Aviation Insurance
Overview
An aircraft is one of the most expensive machines a business can own, it carries hundreds of lives at once, and it can fall on a city it has never visited. No single insurer in Nigeria, or anywhere else, could pay for all of that alone. Aviation insurance is the answer the market built: a bundle of covers that protects the aircraft, its passengers and everyone on the ground, backed by pools and reinsurers who spread one catastrophe across the whole world.
In this lesson you will meet the three covers at the heart of every aviation programme, learn the risks that make this class unlike any other, see how the Chicago and Montreal Conventions and Nigerian law shape what an airline must buy before it may fly, and understand exactly why these risks are almost always reinsured or placed with a pool. You will work through the calculations an examiner can build from a single air crash.
Objectives
- Identify the types of aviation insurance policy and the cover each provides
- Describe the risks peculiar to aviation insurance
- Explain the effect of international regulation on aviation insurance
- Explain why aviation risks are commonly re-insured or placed with a pool
Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on Aviation Insurance. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- Under an aviation insurance programme, loss of or damage to the aircraft itself is met by the: A. Passenger liability cover B. Hull cover C. Third-party liability cover D. Products liability cover Answer: B
- Goods carried by air are normally insured under a: A. Hull policy B. Hull war policy C. Marine cargo policy D. Passenger liability policy Answer: C
- The international convention that fixes an airline's liability to international passengers and has been adopted into Nigerian law through the Civil Aviation Act is the: A. Chicago Convention B. Rome Convention C. Montreal Convention D. Geneva Convention Answer: C
- An aircraft hull worth 10,000,000,000 naira is co-insured, the leading insurer taking a 20 per cent line. On a total loss the leading insurer pays: A. 10,000,000,000 naira B. 8,000,000,000 naira C. 5,000,000,000 naira D. 2,000,000,000 naira Answer: D
- Aviation risks are commonly reinsured chiefly because: A. premiums charged are very small B. a single event can concentrate hull, passenger and third-party losses together C. aircraft almost never suffer accidents D. the law forbids insurers from keeping any aviation risk Answer: B
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Past Questions
Wondering what past questions for this topic looks like? Here are a number of questions about Aviation Insurance from previous years
Question 1 Report
- Explain aviation insurance.
- List and explain three covers provided by aviation insurance.
- technical feasibility;
- economic feasibility.