In aviation insurance, there always seems to be confusion concerning what the FAA permits regarding aircraft operations and what the insurance requirements dictate via the policy conditions.
FARs and insurance requirements are always two entirely separate paths of compliance, and both must be adhered to. If you expect to have insurance coverage in the event of a loss, you need to be compliant specifically with your policy conditions and warranties. Conversely, you might be in violation of an FAR and suffer a loss but still have insurance coverage if you haven’t breached a policy condition.
A great example of this is found in the pilot warranty section of a policy—specifically turbine policies.
Almost all insurance policies for turbine aircraft require formal recurrent training every 12 months, while FARs do not mandate any formal 12-month, recurrent training is required for aircraft under 12,500lbs other than being BFR-current, 90-day landing-current, and IFR-current if flying IFR.
Virtually all light turboprops require formal recurrent training each year at a provider approved by the insurance carrier. So if you don’t adhere to the policy training requirements, thinking you are still compliant with FARs (which you very well might be), you will likely have no coverage should you suffer a loss during the policy period.
One of the first things an insurance adjuster will do after a loss occurs and a claim is filed is request copies of pilot forms/logbooks, training completion certificates, as well as medical and pilot’s license documents. While insurers generally do try to ‘find coverage’, if you haven't completed your current training in the policy-required 12-month period or did not complete an IPC as potentially required by some piston policies, you may find yourself without coverage, with the insurer citing that you breached the policy training requirement.
Piston policies in today’s market for higher-value pistons (think Cirrus) might also have an annual IPC requirement—even if you are compliant with the requisite 6-6-6-3 IFR currency FARs.
One thing you will always want to do when you place a new insurance policy is review the insurance proposal or binder with your insurance broker to make certain you understand any training requirements that the insurer specifically defines in the pilot warranty section.
The details could mean the difference between a covered loss and a claim denial.