Page 16 - Volume 15 Number 9

INSURANCE
Mechanical Breakdown Aby Kyle White
n insurance policy should provide peace of mind when putting capital at risk. However, when operating your King Air, you should be aware there are some perils that may not be covered, thus, giving you a false sense of security. A well-constructed aircraft hull and liability policy can, and should, provide a broad array of coverages to protect you. This includes “buying back” some of the standard exclusions
found in aircraft policies covering turbine aircraft. Adding “Mechanical Breakdown” or another version of a limited write back endorsement, may be something you want to consider.
Within your policy, under the exclusions section you will find multiple paragraphs on what is not covered. To some extent, the following two policy exclusions can be added back:
Under all Section Three – Physical Damage Coverage, to any loss, damage, claim or expense:
- Which is due and confined to wear and tear, rust, corrosion, deterioration, freezing, mechanical or electrical breakdown of the insured property, its equipment, components or accessories, or to tires, unless the damage is caused by fire, malicious mischief, vandalism or theft or unless the loss or damage is the direct result of other Physical Damage, including Ingestion, covered by this policy. Damage resulting from the breakdown, failure or malfunction of an engine component, accessory or part (as noted on the manufacturer’s parts list for the engine or accessory) is considered “mechanical breakdown” of the entire engine.
- To any of the Aircraft’s turbine engines (including its turbine powered auxiliary power units) caused by heat resulting from starting, attempted starting, operation or shutdown thereof.
Aircraft insurance policies have been around for over a century. Over time the content of the insurance contract has expanded dramatically to be more explicit in what
they intend to cover, varying from just a few pages to as many as 80. We’ve all heard the popular television commercial stating, “we know a thing or two, because we’ve seen a thing or two,” (trademarked by Farmers Insurance Exchange). This is an accurate summation of how the aviation insurance industry feels. Policies have evolved so carriers can manage their claim exposure, using actuarial data to assess their risk. The carrier must have objectivity when determining what is considered a covered claim, as they move forward with you, the King Air owner, to make the aircraft airworthy again.
The King Air family of aircraft has been around for over 50 years now. When insuring a new King Air, the exposure to exclusions outlined are minimal. Although when insuring a 1971 King Air, those exclusions may be very important. One exclusion not mentioned, but is listed in the policy, is the “Asbestos” exclusion. Even in a policy covering a new King Air this exclusion exists, but it exemplifies the extent the carriers go to in their efforts to manage exposure to potential claims.
Some scenarios that have come up over the years where these exclusions apply, resulting in denied coverage:
In my article “The Hard Market of Aviation Insurance,” published in the December 2020 issue of King Air magazine, I mentioned the hot start situation and a brief story of the “freezing exclusion” resulting in an
14 • KING AIR MAGAZINE
SEPTEMBER 2021