How AMA Insurance Works

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"When I look back on it now, I am so glad that the one thing that I had in my life was my belief that everything in life is a learning experience, whether it be positive or negative. If you can see it as a learning experience, you can turn any negative into a positive."

—Neve Campbell

If you are anything like me, you prefer life throwing positive experiences your way. Yet some of my more memorable lessons came from adversity. I’ll spare you the details; after all, my therapist gets paid to listen to my madness, but why do I bring this up? I thought this would be a perfect introduction for this month’s topic: insurance.

I have written about insurance in the past, but I want to mention again that AMA doesn’t determine coverage or adjust claims. AMA contracts with an independent claims adjuster known as a Third-Party Administrator (TPA), who works on behalf of the insurance company to review the specifics of each incident to determine whether coverage is applicable. Your AMA team serves as the initial liaison between you, the AMA member, and the TPA.

Recently, there was some online discussion about AMA’s member insurance coverage, its excess status, and how and when it works when other applicable coverage—usually homeowners coverage—is involved. Although I can’t go into the details of the incident that prompted the debate, I want to use some general information to better explain the insurance coverage provided to you as a membership benefit.

First, AMA’s insurance is "excess" to any other applicable insurance coverage. Therefore, if your modeling activities cause property damage or bodily injury, you must submit a claim through any other insurance coverage you have available that would respond to this kind of claim.

So, when does AMA’s coverage come into play? If you don’t have any other insurance, AMA’s coverage would be primary. This would also be if you have other liability insurance, but it doesn’t provide coverage for your modeling activities. This is usually determined by a specific exclusion listed in your policy.

Finally, if you are involved in a claim that exceeds the insurance limits of your other applicable coverage, AMA’s liability coverage will fill in the gaps.

I like to use examples, so bear with me.

Example 1: Orville Wright is at an event flying his aircraft. His airplane crashes into a truck owned by Charles Lindbergh, causing property damage. One of the following results:

A: Orville submits the claim into his homeowners insurance and that insurance pays the claim.

B: Orville turns the claim into his homeowners insurance, which denies the claim because the policy specifically excludes model aircraft. Orville submits the claim and denial to AMA. The TPA pays the claim.

C: Orville doesn’t have any other insurance and submits the claim to AMA. The TPA pays the claim.

Example 2: Orville is at the event and his aircraft crashes into a nearby barn, starting a fire. The fire damages/destroys farm equipment and the barn, causing $300,000 in property damage.

A: Orville has homeowners coverage, but only for $100,000. He submits the claim to his homeowners insurance and to AMA. The homeowners insurance will pay the $100,000 and AMA’s TPA will pay the remaining $200,000.

Sometimes a homeowner’s adjuster might deny a claim because the incident was unexpected or unforeseen. When we encounter such reasoning, we obviously disagree because an accident is rarely an expected or foreseen event.

In these cases, AMA can serve as your advocate and reach out to its resources, including our legal counsel or TPA, to contest the homeowner carrier’s denial. However, if the homeowner carrier’s adjuster maintains its stance, AMA’s TPA’s hands are tied based on the policy language, and they cannot pay for the damages.

If I were to talk with Charles Lindbergh, I would tell him that in my 22 years of working for AMA, I have only encountered one claim in which a homeowner’s carrier denied liability and then stuck their collective heads in the sand.

Until next time!
 

ilona maine
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41 comments

Must you be at an AMA approved site or location to have insurance through AMA?

No, AMA’s Liability coverage is not limited to flying at chartered club sites or sanctioned events. The coverage also applies to model operation on private or public property.

Must I be at an AMA approved site to have AMA insurance coverage?

