Aircraft value and loss terms

Agreed Hull Value and Underinsurance: Read the Loss Terms

Published by Sky Aviation Insurance | October 16, 2026

Agreed hull value is the aircraft value accepted for the policy. It does not mean every claim pays that amount. Before you bind, check the insured figure and the terms for repairs, total loss, deductibles and salvage. Those terms help explain what the value means when a covered loss occurs.

Read the clause sheet

Start with the numbers

Keep three figures in view

USAIG says most aviation policies use an agreed value basis. It also warns that setting the figure too high or too low can have unwanted results after damage. Use its aircraft value guidance as a reason to check the number, then read the terms offered to you.

Write these three figures on one page. They answer different questions, so record the source and date for each.

The insured hull value

What amount appears in the quote or policy? Which aircraft does it describe? Check the schedule and any change to that amount.

Current value evidence

What evidence supports the value you are asking to insure? Keep the aircraft's equipment, condition and records in view when choosing comparisons.

The loan balance

What do you still owe? Keep the lender's requirements beside the insurance terms. Ask how any lender interest must be shown.

For illustration, a $240,000 insured figure and a $275,000 value estimate differ by $35,000. That is a gap to discuss before binding. It is not a claim calculation, an appraisal or proof of what a replacement would cost. The estimate itself still needs sound evidence.

Support the request

Show what makes this aircraft different

A price for the same model is a starting point. Make a short note of the features that make it a fair comparison. Include the model year, installed equipment, aircraft condition and the date of the value evidence. Flag any details you cannot verify.

Global Aerospace's insured value guide points to market comparisons, valuation guides and appraisals as ways to inform the figure. Ask which evidence is needed for your request. Do not treat an online asking price as proof of a completed sale.

Keep upgrade invoices with that file, but do not add their full cost to an old value without review. In its November 2024 article on insuring to value, Avemco explains that installed avionics may add less market value than their purchase cost.

For a privately used aircraft, review Sky's private aircraft insurance page alongside your own details. The value request should describe the aircraft you have now.

Read beyond the amount

Check who can choose repair or payment

A low insured value can affect more than the amount available to replace an aircraft. Avemco's value guide explains that it can make a repairable aircraft a total loss under the policy. A high value can lead to repair where the owner expected a total loss payment. Read the actual clause before choosing the figure.

One public example shows why that clause matters. Avemco's Direct Approach specimen, form POL0001 dated August 1, 2016, gives the insurer an option to pay its limit when estimated transport and repair or parts replacement costs exceed 70% of insured value. The same page addresses salvage ownership and payment to a listed lienholder. See Coverage B, printed page 7.

That is an example from one dated form, linked on Avemco's site on October 16, 2026. It is not a rule for every policy or evidence that Sky offers that form. Your own form, schedule and endorsements need to answer the question.

When you compare aircraft insurance quotes, mark any difference in the value or loss terms. A matching number alone does not show that two offers settle a loss the same way.

A page to keep with the quote

Build your clause-reading sheet

Use these prompts while reading the offered documents. Beside each answer, note the form name, edition, page and any endorsement that changes it. Leave a blank where the documents do not answer the question. Take those blanks to your insurance contact before asking for coverage to start.

Value and basis

Where is the insured amount shown? What words explain how that amount is used? Does the aircraft description match?

Repair or total loss

Who chooses the settlement route? What costs enter the test? Does the clause use a percentage, a formula or another standard?

Covered loss and conditions

What must be true for this loss to be covered? Which exclusions or endorsements need a closer review?

Deductible

What amount or formula applies? Does it change with the cause or type of loss? Find the written answer rather than assuming a flat amount.

Salvage and title

Who keeps the damaged aircraft or parts after settlement? What title documents are required? Ask before assuming you can keep the salvage.

Payment and lender

Who is named to receive payment? Is the lender shown correctly? What further written evidence does the lender need?

Do not fill a gap with a term from a different insurer's website. Ask for the clause that applies to your offer. Keep the answer with the quote so you can find it again.

Resolve the open points

Settle the value questions before you bind

Check that the final documents show the amount you agreed to request. If the aircraft details, value or lender information need a change, ask what written confirmation is required and when it takes effect. Do not assume that sending an email has changed the policy.

Once the value and terms are clear, you can ask how they affect the offer. Sky's guide to aircraft insurance premium factors explains the broader inputs. Keep the value decision grounded in the aircraft and the contract.

Your next conversation

Bring the value evidence and the terms

Have your quote, aircraft details and open questions ready when you contact Sky Aviation Insurance. Ask what information is needed to review the requested value and the offered terms for your situation.

Discuss your aircraft

This is general educational guidance. It does not confirm coverage, value an aircraft or predict a claim payment. Coverage and settlement depend on the insurer's written policy, schedule, endorsements, exclusions and conditions.