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Can An Aviation Insurer Deny Coverage If You Breach The Terms Of Your Insurance Policy?

by Greg Reigel 30. June 2011 09:27
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If you are in an aircraft accident or you suffer a loss will your aviation insurance policy provide coverage when you need it? That depends.

Aircraft insurance policies have requirements, conditions and provisions with which the insured must comply in order for the policy to provide coverage. These requirements often mandate the condition of the aircraft, qualifications and currency of the pilot and accuracy of the information provided by the insured to the insurance company.

If an accident or loss occurs, and a policy's provision has been breached by the insured, the insurer may have the right to deny coverage. In that situation, the insured could find that he or she is without coverage. But, you may ask, what if the breach of a policy provision is unrelated to or had nothing to do with the accident or loss, will coverage still be denied?

The answer to that question will depend upon the state law applicable to the case. In some states (Florida, Hawaii, Illinois, Iowa, Mississippi, Montana, South Carolina, Texas and Washington) an insurer cannot deny coverage unless the breach was causally related to the accident or loss. In other states (Alaska, Arizona, California, Colorado, Georgia, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee and Virginia) a causal connection between the policy breach and the accident or loss is not required for the insurer to deny coverage. The remaining states have not decided the issue one-way or the other.

If you live in a state that does not require a causal connection between a policy breach and the accident or loss, you need to make sure you comply with all of the provisions and requirements contained in your policy. Failure to comply could very well result in a denial of coverage if you are ever involved in an accident or loss.

If you live in a state in which a causal connection is required between a policy breach and an accident or loss, the insurer will have the burden of proving the existence of a causal connection. That may or may not be easy, depending upon the circumstances.

In either case, you would be fighting for coverage. In the aftermath of an accident or loss, a fight over coverage is the last thing an insured should have to worry about. To avoid these situations and to ensure that you will have coverage when you need it, you need to be aware of and comply with the requirements and conditions of your aviation insurance policy. If you need help understanding your policy, talk with an experienced aviation attorney who can review and explain the terms of your policy. Then you can enjoy the security of the aviation insurance policy for which you are paying your premiums.

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Greg Reigel

NTSB Allows Airmen To Waive Exclusion Of ASAP Report From Enforcement Action

by Greg Reigel 2. June 2011 10:52
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In a recent decision by the NTSB, Administrator v. Austin and McCall, the Board determined that an administrative law judge ("ALJ") should have admitted into evidence two Aviation Safety Action Program ("ASAP") reports offered by two airmen in an enforcement hearing. ASAP programs are governed by FAA Advisory Circular 120-66B and typically provide that an airman flying for an air carrier has the option of submitting a voluntary report concerning an incident. Once submitted, the ASAP event review committee (ERC) may review the report, accept the reporting airman into the ASAP, and the FAA then agrees not to initiate a certificate action against the airman based upon the reported incident. AC 120-66B also specifically provides that an ASAP report may not be used for any purpose in an FAA legal enforcement action, unless the report involves criminal activity, substance abuse, controlled substances, or intentional falsification.

In this case, the airmen wanted to have ASAP reports they submitted admitted into evidence at the hearing. However, the ALJ granted the FAA's motion to exclude the ASAP reports based upon AC 12-66B. The ALJ determined that ASAP reports were not subject to review and that such a review would render ineffectual the memoranda of understanding under which ASAP programs operate. (The elements of an ASAP are set forth in a Memorandum of Understanding (MOU) between the FAA, certificate holder management, and an appropriate third party, such as an employee's labor organization or their representatives). Interestingly, the ALJ also acknowledged that this issue was one of first impression for the Board and that the Board needed to decide the issue before he would review the ASAP reports.

After a hearing, the ALJ affirmed the FAA's orders of suspension against the airmen. One of the airman then appealed the ALJ's decision to the full Board. Not surprisingly, the airman argued, among other things, that the ALJ improperly excluded the ASAP reports.

The Board initially noted that the protection provided by AC 120-66B prohibits the FAA from using ASAP evidence in an enforcement action. However, it then concluded that AC 120-66B "does not prohibit a pilot from waiving this protection to submit his or her own ASAP report into evidence." As a result, the Board remanded the case back to the ALJ for him to review the ASAP reports and to consider whether the airmen's filing of their respective ASAP reports protected one or both of them from FAA enforcement action.

