Aircraft hull insurance
Cover for physical damage to the aircraft itself, in flight and on the ground, written on an agreed value basis alongside a separate war cover.
Russia, March 2022: more than five hundred airliners leased to Russian carriers are stranded there, their local re-registration is authorized on March 14, and lessors claim roughly ten billion dollars. The London trial of 2024 and 2025 turned largely on one boundary, the one between hull all risks cover and hull war cover, each pointing to the other. Aircraft hull insurance, or aviation hull insurance, pays for physical damage to the aircraft, engines and equipment included, in flight, while taxiing or on the ground. It is written on an agreed value basis, fixed at inception and not open to argument at the time of loss, because a thin secondhand market would make any adversarial valuation endless, and the premium is quoted as a hull rate on that value. The deductible applies only to partial damage; on a total loss the aircraft is settled at full value, with spares under a separate section. Everything turns on clause AVN 48B, which excludes war, hijacking, confiscation and terrorism, sent instead to a hull war cover placed in another market, on other terms and cancellable at a few days' notice. Hull gets confused with aviation liability, which pays passengers and third parties on the ground and leaves the airframe aside. Airlines buy both in a hull and liability policy, and the AVN 52 endorsement writes back part of the war liability that AVN 48B took out. Very costly single assets, rarely destroyed but then destroyed outright, whose loss experience only pools across a worldwide fleet.
Textbook case with numbers. A narrowbody is insured at an agreed value of 50 million dollars, at a hull rate of 0.15%, or 75,000 dollars of annual premium, with a 1 million dollar deductible on partial damage. A taxiing collision costs 3.2 million to repair, and the hull market pays 3.2 less 1, or 2.2 million. If the aircraft is destroyed, the deductible falls away and the market pays the full 50 million agreed value, with no appraisal of market value. If a state confiscates it on the ground, the all risks policy sends it to hull war through AVN 48B.
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