One of the first things I knew I needed for the plane was insurance. My experience with insurance has been only a step beyond anecdotal, because my husband happens to take care of most of our policies. It’s true. I’m one of those women – the one that just says “OK, dear,” and is happy she doesn’t have to deal with it. The one exception is health insurance, in which case I manage which company plan we choose, and any associated billing. But in that case, you aren’t really “shopping” for health insurance – you’re more making a choice between vanilla and chocolate for whatever your company provides (unless you’re like my family growing up – in which case we didn’t have health insurance. . . but that’s another story).
Why purchase insurance?
Apart from the obvious reasons:
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I found it interesting that you are not required to have insurance on aircraft that you own in most states. That’s right: you have to have insurance to drive a car, but not to fly a plane. (Ummm. Yeah). But in this case, the plane was a company asset, and I was going to rent it – so I need to get some insurance for my prized posession. It’s important to clarify just what the purpose of insurance is for an aviation business: it’s for the company’s protection in the event the aircraft is damaged during the course of doing business. Basically, I needed to protect the company from the customer: the renter.

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In the event of an accident in which my C-182 was damaged, Aerial Aviation would file a claim on the policy, the insurance company (we hope) would pay the claim, the aircraft would be repaired and go back into service.
Faced with needing to purchase insurance for such an critical asset as a plane, I was at a bit of a loss. Let me tell you what not to do first.
1. Do not google “plane insurance” – the result is a cacophony of results, all of which tell you they are the best, and none of which tell you how they are better than others.
Not that I did that.
2. Do not attempt to arbitrarily select different groups from said google search for quotes, just to get a variety of responses. This takes a lot of time, and you often end up talking to random, not terribly helpful people.
I mean, I would never do that either. . . (ahem).
Now let me tell you what to do.
Do get some suggestions from friends/colleagues
Do figure out the policy the plane used to be operating under, and start from there.
AOPA Insurance Agency. The policy was lapsed for over a year. Which means if a rock hit it, Aerial Aviation would be shelling out bocu bucks, instead of the insurer.
Do consider your business plan for the period of insurance.
Hmmmmmm.
Upon talking to Ray at AOPAIA, I quickly discovered I needed to think through how best to spend the company’s money. I wanted some type of policy that would cover the plane, and let it be flown, but a regular rental policy was expensive.
I suddenly realized why most companies develop business plans early on. Business plans help you, well, plan out your actions – how to incur expenses, off-set costs, develop revenue sources, and a timeframe for all of this. Of course, since there was no financing of the plane, I’d never had to justify my plan to anyone other than my supportive spouse. What, exactly, was my plan? I thought through how to make the business run the first few years at the lowest cost, while I attempted to get some cash flow. I quickly considered my assumptions for renting the plane (aka how much it would be flown).
Assumption 1: Full loss in 2010 = not much flying
Assumption 2: Partial loss/break-even in 2011 = some flying
Assumption 3: Make profit in 2012 = full flying potential
With these assumptions/goals in mind, I determined to develop a better notion for getting a customer base up and running in 2011. One option would be to develop some sort of a training program that was essentially an “intro to aviation” – more than the “Discovery Flight” most of us go on to get a feel for the plane, this would be a full day of understanding the airplane/flight environment – and perhaps I could figure out a way to have multiple students use the plane at a given time. If I was to go that route, I’d need a more comprehensive insurance policy at some point in 2011.
But, for 2010, I just needed something basic: I went with a limited policy that took the plane out of general use. I had just 4 names on the policy, with the possibility of adding one more, and AOPAIA knew the backgrounds of each pilot. We could use it for pleasure or business: personal use only – not for hire/services (e.g., an instructor couldn’t take students up in it, and someone couldn’t rent the plane to transport goods/passengers for fee). Considering how little I anticipated the plane being used in 2010, this made a lot of sense.
In 2011, I’ll have a chance to change the policy to something more comprehensive – but that will be based upon building the customer base.
Funny how a something as mundane as insurance should jumpstart the thought process. . . for now, I’m just happy that Aerial Aviation won’t have to pay for any damages to the aircraft.








