What is the process of valuing damage after your aircraft has been involved in an accident?

Initial Assessment

• On-Site Inspection: Investigators and adjusters perform a detailed visual examination of the aircraft, documenting visible damage through photographs and reports.
• Data Collection: Black boxes (Flight Data Recorder and Cockpit Voice Recorder) and maintenance logs are analyzed to understand the events leading to the accident.
• Damage Classification: The damage is categorized into:
  • Minor Damage: Easily repairable without major component replacement.
  • Major Damage: Significant structural or system damage requiring extensive repairs.
  • Total Loss: The aircraft is considered beyond economical repair.

Determining Repair Costs

• Repair Estimate: Aviation engineers and maintenance providers estimate the cost of repairing the damage, including parts, labor, and specialized equipment.
• Material and Component Assessment: Non-destructive testing (NDT) or destructive testing is performed on key parts to evaluate their integrity.
• Component Replacement: If structural components like wings, fuselage, or engines are damaged, the replacement cost is factored in.
• Logistics and Labor: Transportation, specialized repair facilities, and certified personnel availability are considered.

Evaluating Aircraft Value

• Pre-Accident Value: Appraisers calculate the market value of the aircraft before the accident using:
  • Aircraft make, model, and year
  • Flight hours and cycles
  • Maintenance and repair history
  • Current market conditions
• Diminished Value: Even after repairs, aircraft may suffer from “stigma damage,” reducing resale value due to its accident history.
• Depreciation: An older aircraft may be valued lower compared to a newer model with similar damage.

Determining a Total Loss

• Economic Repairability: If repair costs exceed approximately 70-80% of the aircraft’s pre-accident value, insurers may declare a total loss.
• Salvage Value: The remaining usable parts or scrap value is estimated and deducted from the payout.
• Settlement Negotiation: The insurer and aircraft owner may negotiate the final payout, balancing repair costs and salvage value.

Insurance and Legal Considerations

• Policy Review: The insurance policy is closely reviewed to determine coverage limits, exclusions, and deductible amounts.
• Third-Party Liability: If third-party damage or injuries occurred, additional claims may be processed.
• Legal Compliance: Aviation authorities may require compliance reports and certifications before returning the aircraft to service.