Senator Nelson (D. FL), the former astronaut, asked the Government Accountability Office to examine whether there is adequate insurance coverage for General Aviation aircraft. As usual the GAO report is thoughtful, thorough, well-researched, and yet unable to conclude whether added coverage should be mandated.
The summary includes the following important observations:
- Based on GAO’s 50-state survey of state aviation officials and analysis of state statutes and regulations identified by such officials, the vast majority of states do not have liability insurance requirements for general aviation (GA) aircraft owners and operators (i.e., pilots).
- As of April 2015, 11 states have some variation of a liability insurance requirement or aircraft financial-responsibility requirements, which require GA aircraft owners to demonstrate financial ability to cover potential losses incurred in an accident (see figure below).
- Minnesota is the only state that requires almost all GA aircraft owners to have a minimum liability insurance coverage: the required minimum coverage is $100,000 per passenger seat.
- Annual premiums or liability insurance vary depending on the type of aircraft insured and a pilot’s experience. For example, three nationwide brokers GAO contacted noted that an annual premium for a common 4-seat GA aircraft, a Cessna 172, can range from $200 to $550 for a policy that provides $1 million in coverage per accident, with a limit of $100,000 for each accident victim.
- GAO interviewed 73 aviation stakeholders who most frequently cited five factors that they felt should be considered in determining whether to adopt a federal liability insurance requirement. Understanding the extent of the problem—both the number of GA aircraft owners who are uninsured and underinsured and the extent to which accident victims received little or no compensation from such owners—was one such factor. However, data on the extent of this problem are not available and, according to FAA and NTSB officials, could be challenging to collect. Four other factors cited include:
- (1) costs to victims and the public in the absence of liability insurance;
- (2) costs to the GA community if such a requirement were adopted;
- (3) issues related to the implementation and administration of such a requirement; and
- (4) the potential public-safety benefits.
The policy issues are obviously complex and the need to protect the innocent victims from accidents is a major concern. Somewhat hinted at in the findings, but a factor which need be considered, is the weakness of the GA industry. Most forecasts suggest that this important incubator of pilots for the airline industry and incubator of innovative ideas may be at risk.
Requiring that all GA aircraft hold adequate insurance may be the straw that broke the camel’s back. Care must be exercised in moving forward on this issue.