Mandated GA insurancegood policy or bad for the business?

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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).in11
    • 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.

in22The 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.


ARTICLE: Government Considers Mandatory Insurance for GA

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1 Comment on "Mandated GA insurancegood policy or bad for the business?"

  1. Charla Gross-Hook | November 1, 2018 at 2:48 pm | Reply

    I started researching this issue when my wonderful, very needed and loved Son was killed in a private, home-built aircraft crash. The experienced pilot had done several stunts at home- many times without a passenger, son he decided to try and scare my son- his new co-worker by flying it with him on-board. He misjudged his distances and imploded the aircraft on an embankment. The pilot was ejected and killed on one of the impacts. My Dear Son- the coroner promises me died of massive brain injuries because then he burned so extensively that they couldn’t even use dental records to identify him. We had to ID him- his arm was outside the aircraft and he had a very distinctive “Incredible Hulk” tattoo. He left behind a devastated family- was divorced but a Father of 2, brother of 5, friend to many and the beloved Son to his Mama. I mourn his loss every single day! You have no idea and I hope you never have to suffer thru burying a child!
    His name is Chad Earl Hughes and he was a licensed A&P mechanic for Air Evac medical helicopter service. (Our family has several paramedics, EMT-B’s, law enforcement and fire-fighters)!
    Believing I am a good Christian and recognizing the pilot’s family also suffered a loss, we contacted the family to express our empathy for their loss- to let them know we weren’t interested in suing them, could we just get the insurance information for especially his kids. The wife’s response was for us to sit on it and spin… go to hell… her attorney’s information and that they didn’t have any insurance! I was appalled! I know the grief, the tragedy, the despair and the loss! Nothing can ever replace Chad… but the insurance could have helped his kids!
    Another interesting fact- the crash killing my Sonshine was about 300 yards to the right of the end of the runway. About 400 yards to the left is the community high school, parking lot and football field. That night a football game was in progress with about 250 to 300 people were in attendance. If that stunt had rolled to the left instead of right…. imagine the destructionence both in people and property. Coaches ran across the street and jumped the fence to run to the scene, but the inferno was so intense there was no way for them to get to Chad,
    Currently private aircraft is a State by State issue. I think it should be a National one! Chad was from Missouri… the pilot and plane from Oklahoma… and the crash was in Granbury Texas. None of these three States require insurance. And- realistically when the wife took NO responsibility for Chad’s kids and family… what if it had been a whole community?!? Requiring insurance on privately owned aircraft would have protected us, the school and the widow.

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