Flying club insurance is one of the most common topics we hear about in the Flying Clubs Initiative at AOPA, and for good reason. Without proper coverage, a single accident could put a club in serious financial jeopardy. This month, we’re diving into the key questions clubs should be asking about insurance: What drives cost? What makes a club uninsurable? How can we build a safety culture that keeps premiums manageable? And what should you know when working with brokers?
Managing Sticker Shock: Shared Costs Make a Big Difference
One concern we often hear from prospective club founders is the sticker shock of the initial insurance quote. While the total premium might seem high at first glance, it’s important to remember that this cost is shared among all club members. For example, a $6,000 annual premium split between 10 members comes out to just $600 per person, often less than a single renter’s insurance policy for frequent flyers. As your club grows and builds a strong safety record, you may also qualify for better rates over time.
Equity vs. Non-Equity Clubs: Why It Matters
Let us start with a foundational distinction: equity vs. non-equity clubs. It is a question your insurance broker will ask early on, and changes things.
This difference affects how insurers view risk and liability. For example, Avemco only underwrites equity clubs, while brokers like Assured Partners Aerospace can work with both models.
Who Should You Work With? Broker vs. Direct Underwriter
We typically recommend two major aviation insurance providers:
If your club is leasing an aircraft owned by an LLC, the club would typically carry the insurance policy. The aircraft owner might consider Directors and Officers (D&O) insurance for added protection.
What If Your Club Is Considered Uninsurable?
It is rare, but it can happen. If your club is facing high premiums or denial of coverage:
Students and Instruction: Proceed with Caution
Thinking of offering flight instruction in your club aircraft? That’s great, but it comes with important caveats. According to FAA Order 5190.6B, flying clubs are not permitted to operate as flight schools. This means clubs cannot advertise or conduct instruction for profit, nor can they offer training to non-members.
However, instruction is allowed under specific conditions:
The truly best way to conduct instruction is to allow the student pilot to pay the CFI directly. This keeps you far away from the line of providing instruction. The club member, in this case, is getting owner-like privileges.
These rules are in place for safety and to allow flight schools to do what they do best, teach people to fly. The airport sponsor also has a general responsibility to protect commercial tenants on the field. Violating the FAA order could jeopardize your club’s standing with the airport sponsor. An airport manager (sponsor) could shut down the flying club. It is a long and drawn-out process to file complaints with the FAA and it’s best to operate the right way.
Additionally, offering instruction, even within the allowed framework, can increase your insurance premiums. Insurers view student pilots as higher risk, and clubs that allow instruction may be subject to stricter underwriting or higher rates.
To stay compliant and maintain good relationships on the field:
Instruction can be a fantastic way to build skills and community within your club, but only if done carefully and within FAA guidelines.
How Can You Lower Your Premiums?
There are several proactive steps your club can take to demonstrate commitment to safety, and potentially lower your insurance costs:
Here’s the key benefit for flying clubs:
If every member of your club completes a WINGS phase, many insurers, including AOPA’s strategic partner Assured Partners Aerospace, may offer a discount on your club’s insurance premium. This is because WINGS participation signals a strong safety culture and a commitment to proficiency.
WINGS activities include online courses/webinars, flight training, and in-person safety seminars. Both Cade and I are FAAST team members and can host a safety seminar for your flying club. Be sure to reach out!
Planning Ahead for Insurance Renewal
Renewing your club’s insurance policy should be a thoughtful process, not a last-minute task. It’s a good idea to begin reviewing your coverage well before the expiration date. Take time to assess any changes in your club, such as new members, updated pilot qualifications, aircraft modifications, or incident history. Communicate these updates clearly to your broker or underwriter. Planning ahead helps avoid surprises, gives you time to explore other options if needed, and can lead to better rates and coverage that reflects your club’s current operations.
Final Thoughts: Building a Safer, Stronger Club Through Smarter Insurance Choices
Flying club insurance doesn’t have to be a mystery or a financial burden. By understanding the key factors that influence premiums, choosing the right partners, and fostering a proactive safety culture, your club can not only stay insurable but thrive. Whether you're reviewing your renewal, considering instruction, or simply trying to make sense of your quote, asking the right questions is the first step. Insurance is more than a line item; it's a reflection of how your club operates, communicates, and prioritizes safety.
