Frequently Asked Questions


The Aviation Alliance Insurance Risk Retention Group (AAIRRG) is a risk retention group that provides Part 145 certified repair stations with an opportunity to take control and ownership of their liability insurance. AAIRRG will enable you to achieve long-term savings on insurance for products and completed operations and general liability (premises) insurance.

What Is a Risk Retention Group (RRG)?

A risk retention group is a homogeneous group of independent companies, joining together to form and capitalize a licensed captive insurance company. An RRG operates under the Federal Liability Risk Retention Act of 1981 (as amended in 1986) (LRRA) to write common commercial liability insurance for its members. Each insured must be an owner of the RRG, and all owners must be insured by the RRG.

Why Do We Need an Insurance Alternative?

The insurance industry views aviation as a special "high-hazard" industry. Consequently, there are few insurers (less than one percent of all U.S. insurers) who provide coverage. As a small subset of the aviation insurance market, when repair stations do find coverage, they often encounter premiums that represent an average of all aviation exposures. An examination of FAA and NTSB statistics on aviation accidents reveals that this should not be the case.

What Is the Status of AAIRRG?

On Friday, June 18, 2010, AAIRRG received its Certificate of Authority (insurance license) from the Montana Department of Insurance (MT DOI), as Montana is AAIRRG's domicile state. AAIRRG is now in its sixth year of operation and is registered in 46 states.

Is AAIRRG an A-Rated Insurance Company?

Ratings are important for most insurance companies for acceptability to those who demand evidence of insurance from you. Aviation is quite different. Those who require aircraft products insurance from you, such as Boeing, Honeywell, Garmin, Bendix, Rolls-Royce — both domestic and foreign airlines — have accepted AAIRRG's Certificate of Insurance.

What Is Reinsurance and Why Is It Needed?

Put simply, reinsurance is insurance for an insurance company. As an insurer, AAIRRG will retain exposure for a certain dollar amount of every claim, up to the first $500,000.* It then "sells off" the balance of any claims in excess of $500,000 up to the policy limits. Reinsurance companies accept this risk in return for a portion of RRG's gross premiums.

Do I Have to Be a Member of the Aeronautical Repair Station Association (ARSA) to Join AAIRRG?

The LRRA requires that all members must be from the same industry group. Therefore, your company must be a certified Part 145 repair station. We encourage you to become members of ARSA. You can visit their site or contact ARSA via email to determine what level of membership best suits your company.

*All figures cited are hypothetical and are provided to explain principals through the use of examples. Figures are not predictive of actual costs, returns, or other potential liabilities or assets.