Insurance during Construction

[Jimmyg]

I haven't checked with my homeowners insurance yet but expect they do not cover an airplane being built at home. Where have others of you gone for insurance during construction?

Thanks

[Dave S]

Jim,

Home owner's insurance usually doesn't know what to do about airplanes - a person could check with their home owner's insurance provider to be sure.

I purchased my construction insurance from Falcon Insurance.

If I recall - Falcon wanted in the neighborhood of 1% per year for construction insurance. Don't know if that is the same today but a quick check should determine what is current.

I figured the cost was well worth it. I have to depend on good choices because I know what my luck is like....:o

Think of the cost of construction insurance as an additional incentive to get to work and get it flying...:).

Sincerely,

Dave S
KF 7 Trigear - Flying
St Paul, MN

[DesertFox4]

I've never heard of a homeowners policy covering aircraft or aircraft projects. You will need a specific policy for construction. Shouldn't be hard to locate one. Falcon is fine. I used AIG through a broker in Minneapolis. If you want his number let me know. I still have my insurance with them and have had good service. Wish I could give more detail but it's been over 8 years now since first flight and I can hardly remember what I did yesterday.:rolleyes:

[Agfoxflyer]

I have State Farm for homeowners. When I asked the question about a rider for the airplane construction, the said NO WAY. I used Avemco for Construction policy. Cost about $350 a year for $40,000 coverage.

[n85ae]

My homeowners policy has a blanket amount of coverage towards general
stuff in the home. It is far more than the contents of my home. The only
thing that could destroy my kit in the home is fire, in which case the
blanket coverage would easily pay for the kit along with the rest of my
belongings ... So I don't have kit insurance.

Regards,
Jeff

[Tom T]

Love this topic...
I too have State Farm Insurance and have covered two project under my homeowners. My agent is a pilot and officer for one of our local flying clubs, so has a little more that the average insight to the issue.

The rub on this is that when questioned closely the underwriters do not consider a kit under construction an airplane until your airworthiness has been issued. So people might feel this is jinking the system but we have emails documenting the ruling in my files in case we had a loose and a forgetful underwriter.

You can also get separate coverage the Nation Air and others.

Keep building

[jtpitkin06]

Your airplane is not covered by any homeowner policy just as your automobile, motorcycle or boat are not covered if your garage burns down. Check your exclusions. Homeowner contents include household goods and appliances but almost always exclude motor vehicles, art work, jewelry and any other big ticket items.

Falcon provided me with a non-flying builder pollicy for a hull value of $35K for just $250 a year. It includes transport on a trailer to the airport. It is peace of mind to know if the shop catches fire the airplane will be covered. I'm not too worried about theft or flood in my area but they are covered, too.

Just be sure to save your receipts in a safe location (not in the shop) to prove your investment. You will also need a reserved registration number. A full registration is not required.

If you are building in a rented space like a hangar or a rented garage you absolutely need a separate policy for loss and liability. I know of one case where the wind blew a hangar door into a non-insured airplane. The aircraft was a total loss. The owner didn't renew the policy because it was in annual inspection and wasn't flying. He though he could get a "free" month. Oops!!! Scratch one Bonanza from the registry.


John Pitkin

[n85ae]

Not the case with my policy:

My policy with State Farm specifically pays a blanket amount of $dollars$
towards the "contents" of the house in the event it is destroyed. I do not
need to say ,my airplane went with the house, I just say - My house is
destroyed.

They pay replacement cost of house + blanket amount

Fire, or major storm is the most thing I can think of that would likely wipe
out my garage, and kit. So this would entail the entire house going away,
as well ... So I'm ok with just getting a blanket payout.

Regards,
Jeff




Your airplane is not covered by any homeowner policy just as your automobile, motorcycle or boat are not covered if your garage burns down. Check your exclusions. Homeowner contents include household goods and appliances but almost always exclude motor vehicles, art work, jewelry and any other big ticket items.

Falcon provided me with a non-flying builder pollicy for a hull value of $35K for just $250 a year. It includes transport on a trailer to the airport. It is peace of mind to know if the shop catches fire the airplane will be covered. I'm not too worried about theft or flood in my area but they are covered, too.

Just be sure to save your receipts in a safe location (not in the shop) to prove your investment. You will also need a reserved registration number. A full registration is not required.

If you are building in a rented space like a hangar or a rented garage you absolutely need a separate policy for loss and liability. I know of one case where the wind blew a hangar door into a non-insured airplane. The aircraft was a total loss. The owner didn't renew the policy because it was in annual inspection and wasn't flying. He though he could get a "free" month. Oops!!! Scratch one Bonanza from the registry.


John Pitkin

[n85ae]

In fact I have a couple valuables in the house that I wanted to make sure
were covered so I called them, and they asked "are the valuables plus the
contents of your house in excess of the blanket amount?". I replied "no
they were not" they said "don't worry about it then, the blanket amount
would be paid if your house burned"

Your policy might be this way as well, if you call to say "is my Kit Plane
covered" they might say NO! However, your payout if your house burned
might easily cover the cost of the kit in addition to the rest of the house
and belongings. So why bother insuring it???

Regards,
Jeff

[rogerh12]

Everyone keeps mentioning fire damage, but those Rotax 912s are a pretty penny these days. A guy around our club told me a story about a fellow that went out to his plane only to find the Rotax Engine had been removed overnight, with a chain saw !!!!
Like John, I had the Falcon hull (non flying) insurance on my Zenith 601 during the rebuild stage, and it was a fair deal. As a plane can get trailered around in the construction phase, that's a good time to get it damaged by a car or truck or anyone else not paying attention (they are kind of vulnerable on that trailer). The insurance covered the plane during transport too, which gave me piece of mind.
Roger

[birddog486]

I took the safe route also going with an under construction policy through Falcon insurance. For the $250 per year fee it's a piece of mind thing.

If theres a fire or theft I know there wont be any issues and I'm covered. My homeowners policy also has a blanket section that says it covers contents but the small print in the exclusions for the policy state that aircraft are not covered. I had to specifically ask for a copy of the exclusions on my policy.

If you look at the Bill of sale for your kit I'm guessing it reads the same as mine calling it an airplane. Good luck trying to get a home owners policy to pay for that.

[n85ae]

On the other hand if you have $50K in personal property in your house, a $20K
kit, and it burns to the ground. If your insurance pays a blanket $250K plus
the replacement of the house ... Then you're in good shape.

On the other hand getting it smacked on a trailer is definitely a reason to have
builders insurance.

Regards,
Jeff

[Flienlow]

What does construction insurance usually cost?

What about after the plane is built? What do people usually have to pay to insurance their homebuilt plane?

[jtpitkin06]

Guys and Gals,
There are some things that need clearing up here. This is the voice of experience having suffered a fire in my garage back in 1980. My car, tools and equipment were destroyed along with much of the house. Now, I know that all policies are not the same, but I do know that they are more similar than different. They are written to exclude instead of include.

That “blanket” policy is not a blank check. If your policy says contents up to $100K and you have a loss of a box of oranges in your shop you do not get a check for $100K. In fact, the adjuster will dig through the ashes to confirm you actually had a box of oranges in the shop before they pay out a dime. After my 1980 fire I had to go through with a camera and show pictures of every tool, ladder and lawn mover that burned or melted.

If you say your airplane is “personal goods” the adjuster will look at the burned pile and give you about $100 for “steel tubing/jungle gym.” You’ll need to prove what it was worth and a lot of that value is because it is an airplane. That is why you need to save receipts in a location not in the shop.

So, if you believe the insurance agent that your airplane is covered under your home policy, then ask him or her for the phone number of the underwriter. Confirm with the underwriter that your airplane is covered. Then get a letter with that interpretation IN WRITING. If they won’t give you a letter, then you are not covered. Don’t avoid the word airplane. When it goes to court it will come out that your pile of bent tubing and melted plastic was an airplane and that’s when things get sticky. It is better to list up front the word “airplane” right on the policy.

Now, if your financial condition is such that you can walk away from a $35K pile of ashes, then don’t bother insuring it. That amount of loss would sting me a bit so I insured my airplane for construction. The $250 annual premium is just part of the construction cost and I sleep really well.

John Pitkin
Greenville, TX

[DesertFox4]

Thanks John. As an ex-insurance agent your experience is spot on. No household insurance policy I've ever sold or read would cover an aircraft weather it is in parts or complete or airworthy or not.

You are also correct that you will have to prove your losses when settlement time comes. No insurance company will issue a large check until the claims adjuster or adjusters have investigated. Having an up to date household inventory list with photos and serial numbers helps tremendously and of course you want to keep a copy either in a fireproof safe or keep a copy off site.

Just an FYI- all homeowners policies have specific dollar limits on certain items. These include, but are not limited to: jewelry, firearms, musical instruments, furs, any collectables or sets of collectibles, art work and if I remember correctly tools/equipment used for earning a living.