AOPA Pilot Magazine - July 2013 - 100
NEWS & NOTES
AOPA Pilot Protection Services guards both your pilot and medical
certificates to protect your freedom to fly (www.aopa.org/pps).
Aircraft title: What could possibly go wrong?
BY RON GOLDEN, AOPA PILOT PROTECTION SERVICES
THOSE WHO ARE CONSIDERING buying or
selling an aircraft should be careful in all
aspects of the transaction, including having
a title search. It’s easy to become complacent or to be tempted to take a shortcut to
save time and money. Although it’s often
not a problem, once in a while the title
search comes back to bite us.
Consider this experience: The pilot purchased his first aircraft when it was less than
a year old, had been used as a demonstrator
for 50 hours, and was owned by an aircraft
dealership. He paid cash for the aircraft.
Since he paid cash, no bank required a title
search, and he did not request one. After all,
it was a nearly brand-new airplane with no
prior owners and purchased directly from
the dealer. What could possibly go wrong?
The pilot had owned the aircraft for
nearly 14 years when he decided to sell
it so he could buy another aircraft. The
prospective purchaser asked that he
request a title search on the aircraft. The
seller gladly complied. He certainly did not
expect to find a problem.
The title search showed a dealer financing lien that a bank had recorded with the
FAA before the pilot purchased the aircraft. Not only was it very embarrassing,
but getting the lien released was not so
simple. The bank had gone out of business
and its assets had been acquired by another
bank. Eventually, the lien was cleared, but
not before the title company made several comments about how much simpler it
would have been if the pilot had done a title
search before purchasing the aircraft. Even
worse, it held up the sale for several months.
So remember, always get a title search
when buying an aircraft. Make sure the seller
actually owns clear title to it. Once you buy it,
the aircraft’s problems become your problems.
Fortunately, AOPA Legal Services
Plan/Pilot Protection Services can
help. Included in the plan is consultation on the sale and purchase of
aircraft. The staff can help you find
a legal services plan panel attorney
in your state to assist you with the
transaction. In addition, AOPA has a
strategic partner who can also help:
Aero-Space Reports is a one-stop shop
for aircraft title search, title insurance, escrow, or other related services
you might need. The experienced and
dedicated staff is an excellent resource
for advice as well as all your aircraft
Ron Golden is an attorney with 30 years
of legal experience and is legal counsel to
AOPA. He has been a pilot since 1975 and
owns a Cessna Cardinal RG.
Obtaining quotes to insure
A TRICK OF THE TRADE is that when
requesting quotes, never rely solely on the
application to present your information. A
follow-up phone call with the insurance broker is the best method for getting the best
coverage, particularly if you’re a new pilot,
insuring a new type of airplane, or plan on
flying to new places. You want to discuss:
• Who are the pilots who will be flying the
aircraft, even if they’re not going to start flying until later into the policy year? This is
important so you don’t choose an insurer
that won’t cover the additional pilot downstream (such as a student or transitional
100 | AOPA PILOT July 2013
BY BRENDA J. JENNINGS
Senior Vice President, AOPA Insurance Agency
• Is your use of the aircraft going to change
beyond your own personal use? Rental or
instruction? Aerial photo work?
• Are you planning a trip down to Argentina
or up to Greenland this year? Make sure you
mention these details so you avoid insurance surprises later on.
• Will you be refinancing this year?
Lienholder coverage can vary slightly
between carriers, so learn the potential
impact on you.
• Are you adding an aircraft or replacing
your current one with something different?
• When requesting your hull coverage, be
sure you consider the amount of your lien,
if applicable. Sometimes this is the key factor in your hull value decision.
• While liability limits are typically left up
to the discretion of the aircraft owner, if you
have a hangar lease or other contractual
requirement, you need to consider those in
addition to your own personal needs.
• If you’ll ever rent your aircraft, another
contract to review is the rental agreement.
Understand what you’ve agreed to with the
FBO and how your insurance policy may or
may not protect you.
Brenda J. Jennings is an aviation insurance
professional with 35 years of experience.