AVIATION INSURANCE STRAIGHT AND LEVEL PART 2
By Franz Smit
I'd like to start off by thanking everyone for their questions and the response I received from the previous article. This has given me some great insight into what the majority of readers thought of our service and the concerns you have with regards to long term insurance.
The majority of questions were related to exclusions on policies and whether the cover you are paying for will actually pay out in the event of a claim. The big fear there is non-disclosure and I found that around 60% of the people asking, were in fact incorrectly insured for their type of flying.
I will clarify what exclusions and non-disclosure mean and urge you to have proof in black and white that your current policy does in fact cover you for your type of flying. If unsure, just ask and we will find out for you.
Exclusions could be placed on your policies for many reasons. The most common would be pre-existing medical conditions or family medical history, occupation related dangers, and/or hazardous activities (for example aerobatics or test pilot flying).
This exclusion will pinpoint exactly what the policy does not cover, for example, if you have had a heart attack in the past, or your father had a heart attack in his 40's and you have slightly high blood pressure, this could lead to your insurance cover excluding any condition related to your heart.
Don't give up hope on the first try, as many insurance houses evaluate individual risk differently. One insurer could decline cover but the other might give you full cover with a possible loading (percentage increase) in premium.
Insurance companies expect to know exactly what risks they are insuring. These risks are all associated with your health, occupation, and general lifestyle. You need to be certain that your insurance company has the full picture when they agree to your insurance policy, otherwise non-disclosure can become an issue after you've lodged a claim.
An example of a non-disclosure scenario: You have an insurance policy that you took out five years ago. At the time you were flying a Cessna 210 or a Robbie R44 and doing short local flips.
You have progressed to a Bell Jet Ranger or Cessna Caravan and now fly for oil/maintenance guys up in Africa or somewhere else in the world, and from time to time land at unmanned airfields. On your last trip, you had engine power failure and had to do an emergency landing in the bush or on mountainous terrain. There can only be 3 outcomes - injury, death, or “hou vas my dop en watch die move”.
In the first two scenarios, the ones which count when it comes to insurance cover, your policy will very likely NOT pay out.
The insurance company that you have your policy were not informed of the new risks involved in your occupation, i.e. flying in another country/flying a different aircraft/landing at unmanned airfields, and this will be seen as non-disclosure.
I have also seen many recreational pilots who have not updated their policies to include their flying hobby, or have never updated their insurance to include the new conversion to a bigger plane/heli. Non-disclosure will be contention point should there be a claim that has anything to do with aviation.
I urge you to please make sure that you are fully covered for any type of flying. Yes, it could possibly cost you a few bucks more depending on experience etc, but it is a simple case of “penny wise, pound foolish” and it will literally take you five minutes to complete a new aviation questionnaire.
For the aerobatics guys out there, it is generally possible to get full life cover, income disability (with loss of license clause) and dread disease insurance which includes covering you while doing aerobatics. I know most of you have exclusions on aerobatics…. That is old-school (currently only two insurers in SA offer this to aerobatics pilots).
My number one tip is to make sure you are not paying for something that you possibly can't claim on. Always insist on the very best cover possible and don't settle until you are 100% convinced you are adequately covered.
I look forward to hearing more feedback and assisting you where I can.
Franz Smit is the owner of www.pilotinsure.co.za acting under license of Netco Risk Management FSP no: 40265providing independent financial advice. Franz specialises in the aviation industry.
Please note that this article is the opinion and an interpretation of the South African insurance industry by the author, and is not intended to malign any company or individual. Views may differ from other parties such as insurers or brokers. This article is meant as introductory information only and in no way constitutes advice. For tailored financial advice to suit your personal needs, please contact an independent financial advisor that specialises in aviation (just like pilotinsure). All content is subject to copyright and may not be reproduced in any form without the express written consent of the author.
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