AMA—MAAC Reciprocal Insurance Agreement

by Dave Mathewson, AMA President

Over the last several weeks, there has been some confusion regarding the reciprocal liability insurance agreement between the Academy of Model Aeronautics and the Model Aeronautics Association of Canada. I’d like to explain the history of that agreement, how it works, and try to clear up any misunderstanding that may have resulted from the actions of the past few days.

Several years ago, AMA, and MAAC discussed ways in which each of our members could participate in events of the other organization without having to join both organizations. Obviously, more so than any other country, this is a significant issue since there is so much crossover between Canada and the United States.

Although not the case today, back when the first agreement was drafted, both AMA and MAAC had the same insurance carrier. As a result, with the carrier’s concurrence, the simple solution was to add language to both policies that would provide coverage to each organization’s members while flying in the other’s country. In other words, AMA covers AMA members while flying in Canada and MAAC covers MAAC members while flying in the United States. This agreement has worked flawlessly for a number of years.

On March 21, 2009, MAAC posted an “urgent message” on its Web site regarding changes to the insurance protection it provided its members. The notice on the MAAC Web site quotes the following language from its liability policy:

The following is added to Section 11- WHO IS AN INSURED -as item 2. (e):

The Named Insured’s members and affiliate members in good standing of the Model Aeronautics Association of Canada, but only while engaging in the operation of model aircrafts, model watercrafts, model vehicles or model rockets at events and activities organized by the named Insured. The notice then goes on to say: “This means that ‘individual’ or ‘casual’ members operating models when essentially ‘unorganized’ at a park, a school yard, their home property, someone else’s property, or at a pond or lake, are not covered by MAAC insurance. We have sought coverage extensions without success so far and our broker has advised us that this is unlikely to change in any major way.”

Finally, the notice summarizes its position by stating, “The current liability insurance provided by MAAC is not intended to cover the modeling activities of members when they are ‘on their own,’ such as the operation of models in their back yard, on someone else’s property, in a park, at a school yard, or lake. In other words, whenever the activity is not MAAC or club organized.”

One of our members brought this notice to AMA’s attention on March 23, 2009, and we immediately contacted MAAC for a clarification. Our concern was that the language in the added section limited coverage for MAAC members only while engaging in the operation of model aircrafts, model watercrafts, model vehicles, or model rockets at events and activities organized by the Named Insured. AMA is not a named insured on the MAAC policy nor is MAAC a named insured on the AMA policy. Nor should either be. So, in essence, with this added language it appeared that MAAC was no longer able to provide liability protection for its members while flying in the United States, therefore rendering the reciprocal agreement void. To its credit, the MAAC president and chair of the MAAC Insurance Committee have worked tirelessly to try to resolve this issue with its insurance carrier.

In the meantime, AMA determined that this was a relatively low-risk situation and wanted to give MAAC as much time as possible to resolve its problem with its insurance carrier. At the April 25, 2009, AMA Executive Council meeting—more than a month since the issue was first brought to our attention—the situation was discussed at length. AMA’s Insurance Committee had developed a “Plan B” in case MAAC couldn’t get this resolved. This plan was approved by the EC.

Among other things it included dissolving the reciprocal agreement and requiring that MAAC members would now have to join AMA as affiliates to fly at AMA chartered club fields and at AMA sanctioned events.

With the flying season underway and several major events scheduled for May, including SEFF, Top Gun, and Joe Nall, AMA felt that it could wait no longer than Wednesday morning April 29, to make a decision. Since SEFF began on April 30, we were already concerned that a change in policy would mean extra work for the SEFF management team. However, we couldn’t control what was happening between MAAC and its insurance carrier. Our plan was to call the SEFF CD on Wednesday morning, inform him of the problem, and make available AMA support from Headquarters if he felt they needed it.

The notice of our proposed plan was made known on Tuesday morning, April 28, as there was no resolution yet. As it seems to so often happen, later that day, around six in the evening, I received a call from the MAAC president indicating that they had finally received word from their carrier that MAAC’s liability coverage did extend to MAAC members when flying at AMA chartered club fields or at AMA events.

So, as of April 29, the reciprocal agreement between MAAC and Canada is in effect pending written confirmation to MAAC from its carrier. If any of this changes, and there is no reason at the moment to think it will, we will notify by e-mail all club contacts as well as all of our CD’s. Q