Flight School Solo Insurance

[RkyMtnHI]

Well Goldy, here comes another one of those questions!! :-)

 

What is the industry standard for Solo Insurance? One flight school that i know charges up to $1200 for "solo insurance" but in fact does not buy or provide any real insurance. I think the plan is to escrow the money in a account, and in the unlikely event that there is an incident, pay the deductible with that money. I am positive that this school in particular does not escrow the money but puts it into the operating budget of the school. I believe that others do the same but am not sure of that.

 

In looking for a better way to do this, and actually provide real insurance (i think there is also an issue of selling insurance w/o an insurance license that we wanted to avoid), we looked into and recommended xinsurance to our solo students and instructors. The other day when our latest solo student signed up for the insurance the price had gone up by almost 30% in less than one month!!! When we called and asked about it they said that they had had claims which made the insurance go up!! My regular insurance broker said that there were other issues, that one company had sold shares in another which caused prices to increase. This is a bummer for us as xinsurance.com seemed like a great alternate for deductible coverage (not GREAT coverage, but at least some!).

 

If you know of a better way please share it with us.. AOPA has solo insurance, but it doesn't cover helo training... My broker and a friend's broker are looking into the subject, but with not much hope!

 

thanks in advance!

 

aloha,

 

dp

[Goldy]

What happened to the easy questions??

 

Yeah, I know most schools collect some type of fee and use that to offset any deductible (usually 10K) of the insurance. Whether or not that constitues "offering insurance for sale", I really don't know. I'll send a note over to Leading Edge Insurance to see if they can point me somewhere.

 

See ya tomorrow!

 

Goldy

[HelliBoy]

It sounds like you're talking about insuring against a deductible, which is usually 5% or 10%. I do with my students what was done where I trained (Bristow); when you sign up you sign a clause stating that you are responsible for the deductible if you are flying in any way outside of the operating policy. Ex.) No solo EPs are allowed- if you ball it up solo while practicing an auto you're paying the deductible.

 

Granted the most anyone would be liable for with my machines would be $15k, a risk that most people are willing to accept. Especially if its only if they aren't playing by my rules when the loss occurs.

I think it's unreasonable for schools to charge a 1 time renters fee to insure themselves against a deductible. Insurance is to protect against the bulk of an entity's risk-not all of it, otherwise people would act recklessly and file claims constantly. I think it's on the unethical side to fleece an extra $1200 from your students with the beneficiary of that protection going to the operator. Thats just me tho. If you have faith in your CFIs, machines, and mechancis there is very little exposure from a solo student as long as they're prohibited against practicing risky maneuvers.

 

 

If you want to do like the school you mentioned I wouldnt worry about an insurance lisence. When students sign up, charge a 'solo insurance surcharge' and if its in the operating budget it wouldnt qualify as an insurance fund anyways. By calling it a surcharge you're saying that you could roll it into the hourly rate for the machine towards paying the policy, not the deductible. You dont need a lisence to sell something that is insured, just if your selling a policy.

[glennahall]

If a school wants to have its deductible covered by the student in case of a mishap and doesn't want to trust that they will cough up the amount if they need to, then they could require a solo DEPOSIT. That's REFUNDED if it's not needed. If they really only want to be assured of having the deductible covered and not making some extra cash then a deposit or actual deductible insurance (bought from a licensed insurance salesman) should take care of their concern.

 

Frankly, I think Helliboy's way of doing things is pretty sweet for everyone involved. Like he said, "If you have faith in your CFIs, machines, and mechancis there is very little exposure from a solo student as long as they're prohibited against practicing risky maneuvers."

 

Reminds me of something I was thinking about a short time ago... Black Boxes in rental/training birds. Let's you know if someone is jackin' around the wrong way. Do they make inexpensive (light-weight) devices that could fit this sort of bill?

 

Have a great weekend!

 

Glenn

[RkyMtnHI]

Reminds me of something I was thinking about a short time ago... Black Boxes in rental/training birds. Let's you know if someone is jackin' around the wrong way. Do they make inexpensive (light-weight) devices that could fit this sort of bill?

 

Have a great weekend!

 

Glenn

 

http://coloradoheliops.com/thefleet/79-gpstracking.html

 

We use "spot" tracking devices to follow our birds when they are on solos or cross country flights. Mostly for safety, but expect it will keep some pilots a little more honest. You can check them out on the link above. When i was flying RC there was a system that would track almost every variable of the flight, can't remember the system. It would be easy to modify tho to use in a training aircraft. I would love to track; temps, fuel, overs-peeds, low rotor horn, vsi, etc.. the system i'm talking about even sent the info to a laptop.

 

dp

[AngelFire_91]

Hey Dp,

Here is what we use in all of our Heli's.

