3. INVESTIGACIÓN DE MERCADO
3.3.3. Instrumentos de recolección de información
Aviation insurance normally covers physical damage to the aircraft and legal liability arising out of its ownership and operation. Specific policies are also available to cover the legal liability of airport owners arising out of the operation of hangars or from the sale of various aviation products. These latter policies are similar to other types
of liability contracts. Aviation insurance is divided into several types of insurance coverage available.
Public Liability Insurance
This coverage, often referred to as third party liability covers aircraft owners for damage that their aircraft does to third party property, such as houses, cars, crops, airport facilities and other aircraft struck in a collision. It does not provide coverage for damage to the insured aircraft itself or coverage for passengers injured on the insured aircraft. After an accident an insurance company will compensate victims for their losses, but if a settlement cannot be reached then the case is usually taken to court to decide liability and the amount of damages. Public liability insurance is mandatory in most countries and is usually purchased in specified total amounts per incident, such as INR 50,000,000 or INR 250,000,000.
Passenger Liability Insurance
Passenger liability protects passengers riding in the accident aircraft who are injured or killed. In many countries this coverage is mandatory only for commercial or large aircraft. Coverage is often sold on a “per-seat” basis, with a specified limit for each passenger seat.
Combined Single Limit (CSL)
CSL coverage combines public liability and passenger liability coverage into a single coverage with a single overall limit per accident. This type of coverage provides more flexibility in paying claims for liability, especially if passengers are injured, but little damage is done to third party property on the ground. Combined Single Limit Liability cover for a total amount covering carrier’s entire liability which includes:
• General Legal Liability • Third Party Legal Liability • Passenger Legal Liability • Registered Baggage or
• Unregistered Baggage in the charge of the passenger • Cargo Legal Liability
• Mail Legal Liability
These liabilities result from the operations the operator is set up to perform and are normally are the subject of a contract of carriage like a ticket or airway bill.
Ground Risk Hull Insurance not in Motion
This provides coverage for the insured aircraft against damage when it is on the ground and not in motion. This would provide protection for the aircraft for such events as fire, theft, vandalism, flood, mudslides, animal damage, wind or hailstorms, hangar collapse or for uninsured vehicles or aircraft striking the aircraft. The amount of coverage may be a blue book value or an agreed value that was set when the policy
was purchased.
The use of the insurance term “hull” to refer to the insured aircraft belies the origins of aviation insurance in marine insurance. Most hull insurance includes a deductible to discourage small or nuisance claims.
KEYWORDS
Aviation Insurance:It is insurance coverage geared specifically to the operation of aircraft and the risks involved in aviation.KEYWORDS
Hu ll All Risk s:It policy usually pertains to chances of physical loss or damage to the aircraft.
Ground Risk Hull Insurance in Motion (Taxiing)
This coverage is similar to ground risk hull insurance not in motion, but provides coverage while the aircraft is taxiing, but not while taking off or landing. Normally coverage ceases at the start of the take-off roll and is in force only once the aircraft has completed its subsequent landing. Due to disputes between aircraft owners and insurance companies about whether the accident aircraft was in fact taxiing or attempting to take-off this coverage has been discontinued by many insurance companies.
In-Flight Insurance
In-flight coverage protects an insured aircraft against damage during all phases of flight and ground operation, including while parked or stored. Naturally it is more expensive than non-in-motion coverage since most aircraft are damaged while in motion.
Hull “ALL Risks”
The hull “All Risks” policy usually pertains to chances of physical loss or damage to the aircraft. These policies are subjected to a standard level of deductible (uninsured amount borne by the Insured) applicable in case of partial loss. This deductible presently ranges from INR 2500,000 to INR 50,000,000. The term “all risks” can be misguiding and it should be cleared that the term is not subjected to any kind of consequential loss, or loss of use and delay. The term addresses to the restoration of the aircraft to its previous condition before the loss. Presently the bulk of airline hull “all risks” policies are formed on the basis of agreement between the insurers and the insured covering the policy period, the value of the aircraft and in any case of total loss the agreed value should be payable in full. There is no option for replacement under such an agreement.
Hull/Spares War Risk Insurance
The hull “All Risks” policy will contain the exclusion of “War and Allied Perils”. Generally speaking, throughout the aviation insurance world, “War and Allied Perils” have a defined meaning. In the London Aviation Insurance Market the standard exclusion is called the War, Hi-jacking and Other Perils Exclusion Clause this lists and defines these so-called war and allied perils.
