Aviation Insurance — A Practical Guide for Pilots and Operators

Aviation insurance in Australia operates through a specialist market with relatively few underwriters. Understanding how policies are structured — and what influences the terms and premiums available — is useful for anyone operating or considering insuring an aircraft.

Types of aviation insurance

Hull insurance

Hull insurance covers physical loss or damage to the aircraft itself. Most hull policies offer two options:

• All risks (ground and flight) — covers the aircraft whether it’s flying, taxiing, or on the ground. This is the broadest option and the most commonly arranged for actively flown aircraft.
• Ground risk only (not in motion / in motion) — covers the aircraft only when it’s on the ground. Some operators with aircraft in storage or undergoing maintenance arrange ground-only cover while the aircraft isn’t being flown.

Hull policies are typically written on an agreed value basis — the insured value is agreed at the start of the policy, and that’s what’s paid in the event of a total loss, without depreciation deducted. This is worth confirming when arranging cover, as some policies are written on a market value basis instead.

Liability insurance

Aviation liability covers your legal liability to third parties for bodily injury or property damage arising from the operation of the aircraft. There are two main components:

• Passenger liability — covers liability for injury or death to passengers carried in the aircraft
• Third-party liability — covers liability for injury or damage to people or property on the ground or in other aircraft

Liability limits in aviation are typically expressed as a combined single limit (CSL) — a single aggregate that can be applied to any combination of passenger and third-party claims arising from a single accident.

Hangarkeepers liability

For operators who store or service other people’s aircraft — whether as an FBO, maintenance facility, flying school or aero club with hangar facilities — hangarkeepers liability covers damage to aircraft in your care, custody or control. This is separate from your own hull cover and is often overlooked by operators who assume their general liability policy extends to this exposure.

What influences aviation insurance terms

Aviation underwriters consider several factors when assessing risk:

• Pilot qualifications and experience — total flying hours, hours on type, and currency of ratings all affect the terms available. Low-hour pilots or those transitioning to a new aircraft type may face higher premiums or specific conditions.
• Aircraft type and age — some aircraft types attract broader coverage and more competitive pricing than others. Older or complex aircraft may have limited market availability.
• Operations — private recreational flying is treated differently from charter, flight training, aerial work or agricultural operations. The use of the aircraft must be accurately declared.
• Geographic operating area — operations in remote areas, overseas, or into countries with limited support infrastructure may affect terms.
• Claims history — prior incidents, even if not the insured’s fault, are relevant to underwriters.

Aero clubs and group operations

Aero clubs and flying groups have specific insurance needs that differ from individual aircraft owners. Key considerations include:

• Club liability — covering the club’s liability as an organisation, including events, fly-ins and ground operations
• Member pilot qualifications — clubs typically need to specify what pilot qualifications and minimums are required to fly club aircraft, and insurers will expect these minimums to be maintained
• Aircraft used by multiple pilots — multi-pilot operations require the policy to cover all approved pilots, not just a named individual
• Ground equipment and facilities — hangars, fuel bowsers, maintenance equipment and clubhouse contents are typically covered separately from the aircraft themselves

Regulatory requirements

CASA requires operators to hold certain minimum levels of insurance depending on the type of operation. For aircraft with a maximum takeoff weight above certain thresholds, or for RPT operations, specific minimum liability limits apply. These are minimums only — the appropriate level of cover for your operations may be substantially higher.

If you operate in controlled airspace or at regulated airports, you may also face liability limit requirements from the airport operator or airways authority as a condition of access.

Common gaps to check

• Is the hull insured on agreed value rather than market value?
• Does the liability limit meet any contractual requirements from airports or operators you work with?
• If you allow other pilots to fly your aircraft, are they covered under the policy?
• If you operate a hangar or store other people’s aircraft, do you have hangarkeepers liability?
• Is your declared use accurate — particularly if you’ve changed how you use the aircraft since the policy was arranged?

If you’d like to arrange or review aviation insurance, contact WebInsure. We work with specialist aviation underwriters and can help you find cover suited to your aircraft, operations and pilot qualifications.

This post provides general information only and does not constitute personal advice. Cover availability, terms, exclusions and premiums vary by insurer, product and individual circumstance. Always review the Product Disclosure Statement and confirm suitability before making a decision.

WebInsure Pty Ltd ABN 32 054 247 666 is an Authorised Representative 000271148 of Community Broker Network Pty Ltd ABN 60 096 916 184 AFSL 233750.