A federal court in Tennessee granted summary judgment to an insurer as it found coverage was not owed under an aircraft policy for the theft of avionic equipment from a covered aircraft where the theft was not discovered or noticed for three years after the loss. United States Specialty Ins. Co. v. N602DW, LLC, 2017 WL 4467481 (M.D. Tenn. Oct. 5, 2017).
An aircraft owner had an aircraft policy under which the insured was required to provide notice of a loss within 90 days of the loss and to protect damaged property to prevent further loss. The insured aircraft experienced engine failure on landing. The owner left the plane on the ramp. After initially returning to the plane to remove the defective engine, the owner did not return to check on the aircraft for four years. At some point during the time the aircraft was left unattended, someone stole electronic parts, which theft was not discovered until later. After learning of the theft, the owner filed a claim under the policy. The insurer denied coverage, and in ensuing coverage litigation moved for summary judgment on the bases that the owner failed to notify the insurer of the loss within 90 days from the loss and further failed to protect the aircraft from additional damage by leaving it unattended. The owner asserted that notice was timely because he provided notice within 90 days of discovery.
The court found that the owner breached the notice requirement and that the owner’s delay in discovering the theft for three years resulted in prejudice to the insurer. The court also noted that it would grant summary judgment to the insurer on the alternative ground that the owner did not protect the aircraft after the accident in violation of the policy’s provisions.