In order to understand how aircraft insurance appraisals for aircraft insurance adjustments are calculated, the various terms and phrases can be confusing.
Insurance companies comply with standard definitions to ensure that adjustments are fair and consistent.
Important Terms for Aircraft Insurance Adjustments
Purpose of Use –They outlined the uses approved for various aircraft. Such uses include pleasure and business, commercial purposes, or for industrial help.
OPW or OPC – This is an available warranty for pilots that outlines the minimum requirements for a pilot to fly an aircraft when there is no approval from the insurance company.
Name Insured – This is the name indicated on the insurance policy. Thus, the policy owner.
Breach of Warranty – In the case that the insured violates the terms outlined in the policy, the insurance company has the right to invalidate the insurance policy.
Additional Insured – The individual or organization that seeks to be represented and insured by an insurance company.
Sub-limit – This is the limit set by the insurance company indicating the extent to which the company covers the damage or occurrence in every insurance premium.
Smooth Limit – In this policy, the insurance company has no internal limits on the extent of the coverage. The individual can accrue any maximum imaginable limit according to his premiums.
Subrogation – This order permits the insurance company to pursue third parties to recover damages on the insured.
Waiver of subrogation – This prompts the insurance company to stop pursuing a third party on any damages incurred on the insured. This only applies to an aircraft’s physical damage. This ensures the pilot from being sued by the insurance company in case of damage to aircraft in the line of work.
WAR & Related Perils Coverage – Various covers are exempt from the normal coverage that insurers have to give. This, for instance, includes confiscation, hijacking, rebellion, and strikes, among others. An additional premium is required for such covers.
Products Operations Liability Insurance – This policy insures the holder from third-party liabilities as a result of the use of the product installed on the plane
Hangarkeepers Legal Liability Insurance – A General Liability policy insures the holder if that policyholder causes damage to the aircraft while it is in their custody.
TRIA – Abbreviation for Terrorism Risk Insurance Act. Usually purchased through additional premium.
Building Insurance – This insurance covers buildings. Buildings may be at risk and need insurance during natural disasters and acts of terrorism.
Complex Aircraft – Some elements include flaps, a controllable pitch propeller, and retractable landing gear.
Conditions – The insured’s obligation to the insurance company in the premium and insurance cover length.
Deductible- Before the insurance kicks in, there is an amount that the insured has to pay upfront. For instance, a $10,000 hull damage commands a $3000 deductible from the policyholder.
Hull Insurance – The repairing costs of an aircraft in the case of an accident are covered via hull insurance.
Insuring Agreement – This section outlines the company’s obligations to the insured.
Loss of use coverage – In the case of the inability of a policyholder to use their aircraft in the case of an accident, the loss of use coverage comes into help in covering the losses and liabilities.
Medical payments coverage – This covers the medical needs of the insured, from dental needs to other expenses and needs for the pilots.
Named Pilot – This is the pilot who the owner names on the insurance policy of an aircraft.
Pollution Liability – In the case of damage or injuries to the staff due to leakage in chemicals and aviation fuel, this policy comes into effect.
Exclusions – The scenario where the insurance company decides against covering a claim by the insured.
Endorsements – Agreed upon changes to the original insurance agreement or policy.
Fixed-based operator – Known as FBO. Provides aviation services such as maintenance and repair as well as fuel stops.