Two federal agencies are primarily responsible for investigating GA  accidents and ensuring aviation safety: FAA and NTSB. The Office of the Secretary of Transportation (OST) within DOT is  responsible for ensuring that commercial air carriers meet minimum  liability insurance coverage amounts for liability, as required under federal  law, and FAA has assumed this role pursuant to a memorandum of  understanding with OST. The Majority of States Have No GA Liability Insurance or Related Financial- Responsibility Requirements, Although Other Entities May Impose Such Requirements

		Eleven States Impose Either Liability Insurance or Aircraft Financial- Responsibility Requirements Applicable to Some GA Aircraft Owners and Operators

Based on our survey of state aviation officials and analysis of state  statutes and regulations identified by such officials, as of April 2015, the  majority of the states do not have liability insurance requirements  applicable to GA aircraft owners and operators (see fig. Minnesota  is the only state that has a liability insurance requirement applicable to  nearly all GA aircraft owners. premiums for aircraft with certain characteristics. For example, for a Cessna 172 aircraft,  owned and operated by a pilot who has achieved at least a private pilot’s  certificate, the range of premiums was estimated from $200 to $550  annually for the $1 million/$100K policies and $500 to $1250 annually for  the $1 million smooth policies, according to the three nationwide brokers  we interviewed. From these interviews,  we identified the five most frequently cited factors, which include  considering: 1) the costs borne by victims and the public in the absence  of a liability insurance requirement; 2) the extent of the problem; 3) the  cost impact on the GA community if a requirement were adopted; 4)  implementation and administration issues of a potential requirement; and  5) the potential public safety benefits of a requirement. Extent of the Problem

Forty-five of the 73 aviation stakeholders who responded to us—including  state aviation officials, GA association representatives, and aviation  insurers—mentioned the importance of understanding the extent of the  problem—namely the number of GA aircraft owners and operators who  do not have liability insurance and the extent to which the absence of  liability insurance has precluded accident victims from receiving  compensation—as a factor that should be considered in determining  whether to adopt a liability insurance requirement. That is, the aircraft owner or pilot involved in an accident had liability  insurance; however, the liability insurance’s limit–often $100,000 per  passenger—was, according to the aviation attorneys, frequently  insufficient to compensate victims or their families in accidents involving  death or serious injury. Appendix I: Objective, Scope, and Methodology

The objectives of this report were to describe (1) existing liability  insurance requirements for general aviation (GA) aircraft owners and  operators in the United States; (2) available data on the range of  premiums charged by selected insurance providers for GA liability  insurance and factors that influence those costs; and (3) factors that  selected stakeholders stated should be considered in determining  whether to adopt a federal liability insurance requirement for GA aircraft  owners and operators. The selection of representatives from GA  trade associations was based on prior GAO reports that identified the GA  associations and recommendations from FAA, NTSB, and selected state  aviation officials. Six states—California, Connecticut, Indiana,  Massachusetts, North Dakota, and Virginia—have some type of aircraft  financial-responsibility requirements, which require GA aircraft owners to  demonstrate financial ability to cover potential losses incurred in an  accident.
Why GAO Did This Study

A substantial proportion of all domestic aviation accidents and fatalities that occur each year involve GA, which includes all aviation except commercial and military. Under federal law, the Secretary of Transportation is responsible for ensuring that commercial air carriers carry liability insurance. However, no such federal requirements exist for GA aircraft owners. In some cases, accidents involving uninsured or underinsured GA aircraft owners have occurred where individuals (passengers or third parties) who incurred losses received little or no compensation.
GAO was asked to look at the feasibility and costs associated with adopting federal liability insurance requirements for GA aircraft owners. This report examines (1) existing liability insurance requirements for GA aircraft owners, (2) premiums for GA liability insurance, and (3) factors that selected stakeholders cited which should be considered in determining whether to adopt a federal liability insurance requirement. GAO surveyed aviation officials in 50 states, analyzed state statutes identified in the surveys, collected insurance premium information from three nationwide aviation insurance brokers, and interviewed a diverse group of 73 aviation stakeholders—including FAA and NTSB officials, GA associations, and attorneys representing accident victims—selected based on GAO's prior work that identified the GA associations and recommendations from FAA, NTSB, and other aviation stakeholders.

What GAO Found

Based on GAO's 50-state survey of state aviation officials and analysis of state statutes and regulations identified by such officials, the vast majority of states do not have liability insurance requirements for general aviation (GA) aircraft owners and operators (i.e., pilots). As of April 2015, 11 states have some variation of a liability insurance requirement or aircraft financial-responsibility requirements, which require GA aircraft owners to demonstrate financial ability to cover potential losses incurred in an accident (see figure below). Minnesota is the only state that requires almost all GA aircraft owners to have a minimum liability insurance coverage: the required minimum coverage is $100,000 per passenger seat.
Annual premiums for liability insurance vary depending on the type of aircraft insured and a pilot's experience. For example, three nationwide brokers GAO contacted noted that an annual premium for a common 4-seat GA aircraft, a Cessna 172, can range from $200 to $550 for a policy that provides $1 million in coverage per accident, with a limit of $100,000 for each accident victim.
GAO interviewed 73 aviation stakeholders who most frequently cited five factors that they felt should be considered in determining whether to adopt a federal liability insurance requirement. Understanding the extent of the problem—both the number of GA aircraft owners who are uninsured and underinsured and the extent to which accident victims received little or no compensation from such owners—was one such factor. However, data on the extent of this problem are not available and, according to FAA and NTSB officials, could be challenging to collect. Four other factors cited include: (1) costs to victims and the public in the absence of liability insurance; (2) costs to the GA community if such a requirement were adopted; (3) issues related to the implementation and administration of such a requirement; and (4) the potential public-safety benefits.