The short answer
Aircraft insurance has two main parts: liability coverage (bodily injury and property damage you cause to others) and hull coverage (physical damage to your own aircraft). Financed aircraft also carry a breach-of-warranty endorsement protecting the lender's interest.
The Two Main Coverages
- Liability: covers bodily injury and property damage you cause to others, up to your policy limits. Some policies distinguish per-passenger sublimits — read the details.
- Hull: covers physical damage to your aircraft. ‘In-motion’ and ‘not-in-motion’ coverage may be distinguished, and the hull value should reflect the aircraft's actual value.
On a financed aircraft, the lender is protected by a breach-of-warranty (lender's-interest) endorsement, so their interest is covered even if the borrower violates a policy term.
Common Exclusions and Conditions
Policies contain conditions and exclusions — the pilot must meet stated qualifications (ratings, hours, recency), the aircraft must be airworthy and used as declared, and certain operations (some aerobatics, unapproved commercial use) may be excluded. Wear-and-tear and mechanical breakdown are generally not covered (that's maintenance). Read your policy so you understand exactly what's covered and what's required of you.
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
What is a breach-of-warranty endorsement?
A lender's-interest endorsement that protects the lender's interest in the aircraft even if the borrower violates a policy term. Lenders require it on financed aircraft.
Does insurance cover maintenance or wear?
No — insurance covers sudden accidental damage and liability, not routine maintenance, wear, or mechanical breakdown.
Are passengers covered?
Liability coverage generally extends to injuries to others, but some policies apply per-passenger sublimits. Check your policy's limits.
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