DOES AMA LIABILITY INSURANCE COVER THIS?
Carl Maroney
This article is based upon advice from AMA General Legal Counsel to help members better understand the difficulty in answering "What if..." questions regarding insurance coverage.
The Academy regularly receives requests from chartered clubs and individual members seeking information about the insurance program. General questions about the types and amounts of coverage are routinely handled by the Special Services Department. From time to time, however, questions are posed as hypothetical situations: a brief set of facts is outlined and the asker requests an opinion on whether coverage exists.
There are several reasons why specific answers to these hypothetical questions are inappropriate:
- Providing an opinion on coverage for a particular situation almost always involves giving a legal opinion. An attorney must evaluate the particular facts; hypothetical scenarios typically lack essential detail.
- Hypothetical questions usually omit crucial information such as the experience and knowledge of the participants and spectators, frequency of the conduct, exact circumstances of the incident, and other factors that determine liability and coverage.
- Insurance law varies by state. There are different schools of thought among the states, changes in law over time, and statutory variations that can be crucial to the outcome. An answer appropriate in one state or at one time may be incorrect elsewhere or later.
- Coverage questions frequently depend on disputed facts that must be decided by a jury. Courts will not issue advisory opinions; there must be an actual controversy before a decision can be rendered.
As a result, responding to hypotheticals without an investigation (including witness statements and cross-examination) produces answers that are too speculative to be useful. Seeking formal legal advice for purely hypothetical situations has proven to be an added expense for AMA with little or no benefit.
We have also found many hypothetical queries arise from disputes among members or clubs about particular conduct. Where local disputes exist, whether or not the conduct is covered under the policy is rarely adequate to resolve personalities or local disagreements. It is AMA policy not to intervene in local differences of opinion that do not affect broader policy issues.
That said, most general insurance questions are answered without difficulty. As a basic principle, you are usually covered if your negligent conduct causes injury to another person. Model flying must be conducted in accordance with the AMA Safety Code to invoke liability coverage applicable to the member at fault. There may also be coverage under other policies (e.g., medical-pay policies that pay medical expenses without regard to fault). Basic distinctions—accident and disability coverage, property damage, and general liability—are routinely explained by the Special Services Department.
The Special Services Department is happy to clarify coverage details for members and clubs, but hypothetical situations cannot be resolved with legally binding answers; they can only be discussed in general terms based on presumed negligence.
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AMA News
How about your club? Have you improved your flying field or landscape? If so, you may qualify for the Take Pride in America contest. Start getting documentation together for 1991. It costs nothing to enter; the rewards and local publicity can be valuable. Call your local TPIA office or contact AMA Headquarters for assistance locating the number.
Model aviation and safety are often linked by those we approach for flying sites. Safety concerns (often second only to noise) are commonly raised by those who would like to close a flying site. If you've faced such disputes, you understand the importance of having facts and data.
The U.S. Consumer Product Safety Commission annual report lists many causes of accidental death for children, including bicycle accidents, drownings, and ATV incidents. Model aviation, however, is not singled out as a cause of child fatalities in that report; model aviation-related accidents are infrequent and often lumped into a catch-all category.
When defending model aviation against claims of being unsafe, use documented facts. Opposition can sometimes be based on anecdote rather than documented incidents. If you have reliable data, your case becomes far more credible.
More next month.
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PRESIDENT'S CORNER
By Don Lowe 902 Little Bend Rd., Altamonte Springs, FL 32714
A Look Back
Since taking on the presidency about five years ago, I've seen a lot happen. It has been busy and, for the most part, rewarding. There are times when the unpleasant aspects of the job make me ask why I accepted it, but then something positive happens and it feels worthwhile. Only you members can judge whether I have made a contribution; all I can say is that I have tried.
Aeromodeling continues to grow worldwide. Technological evolution and novel flying machines are exciting. As someone from a technology background, I am gratified by aeromodeling's contributions to aerospace—especially small unmanned aerial vehicles used in the Gulf War.
Modelers are generally absorbed in a fascinating hobby. Most dissension appears in organized aspects of the activity. AMA strives for acceptable compromises across insurance, Nationals organization, aid for flying sites, magazine content, relations with regulatory bodies (FAA, FCC), frequency allocation, and more. The goal is to provide the best service to the most modelers within our resources.
Many years ago I was an AMA outsider focused on Pattern flying and believed the Academy did not serve my needs. I eventually joined the organization and served as VP for District 3; now I am President. I've found a hard-working, conscientious group promoting aeromodeling. My conclusion: aeromodeling needs one strong, responsive parent association rather than fragmentation into splinter groups. We must ensure AMA stays responsive to members' needs.
