July 13, 1998

INSURANCE INFORMATION NOTICE NO. 99-2

SUBJECT: PROCEDURES FOR REPAIRING AIRCRAFT AND WATER VESSELS (OVER 26 FEET)

COVERED BY THE COMMERCIAL INSURANCE MARKET

The Office of Risk Management (ORM) provides up to the first $25,000 in hull coverage on State- owned aircraft and up to the first $50,000 in hull coverage on water vessels (over 26 feet in length). ORM then secures excess hull coverage through the commercial insurance market for all amounts above these limits up to the value of the aircraft or water vessel. The agency is responsible for the $250 deductible on any hull claim.

Before an aircraft or water vessel is repaired, it is mandatory that the loss be reported to the ORM Claims Transportation Unit, which then reports the claim to the respective commercial insurance company. Next, the assigned adjusters from both ORM and the commercial insurance company make recommendations on the procedures and/or actions to be taken to repair the aircraft or water vessel.

The ORM Claims Transportation Unit must be contacted immediately if a dispute arises between the repairer and the commercial insurance company adjuster. If the agency attempts to repair the aircraft or water vessel before ORM and/or the commercial insurance company adjuster has been made aware of the claim and has had the opportunity to inspect the damage, coverage by both ORM and the insurance company is jeopardized. ORM and the insurance company have the authority to deny a claim if a repair is made without its knowledge or if the recommended procedures for a repair are not followed. The agency will be fully responsible for any payments due on the repaired aircraft or water vessel if ORM or the insurance company refuses to pay the claim.

If you have any questions or need additional information, please contact Walter Lockhart in the Claims Transportation Unit at (504) 342-8466.