Hangar Insurance Requirements You Need to Know

Owning or leasing an aircraft hangar involves more than just physical maintenance—proper insurance coverage protects your investment against unexpected losses. Understanding the different types of hangar insurance helps you build comprehensive protection without paying for coverage you don’t need. Here’s what every hangar owner should know about insurance requirements.

Types of Hangar Insurance

Hangar insurance isn’t a single policy but rather a combination of coverages tailored to your specific situation:

Property Insurance: This covers the physical hangar structure against damage from fire, wind, hail, lightning, vandalism, and other covered perils. Property insurance typically pays to repair or rebuild your hangar up to the policy limits. If you own the building, property coverage is essential. Lessees may not need this coverage if the landlord’s policy covers the structure.

Liability Insurance: Perhaps the most critical coverage, liability insurance protects you if someone is injured in or around your hangar, or if your hangar operations damage someone else’s property. This includes slip-and-fall accidents, fire spread to adjacent hangars, and injuries during aircraft movement. Most airports require minimum liability limits as a condition of your lease.

Contents Coverage: This protects items stored inside your hangar—tools, equipment, parts, aviation supplies, and personal property. Contents coverage is separate from aircraft insurance and covers non-aviation items that support your operations.

Hull Coverage Basics for Stored Aircraft

Your aircraft requires its own insurance policy separate from hangar coverage. Hull insurance covers physical damage to your aircraft from various perils:

Ground Risk Hull Coverage: Protects your aircraft while it’s on the ground—including inside your hangar. This covers damage from hangar fires, wind events, vandalism, theft, and ground handling accidents. Even aircraft that rarely fly need ground risk coverage.

In-Motion Coverage: Extends protection to cover your aircraft while taxiing, taking off, or landing. This is typically more expensive than ground-only coverage due to increased risk exposure.

All-Risk Coverage: The most comprehensive option covers your aircraft during all phases of operation, both on the ground and in flight. Most active pilots choose all-risk policies.

When determining hull coverage amounts, insure your aircraft at its current market value. Underinsuring means you’ll receive only partial compensation after a total loss. Review and adjust coverage annually as aircraft values fluctuate.

Liability Requirements and Limits

Airports and FBOs typically mandate minimum liability coverage for hangar tenants. Common requirements range from $1 million to $5 million in combined single limit coverage. However, these minimums may not adequately protect your personal assets.

Consider your total exposure when selecting liability limits. If a fire originating in your hangar destroys neighboring aircraft worth millions of dollars, you could face claims exceeding minimal policy limits. Many aviation insurance professionals recommend at least $1 million in liability coverage, with higher limits for hangars in close proximity to others or those storing multiple aircraft.

What Affects Premiums

Several factors influence your hangar insurance costs:

• Location: Coastal areas face higher wind risk; regions prone to tornadoes or hail pay more
• Construction Type: Steel buildings typically cost less to insure than wood frame structures
• Fire Protection: Hangars with sprinkler systems and nearby fire stations receive rate discounts
• Security Features: Alarm systems, cameras, and controlled access can reduce premiums
• Claims History: Previous claims increase future premiums; claim-free discounts reward good records
• Coverage Limits: Higher limits cost more, but increasing coverage often costs less per dollar of protection
• Deductibles: Higher deductibles reduce premiums but increase your out-of-pocket costs after a claim

Common Policy Exclusions

Understanding what your policy doesn’t cover is as important as knowing what it does. Standard exclusions often include:

Flood Damage: Standard property policies exclude flood damage. If your hangar sits in a flood-prone area, you’ll need separate flood insurance through the National Flood Insurance Program or private insurers.

Earthquake Damage: Most policies exclude earthquake damage, requiring a separate policy or endorsement in seismic zones.

Wear and Tear: Insurance covers sudden, accidental damage—not gradual deterioration from age or lack of maintenance.

Intentional Damage: Damage you cause deliberately is never covered.

War and Terrorism: Many policies exclude damage from acts of war or terrorism, though terrorism coverage may be available as an endorsement.

How to Shop for Hangar Insurance

Finding the right coverage at competitive prices requires some legwork:

Work with Aviation Specialists: General insurance agents may not understand aviation-specific risks. Seek brokers specializing in aviation insurance who understand hangar exposures and can access specialized markets.

Get Multiple Quotes: Obtain quotes from at least three insurers to compare coverage and pricing. Ensure you’re comparing equivalent coverage levels.

Review Policies Carefully: Read the entire policy, not just the declarations page. Understand coverage limits, deductibles, exclusions, and conditions.

Bundle When Possible: Combining hangar and aircraft insurance with the same carrier often yields multi-policy discounts.

Review Annually: Reassess your coverage each year. Property values change, operations evolve, and better options may become available.

Proper hangar insurance provides peace of mind and financial protection against unexpected events. While premiums represent an ongoing expense, they’re far less costly than facing a major loss without adequate coverage.