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How Insurance Polices for a Privately Owned Aircraft Work

Many large and small businesses may find the need for extensive travel of their personnel and may find it more cost effective to obtain their own private aircraft instead of flying a commercial airline for their business travel.

When a business or even an individual decides to take on the responsibility of owning their own aircraft, they should take the extra step and insure the aircraft as well. Unlike commercial airliners where liability insurance is required, privately owned aircraft does not always have to carry liability insurance. The determination will often be made based on the way the plane is used (private purposes or commercial purposes) or state law.

When you have been injured while on a private aircraft for any purpose, getting compensated for your injuries is no easy task. Understanding the different insurance issues that you may encounter and understanding the differences between dealing with a private aircraft owner versus a commercial airline will help things go a little smoother.

However, even an understanding of the overall process may not be sufficient for you to be successful in your claim. If you find this to be the case, please contact us as we have the experience to handle your claims against the owner of private aircraft where you sustained your injuries.

Questions Answered on This Page:

  • How does insurance on a privately owned aircraft factor into a personal injury case?
  • How does an insurance policy on a privately owned plane work?

Insurance Policies: Private Planes versus Commercial Airline Fleets

Insurance policies on commercial aircraft vary greatly from the insurance policies available to private aircraft owners. Commercial airlines face federal insurance requirements whereas private aircraft owners do not, commercial airlines will have more financial resources available to them if an accident occurs that many private aircraft owners will, and the way claims with a commercial aircraft insurer are handled will probably be different from the way an insurer of a private aircraft will handle a claim.

These differences just scratch the surface and others may need to be considered as well. However, having a general understanding of these differences will be helpful if you have been injured in an aviation accident with a privately owned aircraft.

The Federal Aviation Administration requires that commercial airlines carry liability insurance to cover any injuries that the passengers they transport sustain while on the commercial aircraft. This is typically called Passenger Liability Coverage. Because large commercial airlines have so much risk that must be covered, the National Aviation insurance Agency classifies the type of coverage they need as 121 Coverage. 121 Coverage is usually spread out among several insurance carriers by agreement because the risk involved is too great for one insurance carrier to handle alone. These policies will tend to cover the value of the commercial aircraft as well as provide liability coverage.

However, with commercial aircraft insurance policies there may be a gap in coverage that must be covered before the policy will apply. In many instances the commercial airline has to satisfy a certain portion of a claim before the funds available in the insurance policy can be touched. When this is the case a plaintiff may have to deal with both the commercial airline and its attorneys as well as the commercial airline's insurance carrier and their attorneys.

Conversely, privately owned aircraft are not subject to the same insurance requirements as commercial airlines. If insurance is required for private owners, it is usually a determination made by the state they reside in, considers the usage and size of the aircraft, and the determination will vary from one state to the next. Generally speaking corporations that own their own aircraft will recognize the importance of liability insurance and the risk involved with not having coverage, but many small businesses or individuals may not.

If the private aircraft is not used very frequently, the aircraft is an older model, or the owner themselves is a licensed pilot, they may not feel the need to have insurance coverage on their private aircraft. Even if the small business or individual does have insurance coverage, they may opt for a "bare bones" policy because of the cost involved. With these kind of policies, the damage amounts an injured plaintiff can recover will usually be capped at a smaller amount than with a claim filed against a commercial airliner.

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There is also the issue of multiple plaintiffs to consider. As mentioned above in the commercial airlines insurance section, because of the risk involved with commercial airlines multiple policies will be spread across multiple carriers to provide the coverage they need. This helps to insure that there is enough coverage available for the amount of plaintiffs that could arise from an aviation accident involving a commercial airplane.

When dealing with the insurance policy of a privately owned aircraft, multiple plaintiffs can be an issue. If more than one person is injured in the aviation accident a small policy amount will mean that there may be a "race to the courthouse" because the person to file a claim first will have the best chance at a larger portion of the policy amount. For example, three people are injured in an accident with a privately owned airplane.

The owner has insurance but the policy offers coverage of $500,000 per accident. If Passenger A has $300,000 in damages, Passenger B has $100,000 in damages, and Passenger C has $150,000 in damages, there is not enough coverage to go around. However, if both Passenger B and Passenger C files their claims and settles for the full amount of their damages with the insurance company, there is only $250,000 left available to cover Passenger A's damages. When dealing with the insurance coverage the owner of a private aircraft will carry, low policy amounts are a common occurrence.

Our Texas Plane Accident Attorneys Can Help

When a Texas aviation accident occurs and insurance claims are filed by the injured victims, the insurance companies will bring in their attorneys to handle the case even in instances where the case is not going to trial. If the privately owned aircraft is insured, odds are there will be an attorney for the insurance company involved with the case.

The types of insurance defense attorneys that the insurance companies have on staff or will hire as outside counsel will specialize in insurance or aviation or both. They will be very adept at both the law and the technical aspects surrounding an aviation accident, will know what expert witnesses will need to be hired, and will work very hard to limit or eliminate their insured's liability for your injuries. Because aviation and insurance law are their specialties, these attorneys will very difficult to handle and come to a reasonable settlement with if you do not have your own counsel protecting your interests.

Jury Perceptions and Private Aircraft Accidents

In every jury trial the jury's perceptions of both parties will be a factor. When a person is litigating their claim against a small business owner or an individual, the jury's perceptions may have an even bigger impact.

As mentioned earlier in this article, many private plane owners are small businesses or individuals. This kind of defendant might be more sympathetic to a jury because of this. Our country is one that celebrates and encourages entrepreneurial endeavors and small businesses. A jury may see a small business getting sued as unfair and may be less sympathetic to your claim. Whereas if the defendant was a large commercial airline with multiple insurance policies and vast financial resources to deal with your claim, the jury's perceptions would probably work more in your favor as an injured victim. They do not see your law suit hurting a large corporation the way a law suit could hurt a small business or an individual.

When an individual or small business is being sued juries tend to identify more with them on a personal level and thus can envision themselves in the small business owner's position more readily and may find it harder to find in your favor or award the damages amount you are seeking. Obviously this will not always be the case because juries vary just as individuals do, but it is something to be mindful of when dealing with an accident and insurance policy of a privately owned aircraft.

Litigating any claim can be difficult to do effectively on your own. Litigating an aviation claim is even more so. If you have been injured in a Texas airplane accident involving a privately owned aircraft you may need assistance navigating through the process of dealing with the aircraft's owner, their insurance carrier, and the insurance carrier's attorneys. You can contact us to help.

Call Grossman Law Offices:

The experienced personal injury attorneys at Grossman Law Offices have over 25 years of experience handling cases like this. We've handled literally thousands of personal injury cases, and we're confident we can put you in the best possible position to win your claim. Give us a call at (855) 3260-0000.

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