CFI Insurance

[Bob Turner]

I have shared many opinions on this topic. Did I get surprised today, or what?

Turns out I do not know the difference between "additional insured" and "waiver of subrogation." A full explanation of how this came up is over at Super Cub dot org, since that forum reaches a lot more CFIs.

I always thought that "additional insured" was complete coverage. Apparently not . . .

And I note - Underwriters do not seem to be happy with owners getting instruction - or maybe they want flight reviews done in a simulator, or someone else's airplane.

Because of insurance issues, I am turning down students at an astonishing rate, considering that before Covid I was doing maybe an hour of dual a week. I may even have been dropped from the Stearman for 2022. Sigh.

 

[Tangogawd]

I went to Supercub and read your post. Doesn't say much more.

What is a the difference? I heard of "additional insured", but never heard of "waiver of subrogation". So, according to google, a "waiver of subrogation" is what I thought "additional insured" was..... Be interesting to see what you come up with from the underwriter. I'm curious why the waiver is so much more expensive.

I'm in Alaska, and now, no one will do CFI insurance up here. My broker had me do "additional insured" on the client planes I do instruction in. Sounds like that is not good enough.

I don't understand the FAA and now the insurance underwriters. Seems to me making instructors unable to get insurance is NOT going to lower accident rates.

 

[Bob Turner]

I study this stuff. I am good at it; I passed three bar exams on the first attempt. Still, I get confused. Here is the way AIG seems to be looking at it:

Additional insured has only to do with liability.

Waiver of Subrogation means they will not go after you for the hull - and neither will the owner.

I have always demanded a Waiver of Subrogation - and they were free until this year. That is no longer true; I gave two Super Cub flight reviews in June, and the owner had to shell out an additional $120.

I had thought, based on much help from knowledgable brokers, that "additional insured" meant you were covered exactly the way the "named insured" was. Apparently not so.

I carry liability. I won't get in another airplane worth more than $52K without a waiver. And I won't get in one at at all as CFI without a waiver. Clearly, my instructing days are just about over.

 

[Tangogawd]

Well Bob, you are much smarter than me! And if you have trouble understanding it, its above my head.

I have all but quit doing instruction for individuals I don't know. Which is too bad, because I've had the chance to fly some pretty cool stuff.

I have many friends with planes and that is basically the only instruction I do anymore. Many of them have added me to their insurance so that I may fly their plane if I chose to, which I don't. Barely fly my own stuff enough. I would take it that I would be "named insured" in this case, and I assume that I am covered just as the owner. But now, what if I'm acting as CFI for them, which was the whole point to begin with? May I not be covered?

My broker told me, with confirmation from the underwriter, and the insurance adjuster, that I am covered with liability and hull on any SEL plane I fly that I do NOT have regular access to, up to the insured value that I currently pay on my plane. I suspect that this may be changing. This has been beneficial when asked to ferry a plane for someone, or when I work on a friends plane, I can test fly it.

Insurance underwriters are tightening the knot for sure. In Alaska, I can no longer get CFI or non-owners float insurance, both of which I used to carry.

 

[Bob Turner]

Not smarter - just schooled in what to look for.
And that is the point: I look for this stuff, and am baffled.

Here is my current understanding - slightly changed from last week:

First, being “named”offers you zero protection, in most cases. Zero!

Second, and this is new, “named insured” is only for liability, and has nothing to do with hull.

Third, “Waiver of Subrogation” is apparently the only way to keep an insurer from going after you for the cost of hull repair and replacement airplane. Avemco has a “Recovery Rights Endorsement” that appears to offer the same protection.

Fourth - and this is the “gotcha” - in the fine print you will see that CFI activity is expressly excluded (see section 17 on your USAIG policy). That is true even if you are additional insured with waiver of subrogation. Also, that insurance that you have that travels around with you excludes when you are acting as CFI. Stay out of right seats if you are a CFI.

