prop strike accidents involving flight instruction in an insured aircraft in the past several years where the flight instructor was sued by the insurer for the damages. Both cases were settled out of court, both instructors quit instructing, sold their airplanes and bought boats.

2. Another insured accident sent the flight instructor to the hospital for three days, no medical coverage for the instructor.

3. Our flight school insurance covers only the passenger for medical. Not the flight instructor, it is assumed that workmen's comp. would cover the instructor's medical. A solo student or solo pilot is not covered for medical because that person is not a passenger.

Has anyone been in a position as a flight instructor involved in an accident? It would be very interesting to hear first-hand experience right from the "horse's mouth."

Vickie

 

[mvivion]

The ONLY way a flight instructor is ACTUALLY covered in an instructional accident is if he or she carries instructors insurance. You can buy liability only, or liability and hull.

And, those policies also MAY protect the instructor from litigation later, if the student screws up later and comes back at the instructor.

Even if you're named insured, additionally insured, etc....you can still be sued in many different ways.

Which of course is why so many experienced pilots refuse to instruct these days.

MTV[/i]

 

[bob turner]

The right thing to do is to be informed. Know what risks you are taking. Too many pilots just trust the insurance company to do the right thing.

The waiver of subrogation will stop the insurer from sueing you. NAFI insurance will cover you, even after you step out of the aircraft, as will (hopefully) the insurance MTV mentioned above.

Instructing - particularly in taildraggers - is a very satisfying experience, if not very remunerative. I intend to keep doing it, but I am going to be far more careful in the future.

 

[kase]

I was just starting to enjoy instructing but now you guys got me afraid to sign anybody off.

 

[SteveE]

Kase ole Buddy,,,, the shirt tail,,, not the WHOLE BACK... :lol: :lol:

You need to recruit her this winter....