Oct. 16, 2018
Checking with an aviation insurance broker to make sure that you have appropriate coverage can prevent issues in foreign countries.
When it comes to international aviation insurance, the details are critical. A minor flaw in the paperwork can delay or deny your landing permit or even detain the aircraft, passengers and crew.
Although an insurance policy with worldwide coverage is adequate in most regions, there are plenty of exceptions, and the best way to avoid potential snags is to work closely with an international handler, advises Joseph Braunstein, managing director, general aviation practice, Marsh USA Inc., a leading global insurance broker.
“Handlers ensure the documents are legal and comply with current requirements,” said Braunstein. “For instance, Turkey requires blue-ink original certificates in advance of the trip.”
Germany and Italy are other examples. While these nations are members of the European Union, they require a specific certificate format and don’t accept the general EU insurance certificate. In fact, Australia, Brazil, Colombia, Costa Rica, Guam, Hong Kong, Jamaica, Switzerland, Turkey, UAE and Venezuela require special forms, specific language or both. Mexico even requires policies in Spanish issued through a Mexican domiciled insurance company.
International insurance requirements are based on aircraft weight. The heavier the aircraft, the higher the required liability coverage. Some countries require minimum coverage valued in their currencies. More commonly, monetary coverage is stated in Special Drawing Rights, a blend of five currencies.
Aircraft flying into areas in turmoil, such as Afghanistan, may be uninsurable by mainstream companies. “The London markets, such as Lloyd’s of London, may be the only alternative, and they’re prohibitively expensive,” Braunstein said.
Braunstein advises operators check with an international handler for current insurance requirements before traveling. “Then check with an aviation insurance broker to ensure you have the appropriate coverage limits and certificates.”
International aviation insurance requirements are constantly changing, said Eric Barfield, managing director of Hope Aviation, a broker based in Columbia, SC. “It’s very fluid.”
Barfield recommends having coverage even for fly-over countries or countries along a route, allowing more options for alternates or emergency landings. However, maintaining coverage means keeping your underwriter informed. If you have coverage in Europe, but fly to Ukraine without telling your broker, that could be considered material misrepresentation.
Coverage can also be denied for doing business with a sanctioned individual, group or nation. The sanctioned list includes dozens of nations and more than 5,000 entities that are considered threats by the U.S. Treasury’s Office of Foreign Assets Control.
“If you have a claim in one of these nations, the insurance company may not be legally able to pay,” Barfield warned.
When shopping for international coverage, inquire about a company’s capabilities, Barfield urges. “Do they have international claims attorneys and adjusters with experience in countries where you fly?”