Did the lack of experience cause the loss? |
Holt Helicopters' pilot was using his craft to herd cattle. Unfortunately, the helicopter crashed. The damaged helicopter was insured with AIG but after the claim was presented and investigated, AIG denied coverage. AIG argued that at the time of the crash the pilot did not have the required hours of experience which breached the Pilot Warranty. Holt sued AIG for coverage arguing that the pilot's lack of experience was not the reason for the crash.
The district court agreed with Holt and AIG appealed.
Click here to see how the appellate court ruled.
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Underwriting pilots |
The most important part of any application for aircraft or aviation insurance is the pilot qualification statement. The ability and the health of the pilot are paramount. Ability of a pilot is more than general experience with aircraft; a pilot must have experience in the specific type of aircraft. As an example, a pilot experienced in operating a Cessna would not be considered an acceptable helicopter pilot until he or she had piloted a helicopter under the supervision of an experienced helicopter instructor.
Click here to review an analysis of generic pilot history application.
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Material misrepresentations |
The insurance company underwriter depends on the application submitted to make a decision on acceptability of risk. The insurance company adjusting a claim depends on the statements of the insured and others to make a decision on paying a claim. Trust is implicit and without trust, the insurance mechanism breaks down. Therefore, all policies contain a condition stating that misrepresentations will void coverage. This protection for the insurance company could be abusive to the policyholder if taken too far. Therefore, in order for a misrepresentation to void a policy, it must be considered material.
Click here to read the Misrepresentation Conditions contained in the Commercial Property Policy and the HO 00 03-Homeowners Policy.
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Uncovering aircraft exposures |
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Many individuals and businesses have aircraft exposures but not all of them have told their insurance agent. Do you think that any of your clients could have this exposure but you don't write it because you have never asked?
Click here for a Business Building Letter you could blog, email or mail to uncover that exposure.
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