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SSA Group Hull and Liability Insurance Program

The SSA Group Hull and Liability Insurance program is one of the most important benefits offered by the Soaring Society of America to its membership. It will continue to exist as long as it is large enough to attract underwriting insurance carriers. In recent years, there has been a significant reduction in the number of insurance companies willing to cover gliders in the United States. If there were no SSA group program, most commercial operators and clubs, and many individual glider owners would have serious trouble obtaining affordable insurance. In that sense, the SSA Group Insurance Program has played a key role in preserving soaring in the United States.

Costello Insurance Associates 800-528-6483 or www.gliderinsurance.com.

Posted: 7/16/2007

Q and A

By Pat Costello, Costello Insurance Associates

Important Reminder

The information supplied herewith is meant to be informative. It is not intended to be a substitute for the wording of any insurance policy. The policies of insurance control how an insurance carrier may handle a claim not the information provided herewith. Please read your policy. Contact your broker or carrier with specific questions. Thank you!

Frequently Asked Topics

About the SSA's Group Insurance Prgram
Q: Why should I make use of the SSA Group Hull and Liability Insurance Plan?

The short list of reasons is:

  1. Extremely high quality service from our broker of record, Costello Insurance Associates. Pat Costello and his experienced staff have done an excellent job representing the needs of SSA members to our insurance carrier since 1984.
  2. We offer a strong insurance carrier.
  3. A unique insurance contract is provided.
  4. A rate reduction is provided to many who winter-store their gliders.
  5. Telephone communications to Costello Insurance Associaties are toll-free.
  6. Claims-free customers are rewarded with reducing deductibles and rate credits up to 25%
  7. Group rates.
  8. No special off-airport or canopy deductibles.
Access to the SSA Group Hull and Liability Insurance program
Q: What is the criterion to access the SSA insurance program?

For a pleasure policy on a glider---

  1. If an individual, he/she must be a member of the SSA and maintain that membership while insurance is in force.
    1. If a partnership, all partners must be a member of the SSA and maintain that membership while insurance is in force.
    2. If a corporation or LLC, an officer of the corporation or the corporation itself must be an SSA member and maintain that membership while insurance is in force.
  2. Those who rent or borrow gliders must be members of the SSA.
  3. Flying clubs---
    1. The club must be a chapter of the SSA which means all club members must be SSA members.
    2. If the club is not a chapter all club members must still be members of the SSA.
    3. SSA memberships must be maintained while insurance is in force.
  4. Commercial operations---
    1. Whether an individual or corporate entity the policyholder should be a business member of the SSA and maintain that membership while the insurance is in force.
Age Requirements
Q: Is there a maximum age limit for pilots in the SSA Group Insurance program?
A: No. We have pilots in their 80's.
Q: Is there a minimum age for pilots in the SSA Group Insurance program?
A: Yes. The pilot must be old enough to obtain a student pilot certificate for gliders.
Q: Is there a maximum age limit for aircraft?
A: No.
Q: I am a senior glider pilot. To acquire or retain glider insurance in the SSA Group Plan, must I obtain a FAA flight physical or a doctor's health statement?
A: No, unless there is some indication of a problem.
Aircraft Liability
Q: While all the carriers insuring gliders can provide $1,000,000 of bodily injury and property damage liability, some lower that amount to $100,000 when it comes to injury to a "passenger" or any "person". What is the difference?
A: If the limitation is per "person" the $100,000 maximum applies to people outside the aircraft as well as any one passenger. You would have to injure 10 people to exhaust the $1,000,000 limit.

If the limitation is per "passenger", and a person outside the aircraft was hit, the full $1,000,000 is available. The SSA's group plan provides a limit of $1,000,000 of bodily injury and property damage including passenger liability of $100,000 per passenger seat. The $100,000 applies to each passenger only. Should someone outside the glider be hit the difference is $900,000 more protection within the group program.
Q: I have a single seat glider. Why should I consider having passenger bodily injury liability coverage when I can't carry a passenger?
A: Many single seat glider owners loan their gliders to others from time to time. This permissive user pilot is considered a passenger should he/she become injured while operating the aircraft. If the permissive user is hurt, and they allege and can prove their injuries resulted from being provided a faulty glider to fly, they are apt to sue the owner for their injuries. The insurance carrier would pay nothing unless passenger bodily injury liability was purchased. Without passenger liability the owner would have no coverage.

