Territorial Limitations - Aviation Insurance & Risk Management ...

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writers will sell this certifi cate to you at a premium that will just cover their cost. Others do not provide the service at all. Check with your agent if you are not sure about Mexican Liability coverage. Canada If you are planning a trip to Canada, your policy’s coverage territory should be examined a little more closely. Almost all of the underwriters give blanket territorial coverage for Canada. London Aviation Underwriters and AVEMCO do have some minor restrictions, so be sure to check your policy territory carefully if you are insured through either of those carriers. Alaska and Hawaii If you desire to travel further north to Alaska or west to Hawaii, you must not assume you have coverage just because these are a part of the United States. Some companies, including Phoenix Aviation Managers, W. Brown & Associates and USAIG, include Alaska and Hawaii in their basic policy forms while others offer coverage only if your insurance is written on their broadest policies or by specifi c endorsement. Caribbean One of the most confusing territorial extensions is the Caribbean. We are seeing reference to this extension more frequently now than ever before. Since this is a popular destination for many of our clients, we will discuss it in some detail. Prior to our current underwriting environment, many underwriters would freely extend their policy territory to include the Western Hemisphere. This territory expansion is very broad and, for most of general aviation, is far in excess of any desired destination. With the tightening of the market and in an attempt to curb underwriting losses, insurance companies are now underwriting much more conservatively and restricting coverage to the Caribbean. They want the opportunity to specifi cally review and underwrite any insured traveling outside the U.S., Canada, and Mexico. They usually (not always) include the Bahamas and the Caribbean if requested. (The Bahamas are often included in many companies’ basic policy forms.) 10 Aviation Insurance & Risk Management AIRCRAFT OWNERS The Caribbean - what is included? If traveling to the sunny Caribbean, the defi nition of policy coverage territory becomes confusing and poorly defi ned. Several underwriters extend coverage in the basic policy or through endorsement to include the “Caribbean” or “Islands of the Caribbean”. The problem with the wording of such a coverage territory is that the geographic defi nitions in most policies are vague or nonexistent. In common usage, “Caribbean” is used to refer to a large geographic area or culture. The Caribbean area can be construed to be any geographic entity bordering on the Caribbean Sea. Does this include only the islands, or are the coasts of Central and South America included as well? It is obvious that underwriters do not intend for the policy coverage territory to be so vague as to allow you to island hop your Baron all the way to Venezuela. By many textbook defi nitions, Venezuela and Colombia are in the Caribbean, although they are geographically part of South America. A policy that lists a coverage area as the “Islands of the Caribbean” is more defi ned. Obviously, the underwriter in this instance intends for the coverage territory to include only those islands that border on, or are in, the Caribbean Sea. This coverage territorial defi nition, if taken literally, would exclude the Bahamas, which are technically in the Atlantic Ocean. As a result, if not included in the basic policy, the Bahamas must be specifi cally included by endorsement. Many underwriters such as USAIG, AIG, and AVEMCO do include the Bahamas as a specifi c territory covered in their basic policy. (Please note that coverage for the Islands of the Caribbean must be added by endorsement for each of these companies.) Having said this, I must point out that coverage for the “Islands of the Caribbean” is still not specifi c enough. (I know I’m extremely picky). Technically, there are only a few islands, such as Jamaica and the Cayman Islands, totally surrounded by the Caribbean Sea. To state the territory of coverage as the “West Indies” is technically correct and more encompassing. I guess we are supposed to know what they mean. The West Indies Although seldom referred to as a territory, the West Indies would be a correct and very specifi c coverage defi nition. The West Indies are a 2,000-mile long group of islands that extend from the southern tip of Florida to the northern coast of Venezuela. Technically, they separate the Atlantic Ocean
AIRCRAFT OWNERS from the Caribbean Sea. Except for the Bahamas, the Cayman Islands, Jamaica and a few smaller islands, they have the Caribbean Sea on their west side and the Atlantic Ocean on their east side. The West Indies are further separated into the Greater and Lesser Antilles. The Greater Antilles consist of Cuba, Hispaniola (Haiti/Dominican Republic), Jamaica and Puerto Rico. The rest of the islands are considered the Lesser Antilles, from the Bahamas off the coast of Florida to Curacao north of Venezuela. The Lesser Antilles are further broken down into the Leeward and Windward Islands. AIG LAD (Light Aircraft Division) and USAIG are the only insurance carriers that specifi cally cover the “West Indies” in their basic policy forms. This is certainly more specifi c than just referencing the Caribbean. Some companies’ basic coverage includes the Bahamas Islands, but not the West Indies. USAIG’s basic coverage includes Puerto Rico since it is a Commonwealth of the United States. Phoenix Aviation’s basic policy territory extends to U.S. territories and possessions. Whether or not you can get a territorial expansion endorsement to the West Indies depends on the underwriter. U.S. Specialty (USSIC) endorses the Bahamas on their policy form 1590 and will include coverage for the West Indies on a caseby-case basis. Aerospace Insurance Managers and London Aviation Underwriters will extend coverage only to specifi c locations in the West Indies. The AVEMCO policy form excludes Bermuda, Central America and Cuba. Phoenix Aviation and W. Brown & Associates will endorse expanded coverage to the “Caribbean” and “Islands of the Caribbean”, respectively. Confused? If you are unclear as to the exact defi nition of the territory included in your policy, you should request confi rmation of coverage to specifi c locations, especially if traveling to the Caribbean. This will ensure that there are no questions regarding coverage under the broad defi nition of “Caribbean” or “Caribbean Islands”.
Page 1 and 2: volume 6 / winter 2006 - $3.95 Terr
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Page 6 and 7: To date, we have devoted Aviation I
Page 8 and 9: Thomas H. Chappell Tom Chappell is
Page 12 and 13: Central and South America or Wester
Page 14 and 15: Louis M. Meiners, Jr. Louis M. Mein
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