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How Much Aviation Insurance Should I Buy?

Whether you’re buying insurance for your first plane or you’re renewing a policy for the umpteenth time, the question you should be asking yourself is, “How much is my airplane worth?”

Aviation insurance policies are generally written on an “agreed value” basis. That means when the policy is issued, the underwriter and you agree that the plane is worth that specific amount; the insured value. Unlike most automobile polices when the insurer tells you what your car is worth, if your aircraft is a total loss, you will receive the amount stated in the policy.

You need to make sure that the agreed value is an accurate reflection of the true value of the plane. If you underinsure the plane, the insurance company may consider it a total loss even though the damage is repairable. Conversely, if you overinsure the plane, the insurance company will be reluctant to declare a substantially damaged aircraft a total loss.

One of the reasons your broker should be an aviation insurance specialist is that they can assist you with the valuation of your aircraft. They have access to industry resources such as the Aircraft Bluebook or Vref and can work with you to arrive at a reasonable value. They can help you assess the impact of your new engine, avionics or paint job on the value to purchase.

At The Aviation Insurance Agency in Bedford, MA, we have over 50 years experience in the aviation insurance industry. We are pilots and we understand airplanes.

We’ve been based at Hanscom Field for 25 years and all we do is aviation insurance. When it comes to insuring your aviation needs, we can provide you with professional guidance and unsurpassed service.

Contact us for any of your questions whether you’re thinking about your first plane or expanding your fleet.