Two similar looking aircraft positioned next to one another can be identical in every single way but for a history of damage. The aircraft with minimal or no damage will yield a higher price. The difference in value between two such aircraft is known as the diminution in value. Yet merely appraising aircraft to determine its true value and the level of diminution in value is not enough in and of itself. The timing of the appraisal is of the utmost importance. It is important to have this appraisal performed as quickly as possible.
Why Early Appraisal Is So Important
If you were to poll professional aircraft appraisers about the timing of appraisals, they would recommend that you have your aircraft appraised sooner rather than later. Aircraft owners, prospective aircraft buyers and attorneys representing clients who own aircraft, regularly reach out to appraisers for quotes. In many instances, attorneys reach out to appraisers on behalf of clients who own a damaged aircraft that might involve a corresponding diminution in value claim. Unfortunately, the individuals who make such inquiries often drag their feet and reach out for the appraisal at the last minute.
Those who wait until the last moment to have an aircraft appraised run the risk that the aircraft won’t be appraised at the appropriate time. In many instances, by the time the aircraft appraisal professional is contacted, the aircraft has already been transported to a maintenance facility. In some instances, the aircraft is already undergoing the required repairs. In a handful of situations, the aircraft in question has already been fully repaired and in airworthy condition. In such instances, the insurance company will have either agreed to pay the repair costs or already paid such costs in accordance with the insured party’s policy. Yet the vast majority of insurance policies provided for aircraft hull damage usually do not provide coverage for an associated diminution in value. The aircraft owner must secure such coverage through a separate insurance policy.
The problem arises when the owner of the aircraft realizes he will not be fully reimbursed for the diminution in value his plane has endured. This is precisely why so many aircraft owners secure legal counsel. They believe an attorney will help them explore the many options for financial recovery and pinpoint the best course of action. The entire problem could have been avoided had the insured party had the aircraft appraised at the beginning of the process. It also helps to obtain separate insurance for diminution in value.
Consider the Current Sales Market for the Aircraft
If the current sales market for an aircraft is especially strong with plenty of buyers and sellers, there should be a sense of urgency in having the appraisal performed. A professional determination of the aircraft’s true value will get the ball rolling on the sale. Have the plane appraised, take advantage of the hot market and it might not even matter if the aircraft has a history of specific types of damage. Plenty of buyers are willing to overlook such flaws in relation to value if the aircraft is in high-demand.