Insurance during Construction

[birddog486]

I took the safe route also going with an under construction policy through Falcon insurance. For the $250 per year fee it's a piece of mind thing.

If theres a fire or theft I know there wont be any issues and I'm covered. My homeowners policy also has a blanket section that says it covers contents but the small print in the exclusions for the policy state that aircraft are not covered. I had to specifically ask for a copy of the exclusions on my policy.

If you look at the Bill of sale for your kit I'm guessing it reads the same as mine calling it an airplane. Good luck trying to get a home owners policy to pay for that.

[n85ae]

On the other hand if you have $50K in personal property in your house, a $20K
kit, and it burns to the ground. If your insurance pays a blanket $250K plus
the replacement of the house ... Then you're in good shape.

On the other hand getting it smacked on a trailer is definitely a reason to have
builders insurance.

Regards,
Jeff

[Flienlow]

What does construction insurance usually cost?

What about after the plane is built? What do people usually have to pay to insurance their homebuilt plane?

[jtpitkin06]

Guys and Gals,
There are some things that need clearing up here. This is the voice of experience having suffered a fire in my garage back in 1980. My car, tools and equipment were destroyed along with much of the house. Now, I know that all policies are not the same, but I do know that they are more similar than different. They are written to exclude instead of include.

That “blanket” policy is not a blank check. If your policy says contents up to $100K and you have a loss of a box of oranges in your shop you do not get a check for $100K. In fact, the adjuster will dig through the ashes to confirm you actually had a box of oranges in the shop before they pay out a dime. After my 1980 fire I had to go through with a camera and show pictures of every tool, ladder and lawn mover that burned or melted.

If you say your airplane is “personal goods” the adjuster will look at the burned pile and give you about $100 for “steel tubing/jungle gym.” You’ll need to prove what it was worth and a lot of that value is because it is an airplane. That is why you need to save receipts in a location not in the shop.

So, if you believe the insurance agent that your airplane is covered under your home policy, then ask him or her for the phone number of the underwriter. Confirm with the underwriter that your airplane is covered. Then get a letter with that interpretation IN WRITING. If they won’t give you a letter, then you are not covered. Don’t avoid the word airplane. When it goes to court it will come out that your pile of bent tubing and melted plastic was an airplane and that’s when things get sticky. It is better to list up front the word “airplane” right on the policy.

Now, if your financial condition is such that you can walk away from a $35K pile of ashes, then don’t bother insuring it. That amount of loss would sting me a bit so I insured my airplane for construction. The $250 annual premium is just part of the construction cost and I sleep really well.

John Pitkin
Greenville, TX

[DesertFox4]

Thanks John. As an ex-insurance agent your experience is spot on. No household insurance policy I've ever sold or read would cover an aircraft weather it is in parts or complete or airworthy or not.

You are also correct that you will have to prove your losses when settlement time comes. No insurance company will issue a large check until the claims adjuster or adjusters have investigated. Having an up to date household inventory list with photos and serial numbers helps tremendously and of course you want to keep a copy either in a fireproof safe or keep a copy off site.

Just an FYI- all homeowners policies have specific dollar limits on certain items. These include, but are not limited to: jewelry, firearms, musical instruments, furs, any collectables or sets of collectibles, art work and if I remember correctly tools/equipment used for earning a living.