As of right now, as near as I can tell, your name must be on a policy somewhere stating that you are covered while acting as CFI both as additional insured and with waiver of subrogation. If you are like me and have SAFE liability coverage, all you need is that waiver of subrogation. Or, for $1800 extra per year, you can get $200k coverage from SAFE for hull damage when you instruct.

Ferry flights are almost always commercial flights, and not covered by either your insurance or the owner’s insurance. The last ferry flight I did I had the underwriter state that “Bob Turner is covered for liability and hull under this policy for a flight from Sebring Florida to KMYF with necessary fuel stops.” They did that. They will no longer do that for me - might be my advanced age. I will not move without something like that in writing. Twice in the last two months I have been assured that I had similar wording on a policy, but nobody would send me copies. If they won’t put it in writing, and something happens, your legal bills will go through the roof.

Finally, the subject of having a waiver signed by your student/aircraft owner has come up in casual conversation. Do not depend on that - if there were an ironclad way to make that work, none of us would have insurance - two occurrences come to mind:
One - suppose you injure someone on the ground. Your indemnification is worthless, and if you are acting as CFI, so is your regular insurance.
Two - say you sustain injuries. Your student now cannot sue you, but his wife and kids can. Now where are you?

End of soapbox. Be really careful - the underwriters are not just making this obscure for fun. They intend to use it.

 

[aftCG]

Damn. Additional vs named has escaped me completely. The policies seem to be written to force all of us to use big policy flight schools with 20 year old instructors. That's, uh, er, awesome and well thought out. [cough].

I only know what the definition of "waiver of subrogation" because I rent a hangar from the county and they require any plane in my hangar be insured, that they be named on the policy with a waiver of subrogation. I guess the scenario there is a neighboring hangar catches on fire, consumes "my" hangar and aircraft. The county wants to know that the insurance company will pay me for my plane and then not turn around and sue the county.

When I sold my Citabria that insurance policy was terminated, so I had to turn right around and insure my unfinished Kitfox with a waiver of subrogation for the county. I'll note that insurance is tough everywhere, as my old broker couldn't find anyone to cover my experimental plane and she sent me down the road to Avemco.

Another tale from the trenches, my uncle is acquiring a Yak 18 (not an 18A, or 18T or U or any other suffix letter). I'm to head to California to ferry it home. Ladd Gardner is the place to get warbird insurance from. I got a quote of $2165 for a year of liability plus hull ($65k), but the quote also includes a required 5 hours with a CFI. There are only two Yak 18s in the country in flyable condition and neither are owned by CFIs. In fact I'll hazard a guess that once I'm qualified to fly the plane I'll be the only CFI in the country with recent experience in one.

Oh and since my uncle hasn't flown since 1996 and likely will never even sit in this plane the policy will need to be written to specifically exclude the owner from flying.

 

[Bob Turner]

You need specialty insurance. We had a Stinson Reliant that had not flown since 1958, and since I have time in similar aircraft, they chose me. Normally, an instructor, or even a pilot, would need something like 15 hours in type to be covered, but we explained the situation, and I got the exact wording I asked for - plain English - additional insured with waiver of subrogation including providing flight instruction to the owner. With your T6 time, you ought to be able to get that, but it won't be cheap. I don't know what a Yak 18 is, but there are at least six Yak qualified pilots in San Diego and confines. They may be able to help - but I personally don't know them.

I may have to "eat crow". The broker and the underwriter responded to my very specific query saying I was not covered when I was instructing. Today I asked what kind of words they would provide for me if I sent them the additional $306 for a CFI waiver of subrogation. The answer indicates to me that they did not even read my initial query before responding - they said all I would need is to be "specifically named" on the policy. Well, that was the first thing I stated in my query - that I was specifically "additional insured with a waiver of subrogation" and my name was prominently typed on the policy. Their initial response seemed to indicate that that would make no difference.

Only thing I can say - we do know the average IQ is 100, right?