Thanks for putting in these words. Easy to understand and clear what and how it works. Thanks.

am i reading your article correctly. if i submit a claim to my homeowners insurance and the insurance denies the claim, the home owners insurance the AMA insurance and the TPA wont pay. that means we have no insurance

No. If your primary insurance carrier denies coverage, meaning your policy doesn't cover your modeling activities, your AMA insurance would become primary. The situation I mentioned in the article referenced very rare cases where the primary homeowner's carrier had coverage for the modeling activities but denied the claim because they said the incident was unexpected and unforeseeable. I think you and I both would agree that we have insurance for accidents, and they are always unexpected and unforeseeable. In this case, the homeowner's insurance would still hold the primary position. I know this is a bit confusing. Feel free to reach out to me via phone if you would like to discuss further. My extension is 251.

Question: Can you please explain the possible multiple processes that may occur under this scenario; Yes, I have home owners insurance. Yes, I have AMA insurance Yes, I have a Verifly policy in place for my FAA part 107 drone flight. Named insured is myself & additional insured is my LLC name. A liability accident occurs. How might this play out? Thanks for your feedback.

AMA insurance explanation Was fantastic, I’ve always wondered how it worked. I’ve been flying radio controlled airplane since I was 14 and I’m now 65. My ear main number is one 3491. I’ve never ever had to make a claim using AMA, but I’ve always wondered how it worked. Thanks for a fantastic exclamation!

Ilona, this was wonderfully and very simply explained. I often encounter new members who do not understand how the AMA insurance works. I can now simply send them the link to this article. Thanks for doing this.

So you're saying that if I'm flying at an event at my local field 20 miles from home my homeowner's insurance will cover me totalling someone's car with my aircraft? Seriously?

Generally speaking yes. Obviously you should always check with your insurance carrier and/or agent about the terms of your specific policy. The liability portion of most homeowner's policies is not limited to just your property.

I was reading your article about AMA insurance and my question about the article is I’m pretty sure my homeowners insurance will not pay for any accidents that occur on someone else’s property and I can’t imagine anyone else’s doing so. So in that case would AMA insurance pay?

The liability portion for most homeowner's policies is not limited to accidents happening on your own property. Obviously you should always check with your insurance carrier/agent about the specific terms for your policy. If your homeowner's policy denies coverage for your modeling activities, yes, AMA's coverage would be applicable.

From the short article, it sounds as though I need to have specific model airplane coverage or a policy clause stating totally not covering model airplanes or no home owners policy at all. Example 2 seems to be if I have a home owners policy and nothing is specifically said about model aircraft and home owners denies claim, nobody covers anything in coverage.

Generally speaking, a homeowner's policy would respond to a model aircraft incident. There are very few policies that currently exclude model aircraft activity. Example 2 actually pays the claim. The situation in the next paragraph references very rare cases where the primary homeowner's carrier has coverage for the modeling activities but denies the claim because they say the incident was unexpected and unforeseeable. I think you and I both would agree that we have insurance for accidents, and they are always unexpected and unforeseeable. In this case, the homeowner's insurance would still hold the primary position. I know this is a bit confusing. Feel free to reach out to me via phone if you would like to discuss further. My extension is 251.

Hi, thanks for the clarification! I feel safer flying now I know how the insurance works.

The article explaining AMA Insurance is clearly written. It reference's 'the insurance company". Is AMA the actual insurance company or is there another company that is "the insurance company"? If AMA is not the actual insurance company, what is the name of "the insurance company"?

AMA is not an insurance company. We work with insurance brokers who in return work with a specialty market, and purchase the insurance policies and assure that AMA members, clubs, etc. are listed as insured on the policy. The insurance company underwriting the liability portion is Westchester Surplus Lines Insurance Company.

By the sound of it if you have homeowners insurance you don't need AMA

I agree. And why should I file a claim with my homeowners policy if I have AMA? Now that's going to be a "Claims Frequency" that ins likes to shove down our throats! With AMA I'm being punished for owning a home!

What is TPA?

A TPA, or third-party administrator, is a company that provides operational services such as claims processing under contract to another company. Insurance companies often outsource their claims processing to third parties.