It will be interesting to see how the ALJ rules on remand since the Board simply ruled that the ASAP reports were admissible and should be considered by the ALJ. Unfortunately, the Board didn't provide any guidance on whether the ASAP reports should have precluded the FAA from pursuing enforcement action against the airmen in the first place. I guess we will have to see what the ALJ decides.

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Greg Reigel

Oh...that Airplane Smell!

by Jeremy Cox 1. June 2011 17:28
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Some things in life are just quintessentially perfect. You know it instinctively deep-down in your heart without having to ever consciously ask yourself...”do I like this; is this right?” Some experiences like this can be sensed rather than defined, much like spirituality. One item on this list of perfect things for me is that unique scent that all aircraft emit and pervade while either sitting quietly in a hangar, or dancing through the skies.

Even though I often think, tongue-in-cheek of the modified words of Robert Duvall in the 1979 epic Apocalypse Now where he says (and I substitute): “Smell that?..You smell that?..Nothing in the world smells like that...I love the smell of Jet-Fuel in the morning!”; this happens to me every-time that I park my car and get out at the Spirit of St. Louis Airport where my office is.

Coupled with the smell of burnt aviation kerosene, another sensory trigger for me is the noise as well. Unfortunately in this modern age of carbon credit-touting politically correct twits, black-smoke belching-ear splitting jet exhausts have overall been relegated to the past. It is a rare event now when a straight-pipe turbojet flies in and out of my home airport (thankfully we do have several Sabre 60’s that occasionally blast into the skies), but nothing compares to a venerable Stage-Two Gulfstream, or a Viper-powered Hawker, or a Learjet 23. I’m sorry but all three of these birds are music to my ears!

Airshows are about the only places now where you can still joyfully live through and cower under that glorious noise and black smoke. My trigger is tripped when I talk about the type of sonic wave that you get to feel on the inside of your insides. Of course your heart strings are a-twanging and you might have sweaty palms from the adrenaline that is being mainlined directly into your bloodstream so yes you are felling this great noise and spectacle; however I talking about that ribcage thing where you’re largest body cavity, your chest and stomach resonate like a guitar body. That type of cachophany is so great that you experiment to see if the intensity in your guts changes if you open and close your mouth. Without an afterburning jet-pipe available to you, a similar type of resonance can be frequently experienced by bashing on a bass drum that came from a parade band. I guess that gut sounds like those are just instinctual and therefore they race to the core of the many men out there like me.

Jets are all fine and dandy, but real aircraft are constructed from wood, dope and fabric, and the only true path to achieving mental nirvana is in my opinion, the time spent around a flying machine that has a smoke-soot-oil-fire-breathing radial or V12 behemoth bolted to it. Sex doesn’t even start to describe the emotions stirred within by one of these witchy-beauties!

So let’s get back to the premise of this article: ‘that smell thing.’

Most aircraft today are manufactured by the mating of aluminium, steel, copper, plastic, rubber and a touch of leather to complete their creation. Added to these smells is the aroma of hydraulic fluid, engine oil, 100LL or Jet-A. This amalgam of scents produce a heady bouquet that will turn the head of even the most casual observer as they point their eyes and nose towards the emitter of that lovely smell. These smells communicate soul-to-soul as far as I’m concerned.

The true connoisseur however has a demanding nose that won’t get out of bed for this modern- aviation smell as described above. No the only thing to get the died-in-the-wool enthusiast’s Goosebumps raised is the delectable perfume created by the symbiotic relationship created and found in harmony within the structures of a wood and fabric aircraft of the time period between the wars of the 20th century. Forgive me for being rude towards the earlier aircraft of that age, but personally I don’t savour much the smell of castor oil which was predominate in the total-loss oil systems found on many early aero engines.

I have an uncle in England who made a deep impression on me at a young and tender age, one weekend when he and my aunt motored down to our farm in the Westcountry from London in a Porsche. His words were: “Cor I bloody love this car, because it smells just like it would if I was riding inside a lady’s handbag.” Strange words many of you might think, but you know what uncle, I get it!

To make my eyes glaze over just add the following ingredients all mixed together in the shape of a DH82 Tiger-Moth, or DH98 Mosquito:
• Freshly mown grass
• Sitka Spruce
• Mahogany and Birch plywood
• Balsa
• Aerolite resin
• Butyrate doped Mercerized cotton
• Tanned cowskin leather
• Cochineal sozzeled control cables
• Petrol grease
• Mineral hydraulic and engine oils
• High-octane aviation spirit
• Natural India rubber
• Aeroshell 7 grease
• Canvas webbing
• Compass fluid
• Varnish

Oh, that beautiful airplane smell! Who says that machines can never have a soul?

