Solo/Rental Insurance - Insurance Co. subrogation rights

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I am a middle aged student pilot that is nearing my first solo. The
flight school I am training with is a small school that provides
excellent individualized training however they do not have an
insurance program that covers their students. I am debating on
whether I should obtain renters insurance (liability and hull
deductable coverage)at some point in time. I understand that there
are two issues that I should be aware of in case of an accident
which are having to pay the flight school's insurance deductable and
the possibility that the insurance company could could seek
reimbursement from me (subrogation rights) to recover any claim that
it would pay. I have heard that the insurance company seldom does
this and only in situations of gross negligence by the pilot.
However at this point I probably have accumulated enough assets to
be worth suing. The insurance through AOPA is about $1250 ($750 for
$1MM personal liability and $500 for $10,000 deductable coverage. If
the risk of being sued is so low then I would expect the insurance
cost to be lower and more comparable to that of fixed wing. I would
appreciate hearing about any real life experiences with insurance
companies and any other thoughts of those with far more experience
than I have in aviation.

-- Kevin Ridings, July 22, 2010


Having just returned to renting I bought the AOPA $1M liability policy for non-owned aircraft. In my case it was about $200 so it's hard to pass up. Personally I would skip the deductible coverage as it seems a little high for the protection you get. If you plan to continue your training mostly with an instructor aboard then I wouldn't worry as much since the Instructor will be considered PIC if anything happens.

-- Alex Baker, July 23, 2010

Under a typical FBO/flight school rental policy, you are covered as an unnamed pilot. You would lose this coverage only if you misrepresented yourself in some way. For example, if you lied about your medical.

You would be responsible for the deductible, which is typically $15,000 or may be a percent. The FBO/flight school should be able to tell you, show you the policy, or have you talk to their insurance agent.

I am not sure how subrogation by the FBO/flight school's fleet policy would apply. You are covered by the policy when you rent. There may be some kind of gross negligence exception, as you said.

Your primary exposure is if you are found responsible for more than the policy's limit (typically $1M). You are responsible for the judgement. The insurance company pays the judgement against you only up to their limit.

For example, if a person dies as a result of your negligence and a judgment against you is found for $5M, the FBO/flight school's policy will pay $1M. If you buy a secondary policy, they will pay $1M. You are responsible for the remaining $3M.

In other words, the supplemental policy really helps you only if you are found responsible for more than $1M but not more than $2M.

-- Todd Ramming, July 23, 2010

My flight school is requiring renter insurance and advised students & renters of the following:

Flight school insurance does not provide protection for the pilots who rent aircraft. The flight school and their aircraft are covered by their insurance company. However, if a student or renter damages the aircraft the insurance company can to try to recover damages from the student or renter. A flight school can also seek recover damages from the renter instead of their insurance company to avoid a possible insurance rate increase.

Quoted rates were $509 for $250,000 of liability protection and $40,000 of property damage coverage

or $1,069 for $250,000 of liability protection and $100,000 of property damage coverage.

The higher property damage limit is nice, but that liability limit sure seems low!

Comments on rates and options?

-- Richard S, July 23, 2010