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You CAN Lose Your Aircraft: The Case for Title Insurance

Contributed by Stephan Asper, Senior Vice President of Marketing for AIC Title Service, LLC.

Picture this: You buy an aircraft and have a thorough title search done. It looks clear, and you operate the aircraft with no issues for six months. Then, out of the blue, you receive notice that there is a lien against the aircraft. The lien is not against the person you purchased it from, but from a prior owner who didn’t pay his property taxes. You are now liable for those taxes because the taxing authority filed a lien two years ago against what is now your aircraft.

Far-fetched? No, it’s not. It happens.

The remedy? Title insurance.

What is aircraft title insurance?

Title insurance is protection for your asset; in this case, it’s an aircraft.  A title search will only tell you so much, and title insurance protects against what the search does not and cannot reveal.  Aircraft title insurance is an instrument designed to indemnify aircraft owners against many possible losses that are not and cannot be found in a search of the FAA records. It’s a way to protect yourself.  

Title insurance is important. Mainly because you like your plane, and you spent a lot of money on it, and you want to keep it. That’s right. People have actually lost their aircraft due to title problems.

Close to 30 percent of pre-owned aircraft available today have some sort of cloud on their titles. Owners have lost their aircraft, or had to pay excessive legal fees to defend their title claim. Purchasing aircraft title insurance is the only way for aircraft owners to know for certain that they are best protected from financial loss and legal problems regarding the title of their aircraft.

Think about it! If a claim is made that is covered by your policy, the title insurance company will hire an attorney and pay the legal fees necessary to defend your title. If a claim results in complete loss of title, the company will pay the lesser of the value of the aircraft, the amount of the loan or the amount of the policy at the time of the loss. 

This is a pretty sweet deal considering someone just took your plane away from you.  With title insurance on your side, you can keep a whole lot of hurt from being a whole lot worse. There is no downside to buying title insurance for your new plane. 

How much will it cost?

Title insurance is not expensive. It is a one-time expenditure that is typically less than 1% of the aircraft’s purchase amount and often less than half of the first year’s hull liability policy.

Seriously. A one-time expenditure that accounts for less than 1% of the aircraft’s purchase amount. It’s worth it to protect the large investment you just made. 


A title search cannot unearth the myriad of issues that can plague an aircraft title. The FAA only requires that you register and record through their registry.  Not only are there many types of liens and other issues that arise that can’t be recorded with the FAA, the FAA doesn’t have the final legal authority in determining ownership. The final arbiter in ownership disputes is the state court system. Though you can’t know for certain that your title is clear, you can be certain that you are protected, but only if you buy title insurance. 

Stephan Asper, who has a 30-year aircraft finance background, began his career with Cessna Finance Corporation in 1974. He has held senior management positions with Bank One, United National Bank and IAM Aircraft Finance Group. Stephan joined Aero Records & Title Company in 2004 as Vice President of Marketing and served as President from 2008-2010. In June 2010, he joined AIC Title Service, LLC. Stephan has been a long-standing member of the National Aircraft Resale Association (NARA) and the National Aircraft Finance Association (NAFA). He is currently serving on the HAI Finance and Leasing Committee. Stephan is also a licensed private pilot with an instrument rating and more than 1,500 hours of flight time.

AIC Title Service, LLC, is a respected aviation title and escrow service provider committed to delivering a high level of service. For more information, go to www.aictitle.com.

Posted on: October 2, 2012