What does your favourite airplane smell like?

Three Reasons to Upgrade From Twin Piston to Turbine

by David Wyndham 1. June 2011 13:26
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If you operate your high performance piston twin for business and are looking at a follow on aircraft, I recommend that you seriously consider the advantages of a single engine turbine airplane.

Please note that I am specifically referring to business use. If you fly for pleasure then you fly what pleases you.  The reasons for selecting a pleasure aircraft can, and should be, based upon emotion. (Provided that you can afford the emotions of course!). Business use aircraft are tools first, fun tools, but tools. They must meet the needs of the business. 

The first reason is performance. No questions there. The turbine engine gives you far superior performance at altitude. Step into a turbine airplane and you get pressurized comfort. Yes, you can get your piston twin up to 14,000, 15,000 feet or even higher. But that pressure altitude has you breathing oxygen through a tube. That and the altitude itself are far more fatiguing than a cabin altitude of 6,000 or 8,000 feet.

Turbine aircraft can also get you to higher altitudes than pistons. The mid 20s are easily reached by most modern turbine airplanes, be they singles or twins. The ride is often much smoother than in the teens and you have many more options open for the avoidance of poor weather, be it convective activity or even icing conditions. 

Turbine speeds beat piston speeds.  You get 50 knots to 150 knots advantage due to the added power of a turbine engine. High speed cruise in a modern piston twin is 170 to 200 knots true. With a turbine single or light twin you can see 250 to 320 knots true. All these performance attributes in favor of the turbine airplane add up to increased productivity. Get there sooner, get there less tired, and get home sooner. That means a better use of business time.

Turbine aircraft are also more reliable. The engines themselves tend to be far more reliable than high-powered piston engines. "Dependable engines" is more than marketing lingo. Turbine singles have an excellent safety record and personally, I'd prefer a turbine single at night, IFR, than a piston twin. Give me two turbine engines and we are all set!  

Turbine engines, if maintained properly, have far longer intervals between overhauls than piston engines. High powered pistons tend to have 1,700 to 2,000 hour overhaul intervals whereas turbine overhaul intervals start at 3,500 to 4,000 hours. Again, for a business, the airplane must be productive. Waiting for an overhaul to be done is not productive. The longer overhaul intervals combined with the speed advantage of a turbine means the turbine engine is on wing for 2.5 to three times the number of miles as the piston engine.

Lastly is operating cost. Wait! We all know that turbine engines both consume more fuel and cost a lot more than piston engines to overhaul. First thing is to adjust that for the speed and overhaul interval of the turbine. As a comparison, the Baron G58 has a maximum payload of 1,195 lbs and cruise at up to 200 knots. A close competitor is a Piper Meridian with a maximum payload of 1,173 lbs and a max cruise of about 257 knots. At high speed cruise the Baron has a specific range of 1.053 NM/lb fuel whereas the Meridian has a specific range of 1.066 NM/lb fuel. So in this comparison, the cost per NM for fuel slightly favors the Meridian. Add to that the lower cost per gallon on Jet-A versus 100LL.

Yes, the overhaul of a turbine engine far exceeds the cost of the piston on a cost per hour (or per mile) basis. The Baron's two engines run about $66,000 for an overhaul at 1,700 hours ($39/hour) while the Meridian's PT6A overhaul is about $150,000 every 3,600 hours ($42/hour). On a per NM basis the Meridian actually comes out ahead due to its speed advantage (about 2%)

.Piper Merdian PA46-500T Beechcraft Baron G58

Selling price (List) of the new Baron G58 is $1.35 million while the Meridian sells for $2.1 million new. Current used price for a 2004 Baron is about $590,000 (44% of its new price). The 2004 Meridian sells for about $1 million 48% of new). Selling price new and used are lower for the Baron. But as a percentage of new, the turbine airplane tends to have a smaller loss in value. So that is where the "advantage" favors the piston twin. However, it is up to you, the buyer, to determine whether the value of the turbine airplane in terms of productivity and performance is worth the additional acquisition cost. 

A turbine airplane, especially a single, is worthy competitor to the piston twin and under close inspection, offers many advantages but at a less than anticipated expense.

Understanding this will open a huge debate, I would really llike to hear your view point (agree or disagree) but give us reasons not a vote!


 

 



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