Also, many single seat glider owners rent or borrow gliders with more than one seat to take friends or family up for a ride. The non-owned aircraft liability coverage on their policy is what would apply to the injury to a passenger in a multiple seat glider. If no passenger liability was taken on the owned glider none would be available during the operation of a non-owned glider either. Over 65% of the single seat glider owners in the SSA Group Program take passenger liability for the above reasons.
*** And now a question for you:
Q: During your landing roll a person wanting a more dramatic picture gets close to the runway. You are pushed in their direction by a sudden cross wind and the shutter-bug is clipped by the wing. They are injured to the tune of $300,000 plus $200,000 for pain and suffering. How much would your insurance carrier pay if your limit of liability was:
1. $1,000,000 limiting each passenger to $100,000?
2. $1,000,000 limiting each person to $100,000?
A: click Here for Answers
Q: Does the group program's aircraft liability policy have a family restriction in it?
A: No. Some insurers' policies reduce the bodily injury liability limit to $25,000 for suits resulting from negligent injury to a spouse and $12,500 for a negligent injury to a parent or child. The program's policies have no such reductions.
Q: If I injure myself while operating my own glider can I claim my medical bills under my liability coverage?
A: No, liability coverage applies to bodily injury to others as well as damage to the property of others. But your policy does include minor medical expense coverage under which you can claim your own medical bills. The SSA plan includes $1,000 medical expense coverage at no charge with slightly higher limits available for a premium charge.
Airport Insurance
Q: My club or commercial operation leases space on an airport. The airport owner is requiring us to carry Airport Premises Liability Insurance. Is this coverage available through the SSA Group Insurance Plan?
A: Yes
Q: What limit of liability is available?
A: The most common limit available through the SSA Program is $1,000,000 combined single limit of bodily injury and property damage per occurrence.
Q: When must the named insured give notice of a loss to the insurer?
A: As soon as practicable.
Q: What should I do if I'm insured in the group plan and have an accident?

If the loss involves bodily injury seek medical treatment ASAP. Then report the claim to Costello Insurance.

If a hull loss:

  1. Move the glider to a safe place. Don't let it be a hazard to someone else or expose it to further damage.
  2. Report the loss as soon as possible to Costello Insurance prior to repairs. If not insured in the group program, report the loss to your agent or carrier.
  3. Costello will report the loss to the carrier who will assign an adjuster to work with you.
  4. Take pictures of the damaged areas.
  5. Reporting a loss after repairs are completed could jeopardize coverage. If the loss turns out to be small the claim can be retracted and no claims free credits built up over the years will be lost.
Q: What if the loss occurs on a weekend and my broker's office is closed?
A: Regardless of the carrier or broker, most will be closed on the weekends. Report the loss on Monday. In the mean time, take common sense steps to care for those injured and prevent further damage to the aircraft. Take photos of the aircraft and the accident site. Gather information pertaining to the probable cause, pilots, injured parties, and witnesses.
Q: If the loss is adjusted by the insurance carrier, why do I need a broker?
A: Regardless of the carrier involved, most claims go smoothly. In spite of the common rumor, carriers don't look for any way possible to avoid paying claims. On rare occasions there are misunderstandings resulting from communication problems. The broker, who is experienced with the system, can assist the insured in expressing their point of view. Without the broker the insured would be on their own.
Q: Do insurance contracts set time limits on when a proof of loss must be given an insurance carrier?
A: Yes. Some carriers require a proof of loss to be submitted within 60 days, 90 days, or 120 days. Each carrier and contract differs. A written proof of loss is required within 60 days of the accident to the insurer for the SSA Program unless the time is extended by the company.
Q: What can happen if the carrier is not notified in a timely fashion and the proof of loss paperwork is not submitted within the required time period?
A: It can jeopardize the settlement of the claim. Some years ago our agency arranged insurance on a Cessna 421. The aircraft sustained a bird strike which did minor damage to two windshields. The client did not report the claim to the carrier till nine months later. The cost of replacement windshields went up significantly from the date of the loss to the date the claim was finally reported. The carrier paid only what they would have paid when the loss occurred and the client had to pay the difference. Actually, the carrier could have denied the claim in total. We strongly suggest reporting any loss as soon as practicable. The claim can be retracted later if desired.
Direct CFIG Supervision
Q: What do insurance carriers mean when they say coverage will not apply to aircraft losses where a student pilot was operating the aircraft unless the student was under the direct supervision of a certified flight instructor?
A: In addition to having a student pilot's certificate and appropriate signoffs for the flight involved, insurance carriers want students going on solo flights to be under the direct supervision of a certified flight instructor. Generally that means a CFI must have evaluated the student, the aircraft, the airport conditions, and the intended flight just prior to departure. To do that the CFI must be on site, not at home, not at work, and not flying above the airport.
Engine Teardown Coverage for Tow Planes
Q: With respect to tow planes, what happens if I have a prop strike?
A: Not all losses with tow planes are crashes. Many involve sudden stoppage of the prop as a result of hitting something during the landing roll or while taxiing when the power is nearly off. Yet the mechanic suggests the engine be torn down and inspected for internal damage. Sometimes no damage is found and the insured is left with a bill for the teardown of the engine. Some carriers will pay nothing in this situation. Others might pay a portion of the bill. Provided the insured has taken hull coverage, the carrier for the SSA plan will typically pay the bill less the applicable deductible or any betterment.
Expense Reimbursement
Q: What can I charge my passenger under my pleasure insurance policy through the SSA Insurance program?
A: The policy says no charges for hire, money, reward, or any form of compensation is approved. Being reimbursed for or sharing the direct operating expenses of a flight, including launching fees, if the sum of these expenses does not result in a profit is not excluded.
Insurable Interest, why is it needed
Q: Why do I need to have an insurable interest in order to take out an insurance policy?
A: A policyholder without an insurable interest would have an incentive to help the loss along, so as to reap a profit from the policy proceeds. An example of this could be someone other than the aircraft owner purchasing an insurance policy with hull coverage on the aircraft, then destroying it to collect the value the plane was insured for.
Q: Can you supply some additional examples?
A: Yes.
  1. Suppose you like your neighbor's house a great deal, so much so that you put a $100,000 fire policy on it. Two weeks later the house burns down. The carrier's adjuster asks the following questions:
    • Do you have an ownership interest in that house? You answer, "No".
    • Do you have a lease that gives you care, custody and control of the house and makes you responsible for the house? You answer, "No".
    Start to see the problem?
  1. Mr. Smith puts some earnest money down on a home and prematurely purchases a homeowners policy. The house burns down prior to the closing date. Mr. Smith's homeowner's policy will not pay because he did not suffer a financial loss---he still doesn't own the home.

  2. Fred buys a car from a private owner. He writes a check, obtains a bill of sale, and then has a fender-bender on the way home. He was smart enough to call his agent and have the car added to his insurance policy prior to driving away with it. The claims adjuster runs a title search on the car. He learns the seller was not the registered owner---the car had been stolen. Fred had purchased a stolen vehicle! He did not legally own the car. The bill of sale was worthless, as was the insurance.
In all these cases the adjuster would say, "Sorry, the Named Insured listed on the policy has no insurable interest in the insured property. Therefore we have no reason to pay your claim." Ownership or lease agreements are the typical methods one can use to establish an insurable interest in property.
Insurance Carrier Strength
Q: How strong is the group plan's current insurance carrier?
A: Very, very strong.

