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Transportation Issues: Common Reasons Aviation Insurance Claims Are Denied

Wed Nov 16th, 2022 on     Insurance Claims,    

Having your claim for damages incurred by your aircraft denied can cause you many headaches, especially when you depend on your aircraft for your line of work. At Ver Ploeg & Marino, our Miami insurance law attorneys help aircraft owners recover the compensation they are owed under the terms of their insurance policy when their carrier denies their claim. We understand how expensive it can be to make even minor repairs to an aircraft, which means there is typically a lot of money at stake when these claims are denied. Time is also of the essence in having these claims approved so you can move forward and use your aircraft for its intended purpose.

While specific laws vary by state, the top reasons why insurance companies deny these aviation-related transportation claims are typically common across all states. One of the Miami insurance law attorneys from our firm discusses these reasons below. 

Unapproved Pilot

When the aircraft is flown by a pilot that is not properly qualified, the insurance company may deny an insurance claim. Unapproved piloting is one of the main reasons why claims are denied, and it can happen for several different reasons. It is important to understand how policies determine pilot approval. Typically, they either state that the carrier will review information regarding the individual pilots that will be flying the plane and confirm or deny coverage, or they have what is known as the “open pilot clause.” This clause states that there are certain requirements a pilot must have in order to be covered by the insurance policy. These requirements may include certain training within a certain time frame. Should a pilot not meet these specific requirements, a claim made under the insurance policy may be denied. It is never safe to assume that a particular pilot will meet these requirements, as the requirements can be quite specific and stringent. Our Miami insurance law attorneys state that it is becoming more common for some insurers to require owners of larger twins to have simulator training within a short time frame before a flight. This is why it is imperative that each individual pilot be looked at for coverage on the specific date they are flying. 

Uncovered Wear & Tear

Wear and tear or mechanical breakdown is typically not covered under aircraft insurance policies. Damage that happens suddenly, however, is covered. For example, if the aircraft engine fails, and you have to make an emergency landing in an empty field, the engine will probably not be covered, but the damage to the aircraft due to the emergency landing will be. 

Uncovered Territory

Insurance policies spell out the exact area a plane must fly in to be covered under the policy. Flying outside of the area listed will lead to a denial of any claim that is filed. For example, if a policy states that coverage is only provided when the aircraft is flown over the United States, taking a trip to Canada can result in the denial of any claims made. Knowing what territory your policy does and does not cover is essential. 

Unapproved Purpose or Use

Using the aircraft for a purpose that is unapproved is another reason why insurance carriers deny claims. Every policy will spell out what the aircraft may be used for, and any use outside of these approvals is not allowed. One common example seen by our Miami insurance law attorneys is confusion over the ability of the aircraft owner to accept payment from passengers. Some policies allow coverage only when no payment is made or only if no payment other than reimbursement (ex. Fuel) is made. Because of this, it is essential that aircraft owners ensure that the way they are using and operating their aircraft aligns with the purposes allowed under their insurance policy.

Accepting more than direct reimbursement, or under some policies, accepting any compensation at all is viewed as renting out the aircraft, which is why claims are specifically denied under most policies. Trading for services is also typically not allowed. For example, having a deal where someone may use your plane and in exchange, they will provide you with cleaning and maintenance services is not allowed. 

Illegal Purposes

Perhaps the most glaringly obvious reason for the denial of a claim is that the aircraft was being used for illegal purposes. When you own an aircraft, it is essential that you are not engaged in any illegal activities. If your plane is used in illegal activities, and you need to make a claim with the insurance company, it may be denied solely on the grounds that the aircraft was being used for illegal purposes. Smuggling drugs is one illegal activity that can lead to an insurance claim denial. 

Tips on Avoiding Aviation Claim Denials

Avoiding these and other claim denials is something you should take seriously. Some simple ways to do this include:

  • Knowing your policy, including what is included and excluded from coverage 
  • Asking for clarification from your insurance carrier If there is any part of your policy that you do not understand
  • Looking into every pilot that flies your aircraft to ensure they have the correct qualifications
  • Being extra careful regarding who you allow to use your aircraft and the intended purpose of every use
  • Ensuring that you have adequate insurance coverage for your aircraft
  • Keeping extensive records of everything that happens with your aircraft, including logbooks and the records of all pilots
  • Telling the truth to the insurance company and making certain all records are accurate
  • Ensuring all required maintenance is done to keep the aircraft in optimal condition

Speak With One of The Miami Insurance Law Attorneys at Ver Ploeg & Marino  

When your claim for damages to your aircraft has been denied, you need representation you can depend on. Contact the Miami insurance law attorneys at Ver Ploeg & Marino. Our attorneys focus their practice entirely on insurance litigation and appeals, and they can put their experience to work for you.

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