Page 11 - Volume 11 Number 7

and back in the air so they don’t have to write a check for the over-inflated value. They realize the insurance company will not be able to recoup enough money due to the low salvage value. This can be a very emotional and frustrating situation. When significant damage occurs to our aircraft, we begin to have reservations about its structural integrity. We question if we really want to put ourselves, family, employees, or guests in the aircraft. We also want confidence that any performed repairs were done by a reputable shop, thus ensuring quality work and detailed inspections, to be sure we have a safe aircraft.
When your aircraft does suffer damage, speak up. Do some research and provide input and guidance of a couple of different shops you trust to do the repair work. The adjuster works with many shops around the country on a daily basis and will make some recommendations, but at the end of the day, your opinion and desires matter.
What if you find yourself in the situation of having your severely damaged King Air repaired? What challenges and options do you face? For starters, you may not want the airplane back for the reasons discussed earlier. You also have the hassle of waiting for the repairs to be complete. Extra expense coverage can help mitigate the cost of chartering or leasing a substitute aircraft, but when you finally get the airplane back, what are the next steps?
First off, keep the end result in mind. This reverts back to making sure the right shop does the repair work. Work with a professional that understands the King Air market and knows what buyers are looking for in terms of maintenance and repair, which leads us down the road of diminution of value. We all get email solicitations sent to us. Last week I saw one titled, “Wanted: Clean King Air 250.” This means they have a buyer looking for a King Air 250 without any damage history and a well-documented maintenance history. This leads us to believe a “dirty” King Air 250 is in less demand, resulting in being less valued. How do we recoup our loss of value, or “diminution” of value? Aircraft policies do not typically provide coverage for diminution of value because it is extremely difficult to adjust and agree to what the amount should be. However, we can all agree there is diminution of value. If our aircraft policy won’t pay, who will?
The next step is the hangar lease agreement. General Liability policies could be the source to recoup the loss of value. I’m not an attorney, but I’ve seen them in action. They review the hangar lease agreement and look for negligence on behalf of the lessor of the hangar, and potentially, the builder, engineer, or material provider as it relates to the hangar construction, maintenance, and operation. If the aircraft is in the “care, custody, and control” of the FBO, that is also a factor of consideration. Some hangar lessors and FBOs are requiring the aircraft owner to provide evidence of insurance coverage. This
JULY 2017
is a reasonable request. Conversely, you should ask and they should reciprocate providing you evidence of coverage as well. You want to make sure that they have enough “Hangarkeepers” coverage to step up to the plate in the event they are negligent and need to repair your aircraft or provide a settlement for diminution of value. Far too often I’ve seen FBOs carry a very low limit of Hangarkeepers coverage, or none at all!
Before the next storm threatens your airport, be sure you’ve reviewed your aircraft policy with your insurance broker to be certain the right ancillary coverages are in place, and the hull value is an accurate representation of what it would cost to replace your aircraft with “like, kind, and quality.” Have your insurance broker and attorney review the hangar lease agreement, along with the hangar lessor’s certificate of insurance, to be certain there is adequate Hangarkeepers coverage to appease your loss. These steps will help ensure an efficient claims process and favorable outcome in the event the “+FC” (well-developed funnel cloud, tornado or waterspout) is reported on your local METAR. KA
Kyle P. White is the CEO of Aviation Solutions,
a Marsh & McLennan Agency company, an insurance brokerage and risk management company, and a former professional King Air pilot holding an ATP and MEII license. He can be reached by e-mail at Kyle. white@marshmma.com.
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KING AIR MAGAZINE • 9