A  hypothetical but realistic scenario:

A passenger was injured in a recent crash due to my negligence. He's suing for $1 million, but his injuries were only $125,000. Either way, the car, home, bank accounts and much of my future earnings are at risk. Got your attention now?

I hope so. It could happen to you.

Many who call me about insurance ask what coverages they need. Foremost is Third Party Liability coverage. Party number one is the person who buys the coverage. Number two is the insurance company who contracts to defend party number one should he be justly or unjustly sued, and pays up to the limits on the policy should the judge so order. Third parties are those injured, killed or who's property was damaged or destroyed. Without third party liability coverage you may have to pay the third party out of your own pocket.

Another case: The landing was perfect...but the gear was up! How common, and how embarrassing. In this accident no one but the pilot incurred property damage or bodily injury. Third party liability coverage will not protect in this instance. Only physical damage coverage for the airplane will repair the prop, engine and fuselage. This is commonly called "hull" coverage.

Hull coverage is often sold with deductibles, like auto insurance. It can be most handy if it saves $25,000 or so out of your pocket to repair your airplane. It might even help keep peace in the family if the bank account remains in tact.

Now, take Medical Coverage--please! Some claims adjusters I know say this coverage has helped avoid many law suits. Medical pays for minor injuries regardless of fault, and there is no deductible.

Suppose that, in an excited state, you close the door on your passenger's hand, causing a trip to the emergency room and five stitches at a cost of $1,000. Now your friend (ex-friend) is thinking of suing. A suit may be avoided if the adjuster can pay the loss out of the medical coverage thereby avoiding lost work time for court appearances and further embarrassment. Many carriers include $1,000 medical for no charge, in some cases up to $3,000 per occupant including the crew for no charge. If a small premium charge, say $20 to $50 per year, is made its well worth it.

Aircraft accidents are painful, almost unbearable, if someone is hurt or killed due to your negligence. Sometimes the only comfort you may have is knowing the injured parties are compensated for their loss and your family's security is not jeopardized in the process.