Same question as a previous inquirer. Does AMA insurance only cover a pilot if they are participating at an approved AMA site? What if I’m flying a plane at a local public park or open field?

AMA’s Liability coverage is not limited to flying at chartered club sites or sanctioned events. The coverage also applies to model operation on private or public property.

How would my homeowners insurance cover me when I am not at home ? Example: at my club flying site.

The liability portion for most homeowner's policies is not limited to accidents happening on your own property. Obviously you should always check with your insurance carrier/agent about the specific terms for your policy.

Your example of a Homeowners Insurance company denying a claim because they said the incident was "unexpected and unforeseeable". That is exactly the type of claim that would be covered. What would not be covered would be a foreseeable or expected result.

Most members probably don't realize there is a huge gap in the coverage provided by their homeowners and the secondary AMA coverage. While homeowner's coverage covers you and your equipment even if you're not at home, what people don't know is it only provides insurance for the perils specified in the policy. This would include loss or damage of a plane from fire, theft, water damage etc. but not equipment if it results from an auto accident while transporting it. Neither does your auto or specific trailer insurance if you have that. This is because it is considered "cargo" and my insurance company, State Farn, does not even offer that type. Of course, the value of the equipment you're carrying determines how important having this type of insurance is to you. When I first found this out, I called around and was told that cargo insurance is called "inland marine" and its usually what truckers have. But I was not able to get that insurance because of the differences in how and what the insurance companies provide trucking carga vs what we need for our planes. I also ran into resistance because the carriers simply could not understand how a "toy airplane" could be worth 15 - 20 K, let alone 2 or 3 of them in one trailer!! I think they thought I was setting up some sort of a insurance scam by overvaluing my so-called cargo. I wish the AMA would address this issue or advise us if they know a source.

If you were at the field, a club member, and you experienced one of the following mishaps would AMA cover go into effect as the back-up insurance policy? Trip, fall and experience bodily injury. Get your fingers or body part caught in a plane of your or others. Bit or harmed by a animal at the field Domestic? Wild? Snake, spider, etc. Thanks

I have homeowner's insurance with liability to 100K that covers modeling activity, and a 1Mil umbrella liability policy that covers from 100k up. Why should I be required to purchase AMA's insurance at all? Ever? It's completely redundant and useless.

Is there any additional coverage for club officers and contest directors in case they are being sued?

Thanks for your explanation. As a club officer I am curious regarding none model aircraft related incidents. Let's say a member of our club gets hurt while mowing the club field, would AMA insurance apply at all or does the club need to have separate liability insurance for such incidents?

Our club has a tractor used for field maintenance. If a club member or spectator is injured using the tractor is this an insured accident?

Hi, Thanks for the information above. Can you please confirm if the coverage extends beyond the US? For example, if I travel to Europe on vacation. Thanks!

An indoor flying event is held at a local church. If damage were to occur (like damage to the floor from a carbon fiber blade) my understanding based upon the above information is that the church’s insurance would be primary. And then is it the individual who was flying the craft that caused the damage and it would be his AMA membership’s coverage to handle anything that the church’s insurance did not cover? One issue might be that no one presents AMA card at these events so who knows if they are all members. And who knows if their children (who are flying aircraft at the event) are covered? I’m guessing that just because the event was setup by a local AMA flying club - it’s still the individual’s AMA membership that would be responsible. Is that correct? I ask these questions for someone who is considering getting an AMA membership and they want to know more about what they are paying for. Thank you for the details you have provided so far.

Does the ins. Cover bodily injury.

Can you please clarify if the Liability Insurance is covering me flying in Europe.

how do I purchase insurance?

Suppose i was flying say at a schoolyard. With no permission or someone's private property without permission. I have no homeowners . would i be covered?

i have this coverage.........where do you file a claim if needed?

In the circumstance cited where the members insurance denied coverage due to “unexpected” nature of the incident, wouldn't it be logical to sue the insurer? Their arbitrary denial can certainly not be the last recourse.

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