The short answer
If the aircraft is financed, hull coverage is required to protect the lender's collateral. If you own it outright, hull coverage is optional — the decision comes down to whether the aircraft's hull value is worth insuring against the annual premium. Liability coverage, however, is always wise.
Financed vs. Owned Outright
A lender requires hull coverage on a financed aircraft because the airplane is its collateral — you won't have a choice while the loan is outstanding. Once you own the aircraft free and clear, hull coverage becomes optional, and some owners of low-value older airplanes drop it to save premium, keeping liability coverage only.
Weighing the Decision
The question is whether the aircraft's hull value justifies the premium. For a modest older airplane where the annual hull premium is a meaningful fraction of the aircraft's value, some owners self-insure the hull and carry liability only. For a more valuable aircraft, or if a total loss would be a financial hardship, hull coverage makes sense. Either way, carry liability coverage — the exposure from injuring others or damaging property far exceeds the hull. See our insurance guide.
Figures in this article are illustrative for the 2026 market and are not offers of credit. Jaken Aviation is a licensed aircraft financing brokerage — a division of Jaken Finance Group — and does not make loan decisions. All financing is subject to lender approval. Tax and legal information is general; consult a qualified professional.
Related Questions
Can I drop hull coverage to save money?
Only if you own the aircraft outright — a lender requires it while financed. Weigh the hull value against the premium, and keep liability coverage regardless.
Do I still need liability if I skip hull?
Yes — liability is the coverage that protects you from the large exposure of injuring others or damaging property. Don't skip it.
Does an older aircraft cost more or less to insure?
Hull premiums track the (lower) hull value, but older, complex airframes can carry other risk factors. Pilot experience still dominates the premium.
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