Insurance is an important benefit many modelers associate with AMA, but AMA is much more than insurance. Since 1936 we've promoted aeromodeling and provided a single voice to organizations such as NAA, FAI, FAA, FCC, and legislative bodies. We work to make the public aware of our hobby and defend the need for flying sites.
We try to help clubs obtain and maintain flying sites. Call AMA Headquarters if your club has a problem; you may be surprised how helpful we can be. While we probably cannot buy a site for each club, we are seeking ways to provide more direct financial help and partnerships between local clubs and the national body.
A Look Ahead
Aeromodeling will continue to grow. We have only begun exploring RC technologies such as flight stabilizers, flight data systems, and video systems. Ideas such as aerobatic events flown by video and systems that simplify training are already feasible or emerging.
As AMA grows organizationally, we plan to expand direct support to modelers—technical symposia, training programs, and varied events at our national facility in Indiana. We're also exploring partnership property acquisitions in areas of need.
Competition remains strong: there are currently seven World Champions in the United States. Competition stimulates technological development and provides tangible benefits to hobbyists.
Council and Headquarters are considering restructuring to protect resources from litigation and provide more professional management. Freed from such concerns, Council hopes to focus more on making model flying fun.
We strive to make AMA responsive. Council meetings reserve time to discuss new initiatives; any AMA member is invited to attend. The next meeting will be in Pasadena, California, on January 10, 1992—an opportunity for District 10 members to meet Council.
Thought of the month: Most of what you really need to know is contained in the fine print!
Till next month.
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AMA News — Real Property and National Flying Site
As a follow-up to last month's column, here are additional details about AMA, real property, and the national flying site program.
AMA is a non-profit corporation under IRC section 501(c)(7). Non-profit status permits AMA to generate income, but those funds must be used for the common good—promotion and protection of aeromodeling—and benefits must be available broadly (not just to members). AMA's mission is to promote and protect model flying.
At this writing, AMA's assets total approximately $10 million. The Board of Directors is responsible for safeguarding those assets and using them in line with the mission. One prioritized use of assets is the acquisition and development of flying sites.
National Flying Site — Muncie, Indiana
- AMA purchased 962 acres near Muncie, Indiana, converting agricultural land to model use as a showcase for aeromodeling.
- Construction contract: $1.7 million in improvements (in addition to the $1.5 million purchase price). Improvements include a 25,000 sq. ft. building primarily for a museum and multi-use flying sites capable of accommodating most modeling activities (float flying, Pattern, Scale, Control Line, Free Flight, etc.).
- The site will provide working drawings, videos, and financial statements on construction costs and tourism/convention income from events.
- AMA also plans to develop smaller regional 100–200 acre flying sites around the country to serve as regional centers and examples for clubs and government agencies.
Tentative development schedule (subject to Council review and funding):
- 1993: Control Line Speed facility; grading for Control Line racing site.
- 1994: Racing site and road network to two Pattern sites (north section).
- 1995: Completion of the two northern Pattern sites and Pavilion addition to the multi-purpose site.
- 1996: Road continuation to remaining Control Line areas; overflow parking improvements.
- 1997: Paving remaining Control Line sites; development of float site.
- 1998: Construction of pavilions at Soaring and Pattern sites.
- 1999: Completion of third southern Pattern site.
- 2000: Completion of car and boat sites; additional clearing, barn conversions, and campsite development as funds permit.
Fundraising for additional improvements is planned to begin in June 1992.
California Regional Site
- AMA is pursuing a 154-acre property in California proposed by a consortium of more than 15 AMA charter clubs. The proposal includes a management and development plan whereby local modelers would operate and develop the property if AMA purchases it.
- The Executive Council is likely to approve such a proposal if it secures member-based management and development.
Other Notes on Property and Headquarters
- AMA purchased 1.625 acres in Reston, Virginia, and constructed Headquarters (occupied February 1983). Debt on that building is expected to be paid off by July 1, 1992.
- The Headquarters property has been used in the past as an asset underlying the insurance program.
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AMA Insurance — Financial Overview (summary)
- AMA self-funds the first $1 million of liability claims (self-funded/self-insurance), backed by approximately $10 million in total assets.
- Excess insurance of $25 million is purchased to protect AMA beyond the first $1 million.
- AMA deposits funds and issues an irrevocable letter of credit to guarantee available funds to the insurer while retaining control over the assets.
- AMA maintains approximately $4 million designated as insurance reserves and about $2.5 million in cash available to pay claims.
