On Nov 4, 3:15*pm, Jim Beckman wrote:
At 20:10 04 November 2008, Frank Whiteley wrote:



I'm not sure about the other plans, but your flying (in-motion) hull
coverage is the equivalent of renter/non-owner insurance up to your
hull limits under Costello. *However, if you put it on winter lay-up
(ground only), you lose this protection during that period. * Some
clubs have high deductibles for operating club gliders and encourage
members to have renter/non-owner coverage.

I'm no expert on insurance, but this issue has been discussed
in our club, and I don't think it works the way you are describing.
The problem is, at least for clubs, that each individual member
is, in fact, an owner of the club gliders. *So renter insurance
isn't going to help you at all. *In the case where your own
glider and the club gliders are both insured by Costello, I
have no idea what rules would apply.

Anybody who understands the situation better, feel free
to correct me. *I wouldn't like people to assume coverage
and then find out when it's too late that it doesn't apply.

Jim Beckman

That's why I mentioned 'some' clubs. There are about 134 flying SSA
chapter clubs, a few non-SSA chapter clubs, and perhaps 20 private
ownership 'clubs' dotted around the US. These are subject to a state
statutes governing their incorporation and federal rules regarding
their tax status and their organizing documents. The majority of the
clubs have had an IRS determination at some point. A growing number
have received a 501c(3) determination, which means they can accept
charitable donations. A fundamental tenant of charitable non-profit
organization is the avoidance of 'private inurement' on the part of
any member. This means no one can derive any private benefit. It
does not mean that members cannot be contracted for services, but
there are strict rules for accomplishing this. A requirement for a
501c(3) is that upon dissolution, assets must be distributed to a like
organization. It would be a stretch to hold a member as a partial
owner as there are no rights of to benefit from the sale or rights of
conveyance. Of course, this really depends on the base organization.

Example 1: Texas Soaring Association. Note: All members are
personally liable for the first $3,000 of damage to TSA equipment.
http://www.texassoaring.org/Documents/tsf23.pdf Damage responsibility
http://www.texassoaring.org/Document...ops_manual.pdf See page
64. I've discussed this with officers of TSA and they said that non-
owner/rental insurance is encouraged. TSA is a 501c(3) nonprofit
organization and no rights of ownership are conveyed in the governing
documents, in fact, they are denied. In this case, non-owner/renter
coverage appears appropriate. Of course, in exchange for cheaper cost
of entry and dues, they may be passing on extended costs to some
members.

Example 2: Caesar Creek Soaring Club is an Ohio non-profit, with no
IRS determination. The entity owns no assets. Each 'Member' agrees
to purchase 12 shares in the Soaring Society of Dayton, which owns the
gliderport and equipment and is an Ohio corporation. 4000 shares in
SSD have been issued. Other membership types are not required to own
shares. This clearly defines 'Members' as owners. They also have a
system of differential dues and time purchase of the shares at a
monthly rate and an annual surcharge of 10% if less than 12 shares are
currently owned. In this case, non-owner/rental coverage, by
definition, likely does not apply.

Of the 160-odd clubs that may be operating in the US, there are likely
165 business models, depending upon who is asked;^). Insurance
exposure varies and definitive guidance should be sought from the
brokers and underwriters providing the services. These are important
issues and organizations should fully understand how the boundaries we
operate within; insurance, FAA rules, state and federal statutes,
governing documents, and member considerations, are best leveraged.

As always YMMV,

Frank Whiteley