A grounding or "lay-up" credit is a return of some of your aircraft insurance premium if the aircraft is not flying for an extended period of time. Most underwriters that issue grounding credits do so if the aircraft is down for at least 90 days and is not grounded due to an insurance claim. Even if your policy doesn't have a provision for grounding credits, we may be able to negotiate one for you if you follow these steps.
Step 1: Grounding the Aircraft
It is far easier to get a grounding credit if the underwriter is aware of the situation in advance. You should forward us a letter when the aircraft is being grounded. The letter should identify the aircraft, the date it is grounded, the reason for the grounding and the expected time frame for the return to flight. Please get us this letter promptly so we can have it entered into your underwriting file.
Step 2: Returning the Aircraft to Flight
To return the aircraft to flight, we will need another letter stating when the aircraft was grounded, why it was grounded and when it will be returned to flight. You should also include any applicable copies of the airframe and powerplant log entries that would support your request.
Step 3: Receiving your grounding credit
It usually takes four to six weeks for the underwriters to process your request for a grounding credit and issue it. The grounding credit is usually 40 - 60% of the earned hull premium for the period that the aircraft was down, but the amount can vary based on the aircraft and circumstances. If your aircraft insurance premium was financed, the credit will be returned to the premium finance company who will, in turn, reduce your monthly payment amount.
