aftCG wrote:

mtv wrote:
I don’t know what insurance company gave you that “information”, but it’s total horse pucker. There are all kinds of “Non Owned aircraft insurance policies out there. ANY reputable brokerage should be able to set that up for the kind of deal he’s talking about. I’ve always recommended folks renting airplanes buy non owned insurance.

And, non owned insurance only covers the owners deductible? Seriously? I can introduce you to a gent whose non owned aircraft policy bought a very nice Super Cub, and boy was he glad he had it.

The owners insurance insures him (and yes, you if you’re a named insured) if he HAS insurance, but a non owned policy insures YOU.

MTV

My apology for the fake news. I think in my case the issue was that the owner (my uncle) did not have any insurance in place. They were not willing to write a non-owned policy on an otherwise uninsured plane. Maybe it was just that broker, or possibly it was complicated by there being less underwriters for warbirds (like almost none).

Actually, the Super Cub incident I mentioned was an uninsured (by the owner) airplane.
I have no doubt that warbird insurance complicates things, but I'm betting you can get non owned insurance for them as well....may just take more shopping around.

MTV

MTV

As of four years ago when I added a CFI friend of mine to my Avenco policy as a named insured so that I could continue to fly while waiting for Basic Med to kick in Avemco required a rider for a waver of subrogation to protect him if a claim occurred. Their position was that my policy protected me and the waver of subrogation protected him. At that time cost around $100 a year. A story as a note. A friend of mine who has a flight training and 135 operation and self insures the hulls on his 172 and Supercub requires non-owned (renters) insurance. One of his renters hit a Sandhill Crane with the 172 doing several thousand dollars damage to the leading edge of the right wing. In order for my friend to be paid by the renters insurance he had to sue the renter for the loss. The insurance company would not pay without the law suit. My friend understood that was just how it was but the renter was very unhappy with how the insurance company handled it. The aircraft owner and the renter were and still are friends and the renter still rents the 172.

Tim

Lots of good discussion here. I agree that it is absolutely critical to get the insurance issues ironed out with either a good agent (who will just do what the underwriter wants) or with Avemco. I think both pilots as named insureds is important, as well as making sure the subrogation is addressed and understood up front so that the insurance company doesn’t go after one or the other pilots named on the policy.

I would highly recommend an LLC, as suggested by jcadwell. The LLC is a very important legal shield. I one time read about two pilots who had a simple partnership in an airplane. The one partner piled up the plane, killing himself and the passenger. The passenger’s family sued the remaining partner for everything he owned. An LLC is intended to prevent situations like this and even though they were insured, some jury awards can far exceed the limits of liability on an insurance policy.

Aftcg mentioned that lawyers can be prohibitively expensive, but that’s usually after things have gone south. Using an attorney to set up an LLC, review agreement terms or otherwise provide sound legal advice up front, is usually money well spent.

There is also the IRS to consider, as they always want their cut. I have been involved in two partnerships, both set up by attorneys in LLCs. One LLC files tax forms with the IRS every year and the other did not, both on the advice of the attorney who set up the LLC. Since both partnerships already existed when I joined, I did not rock the boat and we continued on the way the LLC had already been functioning. When we filed tax forms (IRS 1065), the money that each partner contributes to the partnership is considered income. Since these are not for profit partnerships, over time the income and expenses balance out, although some years show a “profit” and some show a “loss.” The first seven years the aircraft is also depreciated, contributing to the “loss.” With an asymmetrical ownership, I think the IRS really needs to be considered. Yes, there is a low likelihood of getting caught, but who really wants to be crosswise with the IRS?

Thank you everyone for the great discussion! There are so many good points here and things to discuss and work out with the guy I may be getting time from.

Thank you!

Zzz wrote:I think we're still discussing this under the assumption that a claim is being made to the owner's policy. Maybe that's appropriate for the OP's question.

But I always carried a non-owned policy that was meant to cover the full loss, not be a gap insurance or secondary policy of some sort.

Can you make a claim only to the non-owned policy and not the owner's policy?

Yep, you're right. Assuming your buddy has full (hull) coverage and he's loaning it out to someone else who is PIC.

I totally didn't key in on the non-owned policy thing. That's a whole new direction I've never considered! My guess is that you'd be good to go since that type of insurance explicitly covers you in a non-owned aircraft. You'd have to look at your policy because I've seen clauses on non aircraft insurance policies that state if the item has other applicable insurance coverage for an event, then that shall be used first.

I know my homeowners insurance has clauses like that, specifically for vehicles damaged as part of a event with your house.

But there are loopholes. What's legal is whatever can be gotten away with civilly. You don't have to convince the whole jury, only the majority and then you win.