 

http://appareo.com/products/data_logging.php

 

And the playback software is an amazing tool for the training environment. It allows you to replay the whole flight back (on top of satellite imagery if you want) and graphing all the different parameters from Airspeed, Bank angle, Even MP. They also have an alert feature that, after the flight has been downloaded, it will alert you to any parameter that was exceeded, and you set the limits of the parameter, so everyone could have a different limit.

 

http://appareo.com/products/alerts.php

 

Give me a call if you have any other questions or need to know anything. We were one of the original "pilot" schools testing the system and software. I also think you can download a "Trial" of the software. I have 100's of flights recorded so if you download it, let me know and I'll send you some files to play with.

[delorean]

Solo insurance is a scam. They are the flight school and THEY ARE RESPONSIBLE for training you to be proficient, then signing you off for supervised solo.

 

It would be very easy for any student that damaged a helicopter during solo to tell the judge the school "...didn't train you well enough...", "...they told me I was ready to solo..." The school would have a better case against the instructor that signed them off, than a student with 20-30 hrs.

 

For anything negligent, try to prove it. Unless you have a tracking system or "black box" it would be very hard to prove--after all, they are still in TRAINING and this was SUPERVISED SOLO.

 

And that system might actually be a bad thing--if they're out violating a FAR or doing something grossly negligent, the system captures that, and you present the evidence to the FAA/NTSB; what happens when the insurance company gets ahold of it? If that system shows that the student did something outside of the policy, they're not going to cover it. Now you're going to be suing the student for 100% of the hull, not just 10%. Good luck.

 

A rental/solo agreement is the best you can do. Write a restrictive endorsement in their book as well. After the insurance settles, then you can go with a civil case against the student if you think you can prove gross negligence. But word gets around, and if you get in the habit of suing your students and instructors, you will eventually have neither.

 

Renter's insurance is another story......they're no longer a student in training. I wouldn't get it though.

[thrilsekr]

I was told my insurance deposit was to cover the heli on the ground. Damage from swinging the doors open, hitting another ship on the way out of the hangar... You get the idea. As soon as the engine is running (or in flight maybe) the regular insurance kicks in and takes care of any mishap of that sort.

If that is the case, I have always wondered why I only get some, not all, of my deposit back?

[delorean]

I was told my insurance deposit was to cover the heli on the ground. Damage from swinging the doors open, hitting another ship on the way out of the hangar... You get the idea. As soon as the engine is running (or in flight maybe) the regular insurance kicks in and takes care of any mishap of that sort.

If that is the case, I have always wondered why I only get some, not all, of my deposit back?

 

That's complete BS.

 

If they have a loan on that helicopter, it has to be insured "rotors in motion" or static. If they lease that hangar or office, they also have to have "shop keepers' / slip 'n fall" insurance. That thing is covered if the hangar falls on it which means it's covered when you're pushing it.

 

If it's that damn dangerous to open a door and push the bird out, then their employees should be doing it for you.

 

We all know more damage occurs on the ground due to improper handling in the air. Since you only ding one part (rather than and entire rotor, drive, and engine if in the air), they're going to probably be under the deductable and not turn it in. But to make a student purchase "insurance" or lay down a deposit is bending them over big time.

 

What happens if they find a ding on that helicopter and they blame you even though you didn't do it? They already have your money......

 

When you run a flight school it is implied you're going to have students and low time instructors damage aircraft. You're out doing emergency procedures, lots of takeoffs and landings, and other manuevers that can be easily screwed up and damage the bird. Hopefully it's minor--the occasional overspeed, bend skid tube, etc, but sometimes it's worse. You suck it up, fix the helicopter, and have a long talk with the CFI about how to prevent it in the future. That's the risk you take when you run a school.

 

But you don't go out and charge students--anticipating a mishap--for a mistake that might not have been theirs. It comes down to a lack of instruction in the end. You can't blame misbehaving little kids either.......it's the parents' fault.

 

The only time I thing a deposit or renter's insurance is justified is if a certificated pilot--that you did not train--comes to rent the helicopter. A one hour checkride is hardly enough to gauge their performance. If they start additional training with you for another rating or do 5-10 hrs, then go ahead and cover them. When I was a CFI, we would not rent our a/c to anyone we did not train (unless they did the aforementioned.)

 

You need to find another flight school before your money "disappears".

[BOATFIXERGUY]

When I had a school, I offered a "damage fund" for students. This was established for the students to pay for damage they did out of stupidity that would not be an insurance claim. I.e.: scratching their watch across an $8000 windscreen, pushing on the glass on the door instead of the handle and putting their hand thru the glass, leaving a $4000 door open and having another aircraft's downwash or a change in wind destroy it, leaving the oil cap off and frying the turbo and engine when it pumps all of the oil out, etc...And yes, all of this crap happened too. It was a one time fee of $100 that went into an escrow account.

 

Students and some of you may think, hey that's just part of the business....it's not. Own your own $400,000 + helicopters and have it down for weeks and losing money and tell any owner that. You can't claim everything on your insurance policy...if you do, you'll find yourself without insurance.

