What aviation insurance covers
Aviation insurance protects aircraft owners and operators against damage to the aircraft and against legal liability for injury and property damage. Buyers range from airlines and charter operators to corporate flight departments, flight schools, private owners, airports, maintenance providers, manufacturers and drone operators. Because single losses can be very large, aviation risks are typically written by specialist insurers and shared across the global market, including Lloyd's syndicates.
Main coverage types
- Hull all risks: physical damage to the aircraft on the ground and in flight, usually on an agreed value. A cheaper ground-only or not-in-motion option exists for stored aircraft.
- Liability: bodily injury and property damage to third parties and passengers. A combined single "smooth" limit is preferable to policies with low per-passenger sublimits.
- Medical payments: optional cover for passengers' medical expenses regardless of fault.
- Hull war and allied perils: standard aviation policies exclude war, hijacking and similar perils through the market clause AVN 48B, so this is bought back separately.
- Airport, hangarkeepers and products liability: for airports, FBOs, maintenance shops and manufacturers.
- Drones: hull and liability for commercial unmanned aircraft.
Legal requirements in the US and abroad
In the US, the Department of Transportation rule in 14 CFR Part 205 requires direct air carriers to carry third-party liability insurance of at least $300,000 per person and $20 million per involved aircraft per occurrence, or $2 million for aircraft with no more than 60 seats or 18,000 pounds of payload. Carriers that fly passengers must also insure at least $300,000 per passenger, multiplied by 75% of the aircraft's seats. Federal rules do not generally set a liability minimum for private, non-commercial aircraft, but some states, airports, lenders and lessors do.
On international flights, the Montreal Convention governs airline liability. After the ICAO review, the limits rose on December 28, 2024: 151,880 Special Drawing Rights per passenger for death or injury (the threshold above which the airline can defend itself by proving it was not negligent), 6,303 SDR for delay, 1,519 SDR for baggage and 26 SDR per kilogram for cargo. Other countries set their own minimum insurance rules for operators.
Common exclusions
- Flights by a pilot who does not meet the policy's pilot warranty (named pilots, ratings, hours, medical certificate).
- Uses not declared, such as rental, instruction or charter for hire on a private policy.
- Operating without a valid airworthiness certificate or outside the geographic limits.
- Wear and tear and mechanical breakdown, except resulting damage.
- War, hijacking and confiscation unless bought back.
What drives the price
- Aircraft type, value, age and number of seats.
- Pilot experience, ratings, time in type and recurrent training.
- Type of operation: private, corporate, charter, training or airline.
- Base airport, hangar storage and operating area.
- Liability limit, deductibles and loss history.
How claims work
Report any accident or damage to the insurer immediately and secure the aircraft and records. In the US, certain accidents and incidents must also be reported to the National Transportation Safety Board, and wreckage should not be moved except as allowed. The insurer appoints aviation adjusters and, for hull claims, decides between repair and payment of the agreed value. Liability claims are defended by the insurer within the policy limit.
How to choose and compare
Describe the aircraft, pilots and every intended use accurately, because misdescribed use is a common reason for declined claims. Compare pilot warranties, hull value, smooth versus sublimited liability and territory. Operators with ground staff should coordinate with workers' compensation and general liability. Polis Re helps you compare insurers and request quotes for aircraft, fleet and drone coverage through one request.