By the way, one thing you cannot count on is a verbal from the aircraft owner. Have in your possession a document from the insurer or the broker.
As an example, the first thing the broker tells the owner when the owner asks for a waiver for me is "you do not need that. Bob is under the open pilot warranty." That is true, but it does you no good at all. Neither does being "named."
Twice in the last two months, Cub owners have told me that their insurers agreed to my insistence on a waiver of subrogation during instruction. In both cases, I said OK, have the broker send me a copy. So far, no copy from either.

We did a Waco ZPF-7 last winter. It took three iterations to get the wording I needed. The broker first "named" me. Boo! This one was a quarter million dollar 300 hp antique - I cannot buy CFI hull to cover that, no matter how many $ I bring to the table. We did get the proper wording in the end.

If you have assets, do not move without coverage. There is a reason that CFI insurance is triple that for private pilots who may or may not need more instruction.

 

[Bob Turner]

Finally got to the bottom of this. I am not "additional insured." That was my mistake - I must have missed something. The policy does not name me as additional insured anywhere.

Interestingly, the three of us are named as "approved pilots" which is, I suppose, just like being "named." We all have the same status - but the broker is apparently saying that the two with $ investments in the aircraft are implicitly "additional insured" and maybe if I give the legal owner (a trust) a dollar, I too can be "additional insured" without further paperwork. This for me is unfamiliar territory, and I used to teach wills and trusts.

Oh, yeah, one more thing - if you bring hull insurance, it may or may not cover replacement aircraft or diminution of value. The owner can sue you for those things, since maybe his hull insurance doesn't cover them either. That is one more reason a Waiver of Subrogation is so important.

 

[aftCG]

You need specialty insurance.
[snip]
With your T6 time, you ought to be able to get that, but it won't be cheap. I don't know what a Yak 18 is, but there are at least six Yak qualified pilots in San Diego and confines. They may be able to help - but I personally don't know them.

Something tells me I'm going to end up saying this a lot but I'm practicing saying "yeah, it's not that kind of Yak 18", because that name describes a big four seat tricycle gear beast (Yak 18T), a tandem two seat trike which looks pretty much like the common Yak 52 (Yak 18A), and at least one other variant.
This is a fabric covered, all metal, 5 cylinder tail dragger. The Shvetsov engine is a copy of a Kinner radial. The name is all it shares with those other Yak 18s. Yuri Gagarin learned to fly in an 18 and so did No Kum-sok (aka Kenneth Rowe, who defected from North Korea in a Mig 15). The Chinese used them until 1985 and the Koreans may still be using them. These planes were used in the Bed Check Charlie raids in Korea 1952-53, in a fashion similar to the Night Witches of WW II fame - gliding in at night and hand tossing munitions.

If you have assets, do not move without coverage. There is a reason that CFI insurance is triple that for private pilots who may or may not need more instruction.

My life is such that my assets will be consumed in the crash, but I do plan on covering this plane. I'd like the hull covered in the event that the Kinner knock off packs it in.

 

[Bob Turner]

I see what you mean. Neat! I bet nobody is current in that bird - you will be the USA expert.
That said, it looks fairly docile, compared to the high power versions I have seen.

 

[Bob Turner]

Hey, Bump!

A friend needs a flight review in a Cessna 180. I am actually pretty good at the 180, so he asked. I told him I needed his insurance broker or underwriter or somebody to state that I have a waiver of subrogation for hull damage while acting as CFI.

This, for AIG at least, was usually free, although it generally took about three attempts to get the wording correct. We are only on the first attempt after a week. The broker says I have a waiver of subrogation, but the AIG document says "additional insured," and note 17 is still in effect. That, plus they charged the owner #300 bucks! For a one hour flight review!

I did glance at the above from 2021 - to the Alaska CFIs, I believe SAFE will cover you for a million liability and perhaps up to $200,000 hull - for a price a bit higher than they would charge the owner of a $200,000 airplane. You can check that hull limit by going to the SAFE site - they post it.

I also note that I got a perfect letter from Zanette last month for a quarter-million dollar hull - the owner says it was free.

Who knows . . .