Search

Saturday, 28 June 2014

Types of Aviation Insurance

Aviation Insurance refers to the coverage of risk related to Aviation. Aviation Insurance differs significantly from other types of the transportation insurance policies. There are different further kinds of aviation policies which will be discussed in detail later on in this article. First aviation insurance policy was issued by Lloyd’s of London in 1911 but stopped issuing aviation policies in the year 1912 due to heavy insurance claims they had to honor for flight crashes caused by bad weather. First aviation policies were underwritten by Marina Insurance Underwriting Community.



Aviation Insurance involves Huge Costs
When we talk about Aviation Insurance, we actually talk about airplanes of billions of Dollars. No single company has enough resources to absorb the risk of a single major airline or even a larger portion of it. This is the reason; most airlines are co-insured by two or more than two insurance companies. Number of co-insurers for an airline is determined by the size of the co-insurers as well as size of the airline.



Types of Aviation Insurance
  1. Public Liability Aviation Insurance refers to the insurance of public at large. In case of crash landing or plane crash, it will fell down at some area and destroy the area at large. It may destroy houses, farms, factories and other property. So, public liability aviation insurance covers the airlines for such kind of damages. It does not cover the loss of plane itself. It is just to compensate the victims of such event. Public liability aviation insurance is compulsory in most of the countries and it covers the claims up to $5 million per incident.
  2. Passenger Liability Aviation Insurance covers the passengers in the airplane in case of accidents. If passenger is injured or killed in some accident, passenger liability aviation insurance pays some compensation to the legal heirs of the person in case of death and to himself in case of injury. It is generally sold by the airline on the basis of number of occupied seats in an airplane. Cost of the insurance is included in the cost of ticket when you purchase it. However, event of Insurance Fraud has happened before when a passenger killed the pilot and whole plane was crashed causing death of all the passengers. Motive of killing the pilot was that the passenger wanted to pay insurance money of $210,000/- per passenger to his wife.
  3. Combined Single Limit Aviation Insurance covers Public Liability Aviation Insurance and Passenger Liability Aviation Insurance in single Insurance and sets the upper cap of the claims which can be made in case of each accident. Obviously, insurance premium of this kind of insurance is less than the combined insurance premium of two independent insurance. However, it has been seen that they are more comfortable in paying the injuries and deaths of passengers than paying for the third property damages.
  4. Ground Risk Hull Aviation Insurance Not in Motion covers the aircraft when it is on ground and not in motion. You will be thinking why do we need such kind of insurance but the fact is that considering the huge cost of airplanes, it is necessary to insure it everywhere. Ground Risk Hull Aviation Insurance Not in Motion does not cover the airplane when it is going towards runway to take off or coming back from the landing to its place. This kind of insurance covers the events as fire, theft, vandalism, flood, mudslides, animal damage, wind or hailstorms, hangar collapse or for uninsured vehicles or aircraft striking the aircraft. Recent attacks in Pakistan on an airport caused the damage of the airplanes. However, these planes were covered under Ground Risk Hull Aviation Insurance Not in Motion, so Pakistani International Airlines claimed the insurance money from the insurance company.
  5. Ground Risk Hull Aviation Insurance in Motion covers the airplanes when it is in motion but not flying. It also does not cover the landing and taking off from the airport since it is covered in In Flight Aviation Insurance. If you are carrying the plane from one hanger to another due to any reason, it is covered in Ground Risk Hull Aviation Insurance in Motion. This insurance has been discontinued by many insurance companies due to the difficulty of establishing the fact that plane was going to take off or moving from one hanger to another when incident took place. 
  6. In Flight Aviation Insurance covers all the losses of airplane from the time when plane moves from hanger to take off position to the time it is landed on ground and reaches back to its position in hanger in another airport. Naturally, this is more expensive than above two insurance policies since most of the planes are damages when they are in motion.

0 comments:

Post a Comment

Facebook

Follow us in Google+