Preparing for Takeoff: Make Sure You’re Insured
I sold my aircraft and told the buyer that I’d keep insurance on the ship until he can get his own. He told me he’d get his next week and let me know when I can cancel mine. We’re good to go, right?
This issue ties back to this section in the previous newsletter. Although rare, every now and then we hear of lessors/lessees or buyers/sellers making deals among themselves in regard to insurance. This is a very dangerous area to wade into, because a handshake deal between two parties may not carry over to insurance. In other words, just because one person offers something and the other accepts, doesn’t mean it’s spoken into existence.
The obvious claim scenario would be a buyer operating an aircraft after the seller says he’ll keep his coverage in place for a few extra days. That’s not how it works. Once title or care/custody/control are turned over to another party, whether by lease or by sale, the granting party no longer has any insurable interest in the aircraft.
Therefore, any coverage the granting party has in place doesn’t apply to the accepting party and can’t be offered up as a consideration. We’ve actually had this situation come up in a claim scenario, and it was the difference in who paid the claim and which carrier was involved. It could’ve been much worse, though, had the accepting party not yet placed their own coverage.
The moral of the story is this: don’t agree to or offer anything on the basis of assumption. Insurance considerations without something from an agent in writing is like walking on thin ice. You wouldn’t buy an aircraft without having a mechanic look it over.
Don’t fly an aircraft without having an insurance agent tell you you’re covered.