NORTHWEST INSURANCE ARTICLES
Aircraft Insurance Policy Warranties
February 14, 2006
We typically think of a "warranty" as something that provides protection to the consumer, by the manufacturer of its product, for production or service defects in which the purchaser might experience early in their ownership. But in aviation insurance policies, a "warranty" is an unlikely reversal of the roles between the operation of an insured aircraft. Warranties are important provisions in an insurance contract that require the Insured to adhere to very specific rules in order for the policy to be valid. Unfortunately, there are many misunderstandings regarding warranties and every Insured should reach their policies carefully to identify any warranties and make sure all of the warranties are completely complied with before operating the aircraft, even during a taxi. Each aviation insurance company words these provisions differently, and a change from one company to another at renewal time might also significantly change the various warranty working and requirements.
The primary rule regarding policy warranties is that there doesn't necessarily need to be any "causal relationship" between the accident and the warranty requirement. In other words, a violation of the policy warranty doesn't have to be a contributing factor in the accident in order to invalidate the policy. For example, if you have flown the aircraft into a territory that is not specifically covered within the insurance contract, it does not matter what causes the loss; there is simply no coverage at all if the loss takes place outside the covered territory. Any violation of a warranty (promise by the Insured to strictly adhere to the provisions of the warranty) of any kind may serve to invalidate the policy for ANY loss. Several common warranties to be aware of in aircraft insurance policies are:
- A pilot flying the aircraft without a valid medical, flight review or required training
- Operating the aircraft without a valid airworthiness certificate
- Allowing other pilots to operate the aircraft without the required flight experience or training
- Flying the aircraft into an uncovered territory
- Using the aircraft for a purpose that isn't specifically approved for on the policy
- Charging for the use of the aircraft, when no charges are allowed
Read your policy carefully and ask lots of questions of your aviation insurance specifialist in order to determine ALL the warranties in your aircraft insurance contract. Once all your contractual promises have been complied with, then the insurance company is bound to all the other terms, provisions, and coverages they have promised to provide to you.