You land a little hard, the prop touches the runway, and the rental goes back to the hangar on a tug. Most renter pilots know the next question is who pays for the repair. Fewer expect the second bill: loss of use, the money the flight school or FBO lost while its airplane sat in the shop.
What loss of use means on a rental
A rental aircraft earns money every hour it flies. When it is grounded for repairs, the owner loses that income. Some rental agreements let the owner pass that lost revenue to the pilot who caused the damage. Avemco describes it as the situation where the flight school or FBO loses revenue when it is unable to rent the airplane during the repair process.
It is separate from the repair. The owner's hull insurer pays to fix the airplane and may try to recover that cost from you. Loss of use sits outside that claim, so the owner may bill you directly.
A real example
EAA shared the story of a student pilot whose Cessna 172 landed hard in a gust, blowing a tire and damaging the propeller and firewall. The insurer expected repairs of roughly $30,000 and three or four months out of service. The student then received two letters: one from the insurer seeking to recover the $30,000, and one from the flight school seeking $6,000 in lost income under its rental agreement.
Read your rental agreement first
Schools handle this differently. Some agreements make the renter responsible for lost income while the aircraft is down. One published agreement we reviewed says the renter is not held responsible for down time of an aircraft. You only know which kind you signed if you read it.
Before your next rental, look for these items:
- Any clause that mentions loss of use, lost revenue or downtime
- Whether the charge is a daily rate, an hourly rate or "actual lost income"
- Whether there is a cap on the downtime charge
- What you owe toward the owner's deductible
How your own policy can help
This is one reason we suggest every pilot who rents carries their own aircraft renters insurance. It is built for the gaps the owner's policy leaves open.
A Skywatch policy includes coverage for loss of use of a non-owned aircraft for which you are legally liable. That loss of use limit is included within your overall damage limit, so when you choose a limit, think about both the repair and the downtime. Plans run by the day, week, month or year, which suits student pilot insurance needs as well as occasional renters.
Comparing aviation insurance options? Ask each provider whether loss of use is included and how it is limited.
FAQ
What is loss of use on a rented aircraft?
The income the owner lost while the airplane was being repaired after damage you caused.
Does the owner's insurance pay loss of use?
Not necessarily. The hull policy pays for the repair, and depending on the rental agreement, lost rental income can be billed to the renter.
Can a flight school charge me for downtime?
It depends on the rental agreement you signed. Some allow it, others do not.
Does Skywatch renters insurance cover loss of use?
Yes. Loss of use of a non-owned aircraft for which you are legally liable is included, within your overall damage limit.
How do I avoid a surprise downtime bill?
Read the agreement, ask how downtime is charged, and carry a non-owned policy with a damage limit that fits the airplane.
