DEFINITION of 'Aviation Accident Insurance'

Aviation Accident Insurance provides coverage for injuries resulting from an aircraft accident. Aviation accident insurance covers injuries sustained by pilots as well as travelers, with the type of coverage typically accidental death and dismemberment (AD&D).

BREAKING DOWN 'Aviation Accident Insurance'

While the likelihood of sustaining an injury during a flight is low, the potential for accidental death or injury is a risk that can be insured against. Because the demand for aviation accident insurance is less than the demand for many other types of insurance, such as general liability or life insurance, the number of insurance companies offering this type of policy is relatively small.

Types of Aviation Coverage

Some insurance policies will exclude injuries sustained while aboard an aircraft, sustaining a demand for coverage by travelers. An aviation exclusion on a life insurance policy, for example, will exclude injuries sustained while aboard a small aircraft if it is deemed to not be part of a regularly scheduled airline.

Companies may purchase aviation accident insurance to cover employees who are traveling for business. The policy will provide payment to an employee (or his or her beneficiaries) in the case of death, dismemberment, or disability, and may provide coverage for trips to and from the airport. This type of policy is a group policy, meaning that the individual employees are covered under a master agreement.

Airlines typically purchase a different type of aircraft liability coverage for employees serving as the pilots or crew of a commercial aircraft. The premiums for this type of policy may differ from that of a policy purchased by a non-aviation commercial enterprise because pilots and crew are exposed to a greater set of aviation hazards, including flying to and from different airports in various weather conditions on a frequent basis. This type of policy may also be more expensive if the planes are operating in areas with less developed airports and flight management systems.

"About a dozen underwriters provide general aviation insurance. Some of the major players include AIG, Global Aerospace, Starr Aviation, Phoenix Aviation Managers and USAIG. Major brokers include AOPA Insurance Services, Falcon Insurance and Hardy Aviation Insurance. There is also one underwriter you can purchase a policy from without a middleman — Wichita, Kansas-based Avemco," according to Flying Magazine. "Many underwriters will quote only a specific risk to one broker, a system referred to as locking rates, which makes it difficult to shop around. The aviation insurance business is quite specialized, so you will likely get good service from whichever broker you decide to do business with."

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