Scud running
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In general aviation, scud running is a practice in which pilots lower their altitude in order to avoid clouds or Instrument meteorological conditions (IMC). The goal of scud running is to stay clear of weather in order to continue flying with visual, rather than instrument, references. This practice is widely accepted to be dangerous, and has led to death in many cases from pilots flying into radio towers and high tension wires; however, even instrument-rated pilots sometimes elect to take the risk to avoid icing or embedded thunderstorms in cloud, or in situations where the minimum instrument altitudes are too high for their aircraft.
Scud running is occasionally referred to as "maintaining visual contact with the ground while avoiding physical contact with it" or "if the weather's too bad to go IFR, we'll go VFR."
The term gets its name from "scud," which is used to describe low, detached clouds.
[edit] US regulations
In the United States, most controlled airspace below 10,000 ft. Mean Sea level (MSL) requires a pilot flying under visual flight rules (VFR) to remain 500 ft. below a cloud ceiling and to maintain 3 statute miles visibility. However, outside of airport control zones and major terminal areas, controlled airspace typically begins at 1,200 feet above ground level; below that is uncontrolled (class G) airspace, where (at that altitude) a pilot is required only to remain clear of clouds and to maintain one statute mile visibility. It's also necessary to maintain an altitude of at least 1,000 feet above congested areas, and 500 feet above any person, vessel, vehicle, or structure.
[edit] Canadian regulations
In Canada, the visibility and altitude requirements are similar to those in the U.S., but most controlled airspace outside of terminal areas bottoms out at 2,200 feet AGL, so there is more room to scud run legally. In northern Canada, there is little controlled airspace at all, below the high-level class A airspace.