How AMA Insurance Works

"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!