Insurance
Summary
Updated: 5/8/2024 Read time: 5 min
Before taking that international trip, check your insurance policy for some highlights: liability limits, geographic limits, expiration dates, pilot training requirements, open pilot policy, and policy exemptions.
Better yet, read the actual document! Like most international policies, aviation insurance policies abroad have some caveats. Involve your aviation insurance broker in the trip's planning.
Details
Europe Passenger Liability
There are minimum passenger liability requirements for any aircraft over 500 kg (1100 lbs) in Europe.
Passenger minimum liability requirements are $250,000 SDRs (SPECIAL DRAWING RIGHTS) per passenger. SDR is a make-believe currency of the International Monetary Fund that is a market-cap weighting of the major world currencies (US Dollar, Euro, Chinese yuan, Japanese yen, and pound sterling). Since its underlying value is derived from significant currencies, SDR value fluctuates.
Over the past ten years, $250,000 SDR converted to USD has ranged from:
$390,000 max in 2012, and $330,000 min in 2024
As of May 2024, $250,000 SDR converts to about $330,000 USD. You can CONVERT AN UP-TO-DATE VALUE HERE.
Aircraft under 2700 kg (5950 lbs) may be able to lower the limits to $100,000 SDR (approximately $140,000 in Jan 2022) per passenger, depending on the country they are flying in. You would need to look up each country to get the specifics, and you can cover a lot of countries quickly flying around Europe. So, it is good to partner with a knowledgeable Insurance broker who can help with the specifics.
Europe Third Party Liability
THIRD-PARTY LIABILITY LIMITATIONS ARE BASED ON MGTOW. Operating a GA turbine is probably unaffected. Liability limits are usually above this minimum threshold on most policies.
Smaller piston aircraft could be a challenge. A C-172 or PA-28 aircraft is looking at a $750k SDR ($1,050mil USD) in passenger liability for the three passenger seats and $3 mil SDR ($4 mil USD) in third-party liability. The hull value may be much, much less. Underwriters have pushed back on writing that kind of policy.
All is not lost, however. Insurance companies within Europe deal with the additional liability requirements regularly and may be of assistance. You must go through an aviation insurance broker, like in the US, rather than directly to the underwriter. To determine your aircraft's third-party liability, reference EU Regulation No 785/2004, Article 7. Below is the chart with some added information.
Notice the above only addresses passengers and bystanders. Aircraft hull insurance is not the concern of EU regulators.
Mexico Diversion
Suppose you find yourself in Mexico on your way to the EU. In that case, it is either time to update your navigation database, or Mexico is your stop on the way to an outermost region or overseas territory of the EU (such as Saint Martin or Aruba). That, at least, is my justification for including Mexico here.
Buried in your insurance document, you may find a disclaimer, something to the effect of:
“Unless you have aircraft insurance written by a Mexican insurance company, you may spend many hours or days in jail if you have an accident in Mexico. Insurance coverage should be secured from a company licensed under the laws of Mexico to write such insurance to avoid complications and other penalties possible under the laws of Mexico, including the possible impoundment of your aircraft.”
Yikes. Lawyers are going to lawyer.
This is a point of confusion. You may find information that a Mexican insurance policy (in Spanish) is required. AOPA contacted the Mexican Aeronautical Authorities (DGAC) and received a letter that cleared the situation. If questioned, I keep a copy of the letter but have not had to present it. You can download a COPY OF THE LETTER HERE.
It states that private aircraft operators are not required to get a Mexican insurance policy. Upon entry, you must present your existing insurance policy to prove it has coverage for the Mexican territory and a minimum of $300,000 coverage for liability damages.
However, the letter of the law may differ from what you experience in the field. Flying into popular destinations will increase the chances of receiving handling support who can verify insurance documents before arrival and having English-speaking Mexican authorities on site. Off the beaten path (or on a diversion), if the locals cannot read your English policy, it does not exist.
As Ben Franklin said, “An ounce of prevention is worth a pound of cure.” You can get an insurance policy (for your insurance policy). Baja Bush Pilots offers Mexican insurance coverage you can purchase online at a reasonable cost. While not strictly necessary, it could grease the skids if you find yourself in a tight spot. Most aviation insurance brokers in the US can also acquire a Mexican policy for you, but if your need is after hours or on a weekend, the Baja Bush Pilots offer a policy that can be procured online with a credit card that you can immediately print.
Insurance Brokers
Partnering with a good insurance broker can help clarify the requirements in unfamiliar geographies. Knowing the ins and outs of underwriters adds value when creative solutions are necessary. Wings Insurance is an excellent resource if you are looking for options or a second opinion.
Aviation insurance has been pretty chaotic over the last few years. I reached out to TOM HAUGE OF WINGS INSURANCE, and he gave a good summary of the current state of the industry and outlook in 2024:
“Today’s insurance market has softened a bit since 2023 with a total of four new insurers in the space. As of 3Q2023, Eiger Insurance, Mach 2, and Applied Underwriters became ‘new’ aviation underwriting markets, and a 4th – Rokstone – is slated to start writing aviation business this quarter. Currently, there are about 20 total carriers underwriting aviation hull and liability policies in the USA (as of 2Q2024). Of those 20 carriers, only about 9-12 have the capacity and appetite to cover turbine aircraft and/or higher hull value jets, which may operate internationally. So, the market overall is on the smaller side for this class of aircraft and even smaller for owner flown higher value turbine aircraft in the space (most of which today eclipse $5m in asset value up to $13m in asset value). The viable underwriting carriers on any specific risk will depend heavily on the aircraft hull value (purchase price), owner/flown versus professionally flown, the experience of the pilot(s), and whether the aircraft will be operated single-pilot or two-crew. A myriad of perfect storms of adverse factors have kept the market in a ‘hardened’ state dating back to around 4Q2018, so the current state is seeing some overall stabilization of rates due to increased capacity.
“Overall, aviation and space industry losses, catastrophic global property/ casualty losses, airliner groundings due to the 737 max situation, war risk concerns and confiscation of commercial assets due to the Russia/Ukraine conflict and a reduced market due to re-insurers exiting the space – has resulted in a hardening of the aviation insurance market globally. We remain optimistic that the current capacity will temper rates a bit in 2024 – we are currently seeing rates flatten a bit or see smaller percentage level increases from 2023 (compared to what we saw in 2022/2023).”
Aviate
Discuss your insurance policy needs with your current or future aviation insurance broker early in planning your international trip.
Download a copy of the DGAC MEXICAN AVIATION INSURANCE LETTER FOR PRIVATE OPERATORS:
