Aircraft Insurance Requirements by State: Only Minnesota Mandates It

Quick Answer: Is Aircraft Insurance Required?

No federal rule requires a private aircraft owner to carry liability insurance. The FAA certifies pilots and aircraft; it does not require either to be insured. Federal insurance minimums in 14 CFR Part 205 apply to air carriers and air taxi operators, not to an owner flying their own plane.

The requirements that do exist are state law, and they come in four very different shapes. Only one state, Minnesota, requires essentially every aircraft owner to carry liability insurance as a standing condition.

This eleven-state map comes from the Government Accountability Office's 2015 survey (GAO-15-740). Each state's current statute was re-read for this guide, and one of them — Indiana — no longer says what the GAO table says.

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Minnesota: the Only True Mandate

Minnesota Statutes § 360.59, subdivision 10, requires every owner, when registering, re-registering or transferring an aircraft in the state, to supply proof of insurance showing the aircraft is covered by a policy with limits of at least:

The per-seat formula means the requirement scales with the aircraft: every added passenger seat adds another $100,000 of required passenger coverage, so a six-seat twin needs considerably more than a two-seat trainer.

Minnesota backs this with a criminal provision. Under § 360.92 it is a misdemeanor for an owner to operate, or allow to be operated, an aircraft registered or based in Minnesota without liability insurance protecting passengers and third parties. Registration can be revoked if the coverage lapses.

The statute carves out experimental aircraft that are barred from carrying passengers (from the passenger-seat coverage only), unmanned aircraft, and pre-1940 collector aircraft registered by affidavit. Small drones need only proof of insurability.

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Virginia: No Registration Without Proof

Virginia does not phrase its rule as an operating mandate, but the effect is close. Under Va. Code § 5.1-88.1, the Department of Aviation will not register an aircraft — other than a public aircraft or a balloon — until the applicant furnishes proof of financial responsibility. Section 5.1-88.2 sets the amounts, with four ways to meet them:

• a policy of $50,000 / $100,000 / $25,000 (bodily injury per person, per accident, property damage), including passenger liability; or
• a single-limit policy of $250,000 including passenger liability of $50,000 per passenger seat; or
• a bond in those amounts; or
• $250,000 in cash or a letter of credit.

An owner who chooses a surety bond instead of a policy is bonded rather than insured: the surety pays a valid claim and can then recover what it paid from the owner.

Ultralights registered with the Department need a $100,000 single limit. Registration applies to Virginia residents who own civil aircraft and to non-residents whose aircraft are based in Virginia for more than 90 days in a 12-month period, among others.

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Maryland: Only When the Aircraft Earns Money

Maryland Transportation Article § 5-1002 requires a liability policy covering the owner and pilot on any aircraft based or hangared in Maryland — but "operate" is defined as a use that involves remuneration to the owner, including leasing, rental and instructional use.

So a Maryland owner who flies only for personal use is outside the requirement; the same owner leasing the aircraft to a flight school or flying club is inside it. Violations fall under Maryland's general aviation penalty, a misdemeanor punishable by a fine of up to $500, up to 90 days, or both (§ 5-1105).

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The After-Accident States

California, Connecticut, Indiana and Massachusetts apply the same logic older auto financial-responsibility laws used: nobody has to insure in advance, but after a reportable accident the owner must post security for the damage — unless an aircraft liability policy was already in force, in which case the security requirement falls away. In practice, insurance is the way owners avoid the post-accident process.

California adds one rule with no counterpart elsewhere: anyone who rents out an aircraft for compensation must tell the renter in writing whether the aircraft is insured (§ 24362).

Indiana's figures moved, and the reference tables did not

The GAO's 2015 table lists Indiana at $10,000 / $20,000 / $20,000, with an accident becoming reportable at $100 of property damage. The current Indiana Aircraft Financial Responsibility Act sets proof of financial responsibility at $100,000 / $200,000 / $100,000 and raises the reporting threshold to $7,500. Indiana's own 2013 code still carried the old figures, so the change came after the GAO survey. Any state-by-state table built from the GAO figures understates Indiana's limits tenfold.

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Airport-Tenancy Rules

Three states impose insurance through the airport rather than through the aircraft.

• Hawaii requires holders of small-plane hangar or tie-down permits at state airports to carry $500,000 of general liability insurance for the life of the permit (Haw. Admin. R. § 19-17.1-8). Commercial tour aircraft operators must meet the same limits the FAA sets for Part 135 air taxi operators (§ 19-34-6).
• Oregon requires lessees at state-owned airports to carry "the types of insurance specified in the lease, in the amounts specified" (OAR 738-015-0040). The rule sets no dollar figure; the lease does.
• Rhode Island has no statute. Insurance is a term of the Rhode Island Airport Corporation's tie-down agreements at state airports; the agreement's current limit could not be confirmed from a published source.

For owners based at a privately owned airport, the airport's own hangar or tie-down contract often does the same job, and is the requirement most owners actually encounter.

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North Dakota's Unusual Rule

North Dakota Century Code § 26.1-48-05 requires the owner of an aircraft or aircraft component manufactured in North Dakota to provide proof of financial responsibility of $100,000 per occurrence for property damage and injury or death on the ground. It is tied to the state's aircraft aftermarket risk contract law, and it follows the manufacturing location rather than where the aircraft is based.

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What Federal Rules Do Cover

Part 205 minimums apply to direct air carriers, commuter carriers and air taxi operators. For an air taxi, 14 CFR § 205.5(c) requires third-party coverage of $75,000 per person and $300,000 per aircraft per occurrence for bodily injury, $100,000 for property damage, and passenger coverage of $75,000 multiplied by 75% of the installed passenger seats. Those figures matter to a private owner only if the aircraft moves into commercial service — and they are the benchmark Hawaii borrows for tour operators.

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Frequently Asked Questions

Does the FAA require aircraft insurance?

No. The FAA does not require private aircraft owners or pilots to carry liability or hull insurance. Federal insurance minimums in 14 CFR Part 205 apply to air carriers and air taxi operators.

Which state requires insurance for every aircraft?

Minnesota. Minn. Stat. § 360.59 requires coverage of $100,000 per passenger seat, $100,000 per non-passenger and $300,000 per occurrence as a condition of registering an aircraft, and operating without it is a misdemeanor.

Is insurance required to register an aircraft in Virginia?

Yes, in the sense that the Department of Aviation will not register an aircraft without proof of financial responsibility. That proof can be a policy, a bond, or $250,000 in cash or a letter of credit.

Do I need insurance to rent my aircraft to a flight school in Maryland?

Yes. Maryland requires a liability policy of $50,000 / $100,000 / $50,000 on aircraft based or hangared in the state when the use earns the owner money, which includes leasing, rental and instruction.

What is an aircraft financial responsibility law?

A law that does not require insurance in advance, but requires an owner involved in a reportable accident to post security for the damage or face suspension. California, Connecticut, Indiana and Massachusetts use this model, and an owner who was already insured is excused from posting security.

Are these the only places an owner can be required to insure?

No. Lenders financing an aircraft routinely require hull and liability coverage, and airport hangar and tie-down agreements — public or private — commonly require liability insurance. Those are contractual requirements rather than state law.

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Key Takeaways

• No federal insurance requirement applies to private aircraft owners; Part 205 covers carriers and air taxis.
• Minnesota is the only standing mandate: $100,000 per passenger seat, $100,000 per non-passenger, $300,000 per occurrence.
• Virginia requires proof of financial responsibility to register; Maryland requires insurance only when the aircraft earns money.
• California, Connecticut, Indiana and Massachusetts require security after an accident, not insurance before one.
• Indiana's figures rose to $100,000 / $200,000 / $100,000 after the 2015 GAO survey, so tables copied from it are ten times too low.
• Hawaii, Oregon and Rhode Island apply insurance through state-airport hangar, tie-down and lease terms.

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Sources

• U.S. Government Accountability Office — GAO-15-740, General Aviation: Observations Related to Liability Insurance Requirements and Coverage for Aircraft Owners (2015)
• Minn. Stat. §§ 360.59 and 360.92 — Minnesota Revisor of Statutes
• Va. Code §§ 5.1-88.1 and 5.1-88.2
• Md. Code, Transportation §§ 5-1002 and 5-1105
• Cal. Pub. Util. Code §§ 24230–24410 (Uniform Aircraft Financial Responsibility Act)
• Conn. Gen. Stat. §§ 15-102 to 15-120
• Ind. Code 8-21-3 (Indiana Aircraft Financial Responsibility Act)
• Mass. G.L. c. 90 §§ 49B–49R
• Haw. Admin. R. §§ 19-17.1-8 and 19-34-6
• Or. Admin. R. 738-015-0040
• N.D. Cent. Code § 26.1-48-05
• 14 CFR §§ 205.2 and 205.5

Last verified: 2026-09

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Important Disclaimer

This guide provides general information about insurance requirements based on publicly available sources as of the "Last verified" date above. It is not legal, insurance, or financial advice. Requirements, penalties, and statutes can change; individual circumstances vary. Always confirm current rules with your state's Department of Insurance or DMV, and consult a licensed insurance professional for advice specific to your situation.