Let's say you're a CFII and you are giving instrument training in your student's airplane, for which they are rated. In order to give your student some actual IMC experience, you file an IFR flight plan and the student flies in IFR conditions with you in the right seat.
14 CFR § 61.3(e) says:
No person may act as pilot in command of a civil aircraft under IFR or in weather conditions less than the minimums prescribed for VFR flight unless that person holds: (1) The appropriate aircraft category, class, tupe (if required), and instrument rating on that person's pilot certificate for any airplane, helicopter, or powered-lift beinf flown. . . .
Okay, so the instrument student cannot act as PIC for that flight, right? Presumably, the CFII will act as PIC. So what if the insurance policy on the student's airplane requires something specific before another pilot can be pilot in command, such as a checkout or minimum hours in make/model, etc.?
I know CFIIs take their students in IMC all the time, so.... insurance be damned or what? Do you get added to the insurance of every student that owns his/her own plane? Does your instructor's insurance cover the airframe if there's an accident?