We have never had a company as strong as AIG Aviation, Inc. AIG is rated by A.M. BEST, an independent company that ranks insurance companies by the quality of their management and financial strength, as A+15. This is a very strong rating. The lowest rating is F1. Another plus to working with AIG is their location. Both Costello Insurance and AIG Aviation are in the Phoenix, Arizona area. Important matters can be handled face to face if necessary.
Non-Owned Aircraft Liability Insurance aka Renter Pilot Liability Coverage
Q: Why purchase non-ownership coverage and what should I look for in a policy?
A: Non-ownership or renter pilot liability insurance is needed by anyone who may rent or borrow non-owned gliders. The pilot can be held accountable for the bodily injury or property damage they cause with the glider, and is responsible to the glider owner or their insurance company for the damage they negligently cause to the glider being used. Non-ownership policies provide free defense coverage in addition to liability limits. Unlike most policies on the market, the group plan extends coverage to the operation of experimentals as well as those gliders with standard airworthiness certificates. Also, our liability coverage limits just the passenger, not every person, to $100,000.
Q: As a commercial operator, is it of benefit to my renter pilots to suggest they carry non-ownership hull and liability insurance?
A: Yes. Most commercial operator's policies, regardless of the carrier they are with, provide little or no liability coverage to the renter pilots. (Some coverage is available through the SSA program). Should the renter hit someone or do property damage they should have their own insurance.

Also, if they negligently damage the hull of the rented glider they may have to reimburse the FBO for their deductible and loss of use of the glider. There is also the potential of having to reimburse the insurance company for what they paid the FBO.

Caution to commercial operators - non-ownership policies only pay if the renter was negligent. We see many weather and ground handling losses yearly that have nothing to do with the renter pilot. Without hull insurance the FBO would not have insurance for these losses.
Pilot Information
Q: How are pilots approved in an insurance policy?

Pilots are generally reflected in aviation insurance contracts in the following ways:

  1. No approved pilots. This method is used when no flight coverage is provided.
  2. Named pilots only. While the aircraft is in flight, only those pilots specifically named in the pilot section of the insurance contract are approved to operate the aircraft. Non-named pilots causing a loss would void coverage.
  3. Open Pilot Warranty. While the aircraft is in flight, unnamed pilots meeting a set of requirements in every way can operate the aircraft without voiding coverage. A typical open pilot warranty for a retractable geared single engine aircraft like a Cessna 210 would be Private pilot or better with an instrument rating having at least 1,000 logged pilot in command hours of which at least 150 hours were in retractable geared aircraft, of which at least 25 hours were in the make and model being insured. If the pilot operating the aircraft at the time of the loss did not meet the open pilot warranty, coverage would be voided.
  4. Combination named pilot and open pilot warranty: While the aircraft is in flight the pilot must either be specifically named or meet the criteria of the open pilot warranty in every way for coverage to apply.
Program Benefits
Q: How does the SSA Program differ from insurance I can buy elsewhere?
A: The most important answer is availability. There was a time when clubs, commercial operators, and even some individual glider owners found it difficult to acquire aviation insurance. To get an insurance carrier interested in providing coverage, the SSA had to offer them a homogenous group of clients. A group that could eventually become large enough to sustain its own losses, cover the carrier's expenses, and even provide a little profit. Without the support of its members the SSA program would not exist, and coverage for clubs and commercial operators would be expensive and difficult to acquire. If the clubs and commercial operators were not around, where would the individual glider owners get their tows? Where would people learn to soar? Without the group plan insurance availability would become more of a problem than it is now and the services now taken for granted would be hard to come by.

Additional benefits come in the form of rate reductions and reducing deductibles for being claims free, the ability to shift from ground and flight coverage to ground only for a rate reduction, and a contract of insurance designed for glider operations that is unique to the insurance industry, just to name a few.
Return of unused premiums
Q: I had a glider insured outside the program. When I sold it I cancelled my policy mid term. The return premium was not as much as I expected. When asked why, the company said they were entitled to cancel the policy "short rate" and retain some premium to cover their processing costs. Does the group plan handle mid term cancellations the same way?
A: No. We return the premium on a prorate basis even if the customer cancelled the policy due to a total loss. The difference between a pro and short rate cancellation is 8 to 10% with more being returned on a prorated basis. We believe this to be another feature unique to the group plan.
Storage, Lay-up, or Ground Only Coverage
Q: I live in a part of the country where soaring is not possible year round. Do all carriers insuring gliders provide a rate reduction while my glider is in storage?
A: No, but the SSA Group plan does. The criterion for storage credit is the aircraft must not be flown for a minimum of 90 consecutive days and we must be advised in advance. The glider must be insured for both hull and liability coverage.
Q: Under the SSA plan for storage, is the hull of the aircraft covered during the storage period?
A: Yes, the hull is covered during storage while parked or moving in a trailer. No coverage whatsoever applies if the loss is due to a flight operation during the storage period.
Q: Do I have to wait till the end of the policy period to receive the credit off my rates for storage?
A: No. The rate credit is usually received within 30 days of our being asked to modify the policy. Typically, however, the client gives us their storage dates at the beginning of the policy period so the credit can be applied up front.
Territories Approved
Q: Under a pleasure policy issued through the SSA Group Insurance program where can I operate my glider and have coverage?
A: The approved territory is within the political boundaries of the United States of America, Mexico, Central America, Canada, the islands of the West Indies (excluding Cuba), and while enroute between places therein. Remember to check your individual policy for changes.
Trailer Coverage
Q: If my glider is a total loss in a flight accident, does my trailer become a part of the salvage?
A: No, if only your glider is damaged in the incident, the trailer remains your property and is not a part of the salvage following the claim.
Q: If I get in an auto accident while towing my glider on the highway, does my glider policy provide liability coverage for damage to other people's property (such as another car) or bodily injury to others?
A: No, the liability coverage included on your glider policy applies to the operation of your glider. If you should negligently injure someone or do property damage while auto towing your trailer, you would contact your auto insurance agent to check for liability coverage that might apply while you are towing a trailer.
Q: I have the option to insure my trailer physical damage either on my glider policy or on my auto policy. Which is the better way to insure the trailer?
A: Your SSA plan trailer physical damage coverage would be provided on an "agreed value" basis. Coverage provided by your auto insurance for the trailer physical damage would be on an "actual cash value" basis, which would factor in depreciation for age of the trailer at the time of the loss. Agreed value coverage is broader than actual cash value coverage.
Q: Is there a deductible for trailer losses?
A: Yes; $100.
Types of Clients
Q: What type of clients can obtain insurance through the SSA Group Hull and Liability insurance program?
A: The primary eligibility criteria for insurance through the SSA Program is the client must be a member of the Soaring Society of America. After all, it is a group plan.

Insurance is made available to:
  1. Those who own gliders and use them for their own pleasure.
  2. Those who do not own gliders but simply rent or borrow. The non-owner.
  3. Glider flying clubs.
  4. Glider commercial operators.
  5. Those who own or rent space on a glider port.
  6. Glider repair stations.
  7. Glider Sales
Uses Approved
Q: What are the approved uses for the operation of gliders and tow planes in the SSA Group Insurance Program?

With respects the operation of gliders---

  1. Ground Storage. No flight coverage provided. Losses during trailering, moving on the ground except for take off or landing rolls, and while parked are approved.
  2. Pleasure & Competition. The glider may be used non-commercially.
  3. Flying Club. The aircraft may be operated by members of the insured flying club who meet the minimums as set forth in the pilot clause of the contract only.
  4. Limited Commercial. The glider may be used for instruction and or rental for hire. Those renting the aircraft may not use it commercially.

With respect to tow planes---

  1. Ground storage. No flight coverage. Losses while the tow plane is on the ground except for the take off or landing roll would be covered.
  2. Pleasure and glider tow not for hire. This is the typical use a flying club would buy for their tow plane. They may tow any glider but can only charge a tow fee to their club members.
  3. Pleasure and glider tow for hire. This is the typical use a commercial tow operation would buy. They may tow any glider and charge for it.
Q: I would like to learn to fly cross country and participate in glider contests. Do I need to change my insurance policy to factor in those uses?
A: No, the SSA plan policy already includes coverage for using gliders in cross country or competition flights.

General Aviation Insurance Definitions

Actual Cash Value
Q: With respect to settling a hull loss, how is actual cash value defined?
A: The amount equal to the replacement cost of the loss or damaged property at the time of the loss, less depreciation.
Q: How would an insurance agent be described?
A: An insurance agent is a person representing the insurer to a client. They are the company's representative. A broker represents the client to the carrier. A broker is the client's representative.
Agreed Value
Q: With respect to settling a hull loss, how is agreed value defined?
A: At the inception of the policy the insured and carrier agree what the carrier will pay, less any applicable deductible, should the aircraft be a total loss. No depreciation is applied.
Q: How would an insurance broker be described?
A: An insurance broker represents the client to the carrier. A broker is the client's representative. An insurance agent is the carrier's representative.
Q: How is deductible defined?
A: The amount of money the insured is responsible for paying in the event of a loss before the insurance company will begin to pay.
Q: Can I take a higher deductible for a lesser premium?
A: No. The carrier is not interested in offering higher deductible options. As a benefit of the SSA program the deductibles start at $100 and reduce at a rate of $10 each year that you renew the policy without a gap in coverage or a claim.
Q: If I insure my trailer for physical damage what will the deductible be?
A: $100. It does not go up or down.
Insurable Interest
Q: What is insurable interest?
A: According to Robert Mehr and Emerson Cammack in their book "Principles of Insurance", an insurable interest is an interest of such nature that, should the event insured against take place, the insured might suffer a financial loss. If the happening of the event insured against cannot cost the insured money, then he has no insurable interest in it".
Q: What is insurance?
A: Insurance is a system in which a risk of loss is transferred by a person, business, or organization to an insurance company for a premium charge.
Q: What is the definition of insured?
A: An insured is a person, business, or organization that is covered by an insurance policy. With respect to the liability section of an aviation insurance policy the unqualified word "insured" includes not only the named insured but also any person while using or riding in the insured aircraft and any person or organization legally responsible for its use, provided the actual use is with the permission of the named insured and provided they are not excluded in the contract of insurance.
Q: What is an insurer?
A: An insurer is the entity backing the insurance contract. They may also be referred to as the underwriter, carrier or insurance company.
Q: What are the most common types of insurers?
A: The most common types of insurers are the Direct Writers and the Indirect Writers.
Q: What is a Direct Writer?
A: When using a direct writer the client contacts the insurance company direct for everything. No independent agent or broker is involved.
Q: What is an Indirect Writer?
A: It is an insurance carrier that is accessed by the insured through independent agents or brokers. The client does not contact this carrier directly.
Q: With respect to insurance how is liability defined?
A: Legal responsibility for injuring another person or damaging the property of another.
Loss Payee
Q: What is a loss payee and how will an insurer protect their interest?
A: A person or entity that has an interest in the property being insured. Typically they have provided the insured a loan and the insured property is used as collateral. The insurer, if made known of their existence, will include them under the insurance for the property as their interest may appear, i.e., if there is a lien against an aircraft the lienholder (also known as the loss payee) will be listed on the claim check along with the Named Insured of the policy.
Named Insured
Q: What is a named insured?
A: Typically the policyholder. It may be an individual, a partnership, corporation, or an association. All the provisions of an insurance policy apply to a named insured. Only the named insured can order changes to a policy.
Q: How is negligence defined?
A: Negligence is generally defined as the failure to use ordinary care. A person fails to use ordinary care if he/she does something that a person of ordinary prudence would not have done under the same or similar circumstances. Failure to use ordinary care can also occur by omission, or failing to do something which a person of ordinary prudence would have done under the same or similar circumstances. Negligence, then, is a judgment of both acts and omissions.

An example of a person not using ordinary care in the course of causing a loss would be a pilot improperly hooking up a control surface the consequence of which is a crash during take off resulting in injury to people on the ground.

An example of an occurrence by omission would be failing to put enough gas in the aircraft for the intended flight which results in a crash causing bodily injury or property damage to others.

Q: What does subrogation mean and how is it applied?
A: The insured aircraft is negligently damaged by another party. The carrier pays the named insured for the repair costs to the aircraft. The named insured's rights against the negligent party shift to the insurance carrier who then has the option to attempt to recoup the money they spent on the client from the person or entity that negligently caused the loss. This is an example of subrogation.

Answers to Passenger Liability Questions Above

Answer to Question #1: $500,000
Answer to Question #2: $100,000

Back to Questions

Posted: 7/16/2007

Group Insurance Committee 

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