 

As far as the deductible for inflight "mishaps," that IS part of doing business. i had a student destroy an aircraft after I owned it for only 9 days on a solo. I didn't go after him for the accident for the $15,000 deductible...I ate it. Sh%t happens.

 

p.s. i had one student drip into the fund 3 times...not the brightest kid in the world.

[delorean]

When I had a school, I offered a "damage fund" for students. This was established for the students to pay for damage they did out of stupidity that would not be an insurance claim. I.e.: scratching their watch across an $8000 windscreen, pushing on the glass on the door instead of the handle and putting their hand thru the glass, leaving a $4000 door open and having another aircraft's downwash or a change in wind destroy it, leaving the oil cap off and frying the turbo and engine when it pumps all of the oil out, etc...And yes, all of this crap happened too. It was a one time fee of $100 that went into an escrow account.

 

Students and some of you may think, hey that's just part of the business....it's not. Own your own $400,000 + helicopters and have it down for weeks and losing money and tell any owner that. You can't claim everything on your insurance policy...if you do, you'll find yourself without insurance.

 

As far as the deductible for inflight "mishaps," that IS part of doing business. i had a student destroy and aircraft after I owned it for only 9 days on a solo. I didn't go after him for the accident for the $15,000 deductable...I ate it. Sh%t happens.

 

p.s. i had one student drip into the fund 3 times...not the brightest kid in the world.

 

 

That sounds like an excellent program, that was handled properly. Optional, low cost, put in escrow, etc. That's the way it should be.

 

But you know most of these schools aren't using that money that way. Same goes for block time. It should be escrowed or put into savings by the school and tapped as the costs are incurred. These guys that are using block time to pay the current bills are behind the eight ball and will eventually (or have) gotten caught.

 

The training business is prone to mishaps and it is part of the business. The only way to combat it is really good instructors who are covering all the bases with the students. A staff of low time guys, making minimum wage, who are only there to get their hours may not give a crap if your $4000 door gets broken. Like any other business, the employees are the main asset, not the helicopters. If you don't take care of them, they're not going to take care of your equipment and that will be passed onto the students.

 

The only major damage we ever had was a tail strike--broke the t/r gearbox output shaft, t/r, and lower stab & stinger. It was the second solo for a student, instructor had 7000 hrs. The student had a back injury early that year and was really complaining about the pain that morning when he soloed for the first time. He came back that afternoon, damaged the a/c, then helped us pull the helicopter out of the mud and get it onto a trailer.......all pain free. Get it? We're almost positive he took his painkillers at lunch. Either way, we cut him loose as a student. There was no way we could get that money out of him if we tried, nor force him to take a drug test that day.

[BOATFIXERGUY]

That sounds like an excellent program, that was handled properly. Optional, low cost, put in escrow, etc. That's the way it should be.

 

But you know most of these schools aren't using that money that way. Same goes for block time. It should be escrowed or put into savings by the school and tapped as the costs are incurred. These guys that are using block time to pay the current bills are behind the eight ball and will eventually (or have) gotten caught.

 

The training business is prone to mishaps and it is part of the business. The only way to combat it is really good instructors who are covering all the bases with the students. A staff of low time guys, making minimum wage, who are only there to get their hours may not give a crap if your $4000 door gets broken. Like any other business, the employees are the main asset, not the helicopters. If you don't take care of them, they're not going to take care of your equipment and that will be passed onto the students.

 

It did work out pretty well thanks! As far as companies using the funds elsewhere, we did a monthly safety newsletter and posted the amount in the fund on the heading line for all to see. You really need to have this money set-aside for the mishaps. They will happen, and usually when you're running tight of money for payroll or your fuel bill. If you don't have the funds ready, now your aircraft is down and not making any money.

 

And I think I had some really good instructors (once I figured out what to look for), and I paid them very well....maybe that's why I never made any money! Hell, during the ride season, my ground people make more than most CFI's I know of!

[svtcobra66]

AIG (they keep changing their name but its still AIG) offers helicopter renter's insurance, but it is extremely expensive and only available to experienced helicopter pilots, which kind of defeats the point (i was quoted when I had 500 hours and it was several thousand dollars for any useful amount of coverage).

 

Students- don't pay any kind of "solo deductible" or "solo insurance," all that means is that the school you are flying with isn't properly insured and you should take your business elsewhere. Yes, deductibles are expensive, but its a cost of doing business, and all of the flight schools I have had experience with (yes, rotorwing) NEVER charged for anything like that. There's enough companies out there struggling and doing business the right way, don't waste your time, money, and possibly much more (in the event their inproperly insured helicopter injures or kills someone and you get stuck with the bill) with a school that isn't doing business correctly. If you're playing games with insurance to cut your costs, you're not going to last long anyway. And good luck getting students to come to your school when they end up paying for what in the end was sh*tty instruction.

Edited September 6, 2009 by svtcobra66