- The cash reserve backing the $1 million self-funded layer is intended to cover:
- $1,000,000 for the current year's policy,
- $500,000 reserved for outstanding or potential past claims,
- $1,000,000 to place a new policy immediately if a large claim exhausts the first layer.
- Claims handling is managed by Alexsis, part of Alexander & Alexander (an insurance brokerage firm).
- AMA also offers members:
- An umbrella-type policy providing up to $25,000 for certain injuries while building or flying models.
- Coverage options that address theft and vandalism of model aircraft and related items.
- AMA's insurance for members is typically secondary (primary for many clubs and site owners). The policy can provide primary coverage for site owners who cannot accept the risk of their own insurance increasing.
Fact points:
- AMA is a 501(c)(7) non-profit; employees are paid reasonable salaries. Officers do not receive a salary but may receive an expense allowance.
- AMA is financially sound with conservative management and has shown small surpluses in recent years.
- AMA's self-insurance is a real insurance program issued by a rated insurance company and backed by AMA funds and letters of credit.
- AMA is actively working to ensure insurance availability continues into the future.
- Insurance benefits include liability, medical-pay/accident coverage, and limited theft/vandalism protections.
- AMA is more than insurance—it supports and promotes aeromodeling broadly.
Thought of the month: Most of what you really need to know is contained in the fine print.
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Upcoming Events, Announcements, and Recognition
- Grand Opening of the first national flying site in Muncie, Indiana: June 13–14, 1992. Events planned include manufacturers on-site, air shows, swap shops, door prizes, raffles, and a Saturday barbecue for members.
- Fundraising efforts to support additional improvements at the Muncie site will begin in June 1992.
- Nationals sites for 1993: No site confirmed at AMA Headquarters at this time. Clubs or groups interested in hosting national championships should contact AMA HQ.
- Regional IMAA Fly-In at the Muncie facility next June; National Free Flight Society requested the site for a 4A Free Flight contest on Labor Day Weekend (September 4–7).
- New printing contract for Model Aviation magazine will save AMA approximately $500,000 over three years.
- AMA negotiates all contracts (printing, insurance, equipment maintenance) to provide the best value and preserve member benefits. Current cost of members' insurance benefit is less than $10 per member.
Congratulations:
- Howard Crispin (VP District IV) received the AMA Technical Award for compiling the new publication Sound and Model Aeronautics.
- U.S. World Champions (1990–91 cycle): James Richmond (F1C, 1990), Carl Dodge (F2A, 1990), Mike Keller (F1C Junior World Champion, 1990), Randy Archer (F1C, 1990), Chip Hyde (F3A, 1991), Joe Wertz (F3B, 1991), Dub Jett (F3D, 1991)—seven world champions from the United States during the last FAI cycle.
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DISTRICT REPORT — John Byrne (District 11 Vice‑President)
36‑29 213 Street, Bayside, NY 11361 (718) 225‑8319
Associate Vice Presidents:
- Pete Bianchi, 250 S. Broadway, Yonkers, NY 10705
- Tom Brown, PO Box 4333, APO NY 09099
- George Buco, 11 Maple Ln., Hyde Park, NY 12538
- Frank Costello, 27 Keenan St., Dover, NJ 07801
- Frank Dresp, 9 Willow Ave., Piscataway, NJ 08854
- John Griggs, 6387 Badger Dr., Lockport, NY 14094
- Ray Juszkiewicz, 7 Evergreen Ave., New Hyde Park, NY 11040
- Kenneth Kuczek, 181 E. Union St., Rochester, NY 14606
- George Myers, 70 Powell Farm Rd., Hicksville, NY 11801
- Adam Saffar, 41 Perry Ave., Latham, NY 12110
Safety Coordinator:
- Lou Sturley, 2062 Rabbit Lane, Phoenix, NY 13135
Second (District) Thoughts:
- Election for the new District 2 vice‑president will be announced after November 15; the new VP's first District 2 report will appear in the March 1992 issue.
- Note on transmitter stickers for sanctioned events: CDs (Contest Directors) must verify a gold R/C AMA sticker on transmitters. Some stickers printed overseas may fade; some systems (e.g., ham-band transmitters on 50 MHz) do not require the sticker. Plug-in modules may carry the sticker internally—use judgment and request written verification if necessary.
Rhinbeck Jamboree:
- At the Twenty‑Fifth Annual Rhinebeck Jamboree (Cole Palen's Old Rhinebeck Aerodrome), AMA honored Cole Palen with a Distinguished Service plaque. AMA also awarded a Superior Service Award to George Buso for his decades of involvement with the Rhinebeck exhibitions.
