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 into this section of the previous newsletter. Although rare, now and then we hear of lessors/lessees or buyers/sellers making deals amongst themselves in regards to insurance. This is a very precarious 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.
A definitive claim scenario for this would be a buyer operating an aircraft where 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 is turned over to another party, whether by lease or by sale, the granting party no longer has an insurable interest in the aircraft. Therefore, any coverage they have in place does not apply to the accepting party and cannot be offered up as a consideration.
We’ve 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 have been much worse had the accepting party not yet placed their coverage. The moral of the story is don’t agree to or offer anything based on assumption. Insurance considerations without something in writing from an agent are like walking on thin ice. Just like 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.