• War - this includes civil war and war where there is no formal declaration. • The detonation of a weapon of war employing nuclear ssion or fusion. • Strikes, riots, civil commotions and labor disturbances.
• Political or terrorist acts. • Malicious or sabotage acts.
• Conscation, nationalization, requisition and the like by any government. • Hi-jacking or any unlawful seizure or exercise of control of the aircraft or crew
in ight.
The exclusion also applies to any loss or damage occurring whilst the aircraft is outside the control of the operator by reason of any of these “war” perils. The majority of the excluded “War and Allied Perils”, other than the detonation of a nuclear weapon and a war between the Great Powers can normally be covered
by way of a separate “War and Allied Perils” policy. Aircraft deductibles are not normally applied in respect of losses arising out of “War and Allied Perils”.
Liability Insurance
Liability is basically categorized in two aspects. With regard to passengers, it is limited to baggage and cargoes carried on the aircraft. The second aspect is Aircraft Third Party Liability, which is the liability for any sort of property damage or to the people outside the aircraft. This is similar to the third party insurance that is required under the Indian Motor Vehicles Act, 1989.
Hull Total Loss Only Cover
Hull total loss only cover is subjected solely to total loss of the aircraft and is particularly formed for the old aircrafts as the condition of such are very poor and are insured for low amount the premium of which would also be very low. The proportion of partial losses to total losses in case of such aircraft is very inadequate. 8.2.1 Exceptions under Aviation Insurance Policies
There are a number of exceptions which apply under an aviation insurance policy. Following is a list of some of the common exceptions. It must, however, be noted that such exceptions vary from policy to policy, and that the following list is only illustrative and not exhaustive.
• Wear, tear and gradual deterioration, ingestion damage caused by stones, grit, dust, ice etc. which result in progressive engine deterioration (Considered wear and tear), Mechanical Breakdown. War and Allied Perils are also excluded from the standard policy. These can be, and indeed are insured by way of a separate policy.
• Claims arising whilst the aircraft is being used for any illegal purpose.
• Claims arising whilst the aircraft is outside the agreed geographical limits (unless due to force majeure.)
• Claims which are payable under any other insurance.
• The hull “All Risks” policy will pertain to the exclusion of war damages. War here means any kind if civil war, strikes, riots, disturbances, conscations, hi- jacking or any kind of political or terrorist attacks.
• Noise and pollution unless resulted from crash, re or any kind of explosions registered inside the air plane,
8.2.2 Analysis of the Global Aviation Insurance Market in 2009-2010
Value of claims, global Jnauary-July 1995-2010 1,750 1,500 1,250 1,000 750 500 250 0 1995 1998 2001 2004 2007 2010 Average, 1995-2009 V a l u e o f c l a i m s
Figure 8.1: Value claims global.
At the beginning of the year 2009, the aviation and airline industry itself was in disarray, and the depression seemed to be the harbinger of death for the aviation insurance industry. For, without airlines, what would be left to be insured? However, a recent market study has shown that this has not been the case. In terms of airlines ceasing operation, overall the industry appears to have weathered the economic storm relatively well so far, despite the many augurs of doom being delivered 3 years ago. According to the data that was studied from the insurance markets, just over INR 800 million has come out of the lead hull and liability premium total so far this year as a result of airlines going out of business, joining group programmes or seeing their AFV drop below INR 7500 million, the criteria for inclusion in the data set.
The majority of lost premium, INR 40 million, comes from four airlines that have gone out of business, although a further INR 350 million has been the result of four other airlines going into group programmes. The growth of group programmes is perhaps unsurprising given that the airline insurance market tends to reward economies of scale. At the same time, around INR 450 million has come into the sector as a result of ve new airlines joining the data set.
Four of these are the result of AFV growth while the fth is a new airline. The INR 350 million differences between airlines leaving and joining the industry so far this year is something of a turnaround on the full year data from 2009, when INR 2050 million of lead hull and liability premium left the industry and INR 4550 million joined. The high number of airlines joining the sector in 2009, 26, was the result of eet growth but also restructuring and airlines taking their insurance policies out of group programmes. There are still a number of airlines that could be described as being distressed, however. If the economic downturn is protracted as some experts are suggesting, it could well be that there will be further airlines leaving the industry.