Model Aircraft Symposium:
- Syracuse, New York: January 25 at the New York State Fairgrounds. Theme: "Pearl Harbor to Desert Storm—Fifty Years of American Aviation Excellence." Displays, live RC demonstrations, swap shop, and guest speakers. Contact Walter Throne (315-453-2291) or Richard Snyder (315-465-4113) for information.
Local Club News:
- Tour-Ed Mine Remote Control Club received positive newspaper coverage that boosted membership interest.
- Fall RC Festival in Shelby, Ohio: 32 fliers attended; notable aircraft included Joe Rusyniak's MiG 15 and Chuck Heyman's Phaeton 90.
- Increased interest in RC-assisted Free Flight events; Toledo Weak Signals SAM contest drew 21 entries with 48 models.
Sanction Forms:
- District I Contest Coordinator Bob Wilkie requests sanction forms be filled out completely (both sides) to avoid processing delays. Submit sanction requests early for best selection of dates.
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DISTRICT REPORT — Jim McNeill
- Recognition for Burris Fields, District V Frequency Coordinator, for handling shipping and scheduling of scanning equipment.
- Benton County Model Aircraft Club (Camden, TN) received charter #3143; organizer Al Spampinani is thanked for his efforts.
- RAMM club (Radio Aero Modelers of Montgomery) has an excellent all-grass private field.
- Emerald Coast Giant Scalers held a successful Second Annual Labor Day Giant Scale Fly-In in Panama City; J. Corey was Contest Director.
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DISTRICT REPORT — John (miscellaneous photos & swap shop notes)
- Photo highlights from giant scale meets and individual flyers (B-25 by Mike Stratsky, Jerry Rakowski with his biplane, Norbert Martyn and his Islander, Stan Vana with Omni Ultimate).
- Swap shop season in pause until the new year; RCHTA Show in Chicago noted for high attendance and heavy colds among exhibitors.
- Congratulations to Dave Van Dinschoten on third place at the World F3A Championships in Australia; Aero Flint club contributed $500 to assist.
- Reminder: Contest Directors should avoid flying in the events they are CDing to prevent conflicts of interest.
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DISTRICT REPORT — Travis McGinnis (District IX Vice‑President)
8027 W. 81st Circle, Arvada, CO 80005 (303) 420‑1670 CompuServe: 76067,2750
- This column marks the end of the author’s tenure as District IX VP; new VP elected by the time this appears.
- Personal notes: family additions (grandchildren Heidi Brooke and Avery Michelle).
- Excerpts from past columns: "The Geometry of AMA"—illustrating the relationship between AMA Headquarters (staff), the Executive Council (volunteers), and the membership/clubs, with goals linking all three sides.
- Reflections on leadership: time perspective and matching leaders to appropriate responsibilities; leadership/fellowship relationships build participation and success.
- Events: Visalia Soaring Festival attracts large participation—recommendation to reserve early. District flight site planning (potential Visalia purchase) under consideration.
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DISTRICT REPORT — Ed McCollough (District XI Vice‑President)
P.O. Box 13677, Portland, OR 97213 (503) 244‑4439 CompuServe: 76067.24222
Associate Vice Presidents:
- Darrell Anderson, Great Falls, MT
- Tom Cashman, Federal Way, WA
- Al Culver, Wilder, ID
- Jerry Holcomb, Vancouver, WA
- Tom McCown, Anchorage, AK
- Dave Mullens, Seattle, WA
- Bruce Nelson, Spokane, WA
- Dick Wickline, Kamiah, ID
- Chris Young, Sumner, WA
Assistant Frequency Coordinator:
- Al Watson, Bellevue, WA
Notes:
- District activities include Polar Bear fly-ins, Puyallup show (Feb 1–2), and annual district scheduling meetings.
- Farragut State Park Scalemasters Qualifier in June is a notable event; Farragut is a family-friendly park on Lake Pend Oreille.
- Pictures and reports from recent contests included: Fun Scale Corsair, PT-17, and Rogue Eagles Prestige Aerobatic meet with significant prizes awarded.
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DISTRICT REPORT — Miscellaneous (final insurance reminder)
Members are reminded that hypothetical insurance questions are difficult to answer definitively. Coverage generally applies when negligent conduct causes injury to another person and model flying was conducted in accordance with the AMA Safety Code. Misunderstandings frequently arise regarding Safety Code compliance and its impact on coverage.
If you have specific insurance questions regarding real incidents, contact the Special Services Department for assistance. For hypothetical scenarios, expect only general guidance, not legally binding opinions.
Transcribed from original scans by AI. Minor OCR errors may remain.
