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Aircraft hull deductible insurance

A separate policy that pays, up to an agreed amount, the deductible an airline retains on its hull policy, for frequent partial damage such as bird strikes or ground equipment collisions.

Definition

Aircraft hull deductible insurance is the separate policy that pays, up to the agreed amount, the deductible an airline retains on its hull policy. In 2023, US airports reported 19,603 wildlife strikes to the FAA (Federal Aviation Administration), 14% more than the 17,205 of 2022. From 1990 to 2023, reported costs to civil aircraft reached $1.48 billion. Engines and wings each account for a quarter of damaged components. Almost all of those claims sit under the hull deductible. An airline carries high deductibles because hull insurers do not want to handle frequency and the carrier prefers lower premium on a fleet it knows. Partial damage, a fan blade, a leading edge, a door hit by a jet bridge, stays with the airline. Hull deductible insurance takes back all or part of that retention, up to an amount per claim and often under an annual aggregate. Some wordings add mechanical breakdown or engine lease-in costs. It is a separate market, written by different capacity from the main policy, on its own terms. On wording, the deductible usually applies to partial losses and not to a total loss, so deductible insurance almost never responds to the accident that makes the news. Frequency is both its business and its risk. A hail season at a base or a run of bird strikes around one airport moves the rate at renewal more surely than a major accident.

Its 6 cross-references, woven across the glossary's 18 categories
Aircraft hull deductible insurance: Transport glossary illustration, AlgoPolis
Example

An A320 ingests a gull on takeoff; two fan blades must be replaced and the engine goes to the shop. The cost stays under the airline's hull deductible. If it bought deductible insurance, that policy pays above its own retention and within its annual limit; otherwise the repair is an operating expense.

Read next
TransportAircraft hull insuranceCover for physical damage to the aircraft itself, in flight and on the ground, written on an agreed value basis alongside a separate war cover.Read the entry →TransportBird strikeA collision between an aircraft and a bird or other animal, almost always minor but costly once it goes through an engine. It is the leading frequency claim on hull policies, with the occasional total loss.Read the entry →Special risksAviation insuranceLine of business covering the aircraft itself and liability to passengers and third parties, under the Warsaw and Montreal conventions.Read the entry →
Related terms
Also known as

hull deductible insurance, hull deductible buy-down, airline deductible, hull excess

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