Is Sport Pilot Training Uninsurable for Commercial Flight Schools?

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As the details emerge of just how the Sport Pilot rules will work in the ''real world,'' one major block has turned up: Insurance companies may not be willing to underwrite it. AVweb presents a guest opinion piece from a frustrated Sport Pilot flight school.

ATIS

General Aviation has seen an interesting and uncommon change recently: A new certificate is now available. Sport Pilot has been much-awaited, touted, and striven-for by many dedicated individuals and organizations whose goal was to help broaden the appeal of GA.

Sport Pilot offers a new group of people the ability to participate in, help support, and ultimately grow an industry that traditionally was limited in its potential customer base. Along with this new potential will come training and licensing of a large group of pilots who formerly fell into categories such as ultralight aircraft, powered parachutes, or a variety of others that the Sport Pilot ruling now has authority over. GA has the potential to now grow in a new way and provide a needed service to a market that was not in existence a few short years ago. We have already seen companies developing and providing new products for this rating. Training materials, videos, new examiner certifications, and even aircraft types are just a few of the new services and products that have been or are being developed. A new growth pattern has developed within the industry to serve the needs of this certification that is slowly becoming more available.

However, there is a critical limiting factor that prevents flight schools from providing this training: Currently, insurance to provide Sport Pilot training required by these pilots in conventional aircraft is unattainable.

First Find A Plane

As an owner of a flight school with an established history, a current customer base, and a moderate-sized fleet of aircraft, I intended to purchase an appropriately configured aircraft to offer Sport Pilot training to interested customers. This was intended to complement the flight training we already offer so that we can truly offer all types of training for our customers.

As I worked to choose an aircraft for my flight school, I found that most of the certified aircraft that could apply for use under Sport Pilot regulations are older aircraft. These include a variety of Taylorcraft, Lucsombe, Aeronca, Piper, and a few other aircraft. These aircraft ranged from the approximate vintages of 1930 through 1960. Most were of fabric wing construction, and all were two-seat aircraft as required by the Sport Pilot rule.

After taking some time to choose an aircraft with consideration of multiple characteristics, I decided an Aeronca Champ would be an appropriate aircraft in which to provide this training.

I chose the Aeronca Champ for a number of reasons. It is a stable training aircraft that meets Sport Pilot requirements, which include but are not limited to aircraft seating, speed, and weight. The Champ is a tailwheel aircraft, as are many of the production-category aircraft that currently qualify under the Sport Pilot regulation. This aircraft is further useful for my flight school in that it is not only a great training aircraft for Sport Pilot but we can offer tailwheel training for endorsements for currently certified pilots. This dual utility makes the aircraft a sound business choice. Further, from the standpoint of a flight school, to use the aircraft in a commercial capacity -- which flight training and aircraft rental certainly are -- it must be a certified aircraft. This requirement limits the aircraft choices to production-class aircraft, unlike those available to individuals who can purchase their own aircraft that can fall into the experimental category. A true classic aircraft, the Champ is stick-controlled, tandem-seated, and wonderful to fly.

Our customers were interested and excited when the Champ arrived, and I was excited to be able to offer it to them. Tailwheel training is becoming far too scarce, and it is a pleasure to be able to offer this type of training and teach the art of tailwheel flight to a new generation of pilots.

Insurance Stumbling Block

While the FAA has offered the certification for training and is currently training Sport Pilot examiners, with the first few batches already completed, the insurance industry is offering up a major stumbling block to anyone who wants to provide this type of training.

As I attempt to offer this type of training, there can be no doubt that I, as will most flight schools, desire to have appropriate liability and hull insurance on the aircraft, instructors, and clients who will be using the Champ. This is logically necessary to protect the customers who will fly the aircraft, the aircraft itself as an asset, and the business from any potential liability that could arise. Unfortunately, this is where the roadblock begins.

The insurance underwriters we consulted brought forward a variety of reasons that they "simply could not insure this type of operation." I would like to say that this just applied to the Sport Pilot certification training, but in the first stages of negotiation it also applied to the aircraft itself for any type of training. One main reason included the aircraft age: The Champ was built in 1946.

After many weeks of discussion, we came to the compromise that the aircraft could only be used for dual instruction for the first six months. Any instructor would have to have at least 50 hours in type and 100 hours of tailwheel experience (a significant decrease from an initial, unrealistic request of 500 hours in type and 1000 hours of tailwheel experience!) This truly limits the ability of this aircraft be fully utilized in the first six months of operation, but at least it offers us the ability to transition the Champ into operation and eventually offer it for full use to our customers who are certified pilots. However, our flight school and others will have a hard time finding an adequately qualified instructor-pilot with this amount of time in not only tailwheel aircraft, but in type as well. Those who do have this amount of experience are typically unwilling to work as a flight instructor anymore or for flight instructor wages.

While the limited potential to offer tailwheel training is available, Sport Pilot training is presently out of the question. My insurance agent, who worked diligently and feverishly as I pursued this possibility, indicated that this negotiation process hinged upon the point that I would not even bring up the question of offering Sport Pilot certification in the aircraft.

The Medical Issue

Presently, any underwriter who has been asked about coverage for Sport Pilot certification training has simply said that they are not covering this type of training yet. The cost of doing so has never even been an issue in this discussion: I am willing to pay an appropriate premium to be able to offer this training, but even the motivation of a high premium hasn't been enough to secure underwriting for Sport Pilot training operations. I have even tried to get underwriters to offer only liability, and not cover hull damage to the aircraft as an option; a risk I am willing to take. This has also been unsuccessful. Their reasoning is largely based on a fear of the "non-medically approved pilot." Many underwriters have indicated that they will need to see someone else cover it first before their companies will do so; but if everyone needs to see someone else cover it first, then no one will end up covering this type of training until the industry provides sufficient motivation to the underwriting companies to do so.

The hurdle is simple, but poignant: Until flight schools are able to secure appropriate insurance coverage to provide this type of training or are willing to risk going uninsured, Sport Pilot training will require individual pilots to purchase their own aircraft. This significantly increases the investment required by potential Sport Pilot candidates, and thus decreases the pool of individuals who will be attracted and have the ability to participate in this new avenue of general aviation.

It is now up to us as General Aviation service providers to help educate insurance underwriters about this new certification. We must show them that we can provide services and training for this market in a manner that is of equal or less risk compared to other sections of the aviation industry. To do so, we must first convince them to take a chance and sample the potential that is in front of them for new premiums that are safe and secure investments from an insurance viewpoint. Until this is realized, my flight school and others will have to settle with just offering tailwheel training and wait until the point in the future when insurance underwriting will allow Sport Pilot training operations on a commercial level to be realized. We hope that the industry will find a way for us to provide the needed training with insurance for this market so we do not have to exclude a large group of potential pilots and limit their abilities to participate in general aviation. Without the ability to insure our operations, the Sport Pilot certification that has been so diligently worked for will not be able to fully realize its potential effect on the growth of the aviation industry.


Editor's Note: An independent insurance agency clarified some of the information about getting Sport Pilot insurance in an article here.


Want to read more editorial and op-ed pieces from AVweb staff members and guest commentators? Check out the rest of our ATIS features.