Student Pilot Insurance: The Top 5 Reasons Why You Need It

When you are just starting out as a student pilot, insurance is the last thing on your mind. You are focused on other variables like deciding what flight school to attend, comparing pricing, and coming up with a plan to finance the training. You are also getting your medical certificate process started and are starting to study for the written test.

All of that is time-consuming enough without throwing the confusing question of insurance into the mix. If you do happen to consider insurance, you probably assume that it is already taken care and you are covered through your flight school or the fixed base operator (FBO)’s policy since you don’t own the aircraft.

This may be the case, but more often than not, there is a large gray area that you could find yourself caught in should you be involved in an accident while you are a student pilot.

It may not be a fun topic but look at it this way – aircraft are expensive to repair and replace. Your life and the lives of other pilots and passengers are also valuable and expensive. Knowing this, it clearly makes sense to do the smart thing and learn about student pilot insurance so you can make an informed decision on your coverage options.

You may wonder where to start, but don’t worry – you don’t have to navigate this complex topic alone. Today we are going to do the background legwork for you.

Let’s get started by addressing the first burning question most new pilots have when the topic of insurance is raised.

Do student pilots need insurance?

If you’re like most of us, you are probably skimming through the FARs right about now looking for some sort of official mandate on insurance needs for student pilots. *Spoiler alert* - you’re not going to find it. The FAA’s official rulebook is silent on the topic of student pilot insurance.

Great – so it’s not required and we don’t need it, right? Well, not so fast. Although neither the FAA, federal laws, or most state laws mandate insurance for student pilots, all that means is that it is not legally required. Just because something isn’t legally required doesn’t mean that we don’t need it.

It’s not legally required that you look both ways before crossing the street, but you do it, right? Why? Because it is the smart thing to do and you see the need for it whether someone else forces you to do it or not. The same is true of student pilot insurance.

We are used to insurance being legally required for motorized vehicles like cars, but aviator insurance is similar to mariner insurance. For both planes and boats, the governing authorities and the U.S. government itself aren’t involved.

That means that the answer to the question about whether you as a student pilot need insurance will ultimately be up to you, and that is what this article is all about – helping you to answer that very important question.

Why do I need student pilot insurance?

We’ve established that you aren’t legally required to carry student pilot insurance, but most pilots and industry professionals agree it is a wise idea. Why is that?

To help you make your decision, here are the top 5 reasons for getting student pilot insurance:

1.      Dangerous subrogation clauses

Don’t know what a subrogation clause is? Most of us don’t, but as someone who is about to fly an airplane you don’t own, it is time to learn.

A subrogation clause is a sneaky add-on that may be included in your flight school or FBO’s insurance policy. This type of clause means that the person or company who carries the insurance policy is covered, but that their insurance company can turn around and come after you to re-coup the costs of damages/injuries.

Under this clause, the aircraft owner also has the right to collect the amount of the insurance deductible and loss of use costs from you. If you have no insurance, you could be legally responsible for paying these costs out of pocket.

Find out if the person or company whose aircraft you are flying has a policy with a subrogation clause. If they do, you would be wise to have your own insurance policy to cover you.

Some (but not all) policies will allow the policy owner to amend their contract and add a “Waiver of Subrogation” stating that the insurance company and aircraft owner both agree to waive their right of subrogation and not come after you to recoup their expenses.

2.      A fixed base operator may not lease you an aircraft without insurance

There may be no legal requirement for you to have your own insurance policy when renting an aircraft, but FBOs can establish their own requirements that are more conservative. Many FBOs have elected to look out for both themselves and you by simply requiring any pilot who is renting an aircraft to have renter’s insurance.

Check with your FBO to find out what their insurance policy is.

3.      Even being a named pilot on someone else’s insurance policy doesn’t cover you

It’s easy to think that you are fully covered if you are listed as an “approved” or “named” pilot on the aircraft owner’s liability insurance policy.

This is a murky topic and we can quickly go down a rabbit hole with it, but the gist of the issue is that since insurance companies operate on particulars, the details matter and you may fall into a legal loophole if you are not named as an “insured pilot,” “additional insured,” or “named insured.”

You can be an “approved” or “named” pilot but still not be insured. How does this work? AOPA goes into more detail on the pitfalls of being a named pilot on someone else’s insurance policy, but the quick breakdown is this:

When an accident takes place, the insurance company looks at who was piloting the aircraft at the time and whether that person was approved under the policy or not. Approval can be as specific as your name being listed or as generic as your meeting a set of experience and certification qualifications that the policy lays out. If there is an accident and the pilot wasn’t approved, then no one is covered because the terms of the policy have been breached.

You were approved or named, so the policy’s terms weren’t violated, but here’s where things go sideways for you – all you being a named or approved pilot did was to confirm there was no contract breach so that coverage could be provided to the named insured which is…not you. You could still end up not covered and be subject to subrogation. This may mean paying the deductible, loss of use costs and any other amounts the insurance company or policy owner have to pay out up front.

4.      Your coverage amounts under your school’s policy may be too low

Even if you are covered under a renter clause of your flight school’s policy, the coverage is likely to be minimal. Ask to take a look at the actual coverage levels and consider whether they are high enough for your comfort.

Remember that in a worst case scenario, even if you are a young pilot and don’t currently have many assets to your name, in the case of a lawsuit, a portion of your future earnings could be garnished if you are found personally liable and lack the insurance policy to cover yourself.

5.      Your school’s policy may have liability limitations that expose you to risk

Another potential pitfall with believing you are fully covered under your flight school’s policy is forgetting to read the details on the liability limits. For example, are you covered if you cause damage or injury on the ground or are you only covered while in the air? Having your own policy can help close these potential gaps in coverage.

How much does pilot insurance cost?

Now that you understand why you need insurance, the next elephant in the room is cost, so let’s address it.

When shopping for coverage as a student pilot flying an aircraft you do not own, you will be shopping for what is called “renter’s insurance.” Potential insurers will also ask what type of craft you intend to fly (i.e. – single engine land, multi engine land, rotorwing or seaplane/amphibious). When they first start out, most student pilots will be looking for single engine land coverage.

You will notice that there are 3 types of coverage:

• Bodily injury liability
• Property damage liability
• Hull

The two liability coverages are often lumped together, and the hull coverage is separate. Your insurance provider will likely offer liability only plans as well as plans that include hull coverage. The standard recommendation is that you carry as much coverage as you can reasonably afford. The pricing for each type of coverage will depend on the coverage level that you choose.

For reference, AOPA, one of the main insurance providers, offers renters combined liability coverage amounts ranging from $250,000 to $1,000,000 at listed rates of $86-$220 per year for non-members or $81-$209 per year for members.*

Hull coverage rates with AOPA are listed at $99-$1,900 per year for non-members and $94-$1,805 per year for members with coverage amounts from $5,000 to $200,000. *

As you can see, this means that your total yearly costs with AOPA would average out to between $185 and $2,120 as a non-member or $175 - $2,014 as a member.

That’s about $15-$175 a month.

*Rates are current as of December 2019 and AOPA advises that they are subject to change. AOPA is merely one of your options and is used here as an example. There are many other companies to choose from. AOPA’s inclusion in this article does not constitute an endorsement by Pilot Mall.

What is non-owned aircraft insurance?

As you begin looking into your insurance options, you may come across the phrase “non-owned aircraft insurance.” “Non-owned aircraft insurance” is usually used synonymously with “renter’s insurance” to mean coverage that protects you while you are flying an aircraft that is not legally yours whether you are renting or just borrowing it.

What does renter’s/non-owned pilot insurance cover?

Now that you have a rough idea of what your insurance will cost, you undoubtedly want to know what will be covered.

Bodily injury liability coverage covers physical injury to you, your passengers, and potentially other people outside your aircraft that occurs as a result of your operation of a non-owned aircraft.

You may see total occurrence coverage amounts and individual passenger sub-limits for both types of liability coverage. This means that, for example, you could have a $250,000 per incident bodily injury and property damage liability coverage, but the coverage for each passenger maxes out at $25,000. That means that if you had one passenger and their medical bills exceeded $25,000, you could still be held liable for the remainder of their medical bills even though your per occurrence coverage was $250,000.

Property damage liability coverage covers property damage to others’ property (but not damage to the non-owned aircraft which you are flying).

Hull damage coverage covers damage to the non-owned aircraft you are flying. It may also cover its loss of use and the amount of the owner’s insurance deductible.

How can I lower my pilot insurance rates?

If you are familiar with how car insurance pricing works, you will be well-prepared to understand some of the variables that impact pilot insurance prices.

Besides getting discounted rates by becoming a member of certain organizations like AOPA, you may also find that rates are lower and/or it is easier to get coverage if you:

• Are flying certain aircraft (good news – most common trainer aircraft have lower rates)
• Have logged more hours as pilot in command (this doesn’t help you when you’re just starting out, but it is something to look forward to as you gain experience)
• Haven’t been involved in an aircraft accident/incident or an aviation insurance claim
• Don’t have a conviction on your record for operating an aircraft or a motor vehicle while under the influence of drugs or alcohol
• Haven’t had your pilot’s/driver’s license surrendered, suspended or revoked
• Haven’t been cancelled, declined or refused for another aircraft insurance policy

Note that some of the above circumstances may bar you from obtaining coverage if they occurred within the last 36 months.

How do I get student pilot insurance?

As with car insurance, you will want to do a bit of leg work and compare the policies of several companies before choosing one. You can also ask your flight school instructors and other pilot friends what insurance company they use and if they are happy with it. Check out online reviews and any Better Business Bureau complaints to round out your research.

Then contact your top couple of companies to get a personalized quote so you can make a final decision. To get you started, two commonly used companies are AOPA and Avemco.

What questions should I ask when shopping for student pilot insurance?

• Does your bodily injury liability coverage apply only to passengers inside the aircraft I am operating, or does it apply to persons outside the aircraft as well?
• Am I only covered in the air, or am I covered on the ground too?
• Is legal defense coverage included/offered?
• Does this policy cover loss of use of an aircraft?
• Do your plans include coverage for the deductible on an owner’s insurance policy?

Final Thoughts

Although it’s not legally mandated, when we consider the rationale for protecting ourselves from the liability of flying without insurance, it just makes sense to get our own policy.

As students, we are just learning and may be even more prone to making the type of pilot error mistakes that lead to accidents. This means that we can benefit from the best, most comprehensive coverage possible. Shop around, look for recommendation, and ask intelligent questions so you can pick out the plan that is best for you.

With everything else that we have on our minds as a student, a robust non-owned aircraft insurance policy will give us peace of mind so we are free to focus on flying.