jcarlyle wrote:
Erik,

Insurance policies are "exclusionary contracts". This legal term means
that if something doesn't appear in writing as an "exclusion", then the
insuree has coverage. This came about because the law recognizes that
the insuree has no ability to change the contract, but rather must buy
it as it comes from the insurance company. To level the playing field,
the law will find in favor of the insuree unless the policy
specifically says in writing that something will not be covered.

I have an SSA policy on my glider issued through National Fire
Insurance of Pittsburgh, whose address is in New York City(!). Nowhere
in the policy does it state that I must operate the aircraft in
accordance with the FARs. I do not have any intention whatsoever of
violating the FARs, but if I did so inadvertently and something
happened, I would still have insurance coverage. I'd also have trouble
with the FAA, but that's another matter!

Interestingly, my policy doesn't say anything about an annual being
required, unless that could be tortured out of the following phrase:
"If (I) know that the aircraft is not certificated by the FAA under a
Standard Airworthiness Certificate in full force and effect while in
flight". It does, as you say, require that I have (a) "a current and
valid FAA Pilots Certificate with ratings and endorsements applicable
to (my) aircraft", (b) "if required, a current and valid Biennial
Flight Review", and (c) "a written endorsement from a Certified Flight
Instructor to solo the same make and model as (my) aircraft.

Bottom line: read your policy very carefully, word by word. If
something isn't specifically excluded, then you do have coverage.

-John

Papa3 wrote:

John,

Absolutely correct. I was operating from memory without the benefit
of having my SSA Group Policy in front of me. I had a policy in the
past which specifically had verbiage to the effect that the aircraft
must be "operated in compliance with all applicable federal regulations
under CFR parts..." I'll see if I can dig that one up.

A few comments related to your post.

- As you note, the SSA Group Policy does in fact specify pilot and
aircraft airworthiness qualifications. There is an endorsement which
modifies the section you cited to include Experimental Airworthiness.
- In practice, the insurer can and will use any limitations to their
benefit if there is a major claim. Everyone needs to remember that
the insurer's goal is to avoid paying claims. So, even if
airworthiness (for example) is not the cause of an accident, that can
be used to void coverage (see the case history in Yodice's article).
I have several more examples of this available.
- As far as all of the different company names and addresses on your
policy, that has to do with the fact that insurance is regulated by the
states. Insurers typically acquire or establish entities in a given
state in order to meet licensing requirements. In our case (SSA Group
Policy) it all rolls back to AIG.

I guess my bigger mission was to point out that there is a significant
personal, financial risk involved in operating at the boundaries of
what is legal. Since the altruistic approach of looking out for our
fellow sportsmen doesn't always work, I hoped that the idea of looking
out for one's selfish interests might be additional incentive to play
by the rules.

Regards,

Erik