Clear on Top

The late Southern humorist, Lewis Grizzard, used to say, “Naked is when you ain’t got no clothes on. Nekkid is when you ain’t got no clothes on, and you’re up to something.” These days, we’re seeing quite a number of corporate aircraft being parked for extended periods of time. For various reasons, mostly economic, many aircraft owners are no longer flying their aircraft. Because values have plummeted as well, the aircraft can no longer practically be sold, either. The answer for many – long term storage. When the aircraft insurance policy expires, many owners of stored aircraft ask the question, “should I renew the coverage, or just go naked (hopefully not nekkid)?”

The reasoning behind the consideration of going without aviation insurance coverage on a stored aircraft can seem logical. The aircraft is locked in a secure building. It’s not being flown. It’s not going to hurt any one or be involved in an accident. Insurance is very expensive , and the aircraft most likely wouldn’t be in storage if the owner was flush with cash. But is going naked a good idea?

One of the most commonly held misconceptions is that the FBO’s insurance will take care of damage to your aircraft while it’s stored in their hangar. The FBO may (or may not) carry insurance to protect THEM. As an aircraft owner, successfully collecting from an FBO’s liability insurer means that you have sued them in court and proven that the FBO was negligent, or that you have negotiated a settlement because the FBO’s negligence was fairly evident. Either way, the dealings with the insurer will be adversarial and neither the FBO, nor their insurer have any incentive to be helpful in solving your problem – they are defending themselves against you. When the tornado comes and levels the building in which your million dollar asset is parked, the FBO most likely will carry no responsibility for the damage – take it up with the Weather Man.

If your aircraft will be in long term storage, consider carrying at least ground (not in motion or not in flight) coverage. A few bucks cheaper than in flight coverage, the policy will belong to you and will pay for your damaged aircraft, whatever the reason. If the FBO is at fault, the insurers will work it out behind the scenes, but you will have been made whole.

If your current situation dictates that your aircraft will not be used as it once was, don’t quit taking calls from your insurance agent. Just as before, you need to have an intentional and well thought out risk management plan in place. Don’t go nekkid